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Memorandum of Understanding (MOU) is a type of agreement which is executed between two or more parties describing the rights and obligations of the parties. Generally it is executed for initial discussions. Hence it consist the features of oral discussion among the parties.
Memorandum of Understanding is a non binding contract which reflects the intention of the parties involved in an agreement. It is also known as letter of intent in India. Here are the following features of Memorandum of Understanding:
Memorandum of Understanding consist the provisions regarding understanding between the parties in respect of particular project which they would like to undertake. We cannot conclude that mere existence of a document for understanding between the parties is a contract. Every agreement is not a contract according to Indian Contract Act 1872. Agreements which are enforceable by the court of law are contracts. Now the question is whether the MOUs are legally binding in India? The essential requirements of a contract haven been specified under section 10 of Indian contract act 1982.
Contents of the MOU describe the intention of the parties involved. Rights, duties and obligations created among the parties explain the legal nature of a MOU. Therefore the most important element is to understand the nature of relationship created among the parties involved under the legally binding MOU. Intention of the parties must be clearly distinguished on the basis of complete contract & informal agreement such as if the agreement is executed merely to agree then it is an informal agreement or it is a contract if the parties are bind to perform. Source url - https://enterslice1.wordpress.com/2018/08/09/does-memorandum-of-understanding-is-legally-binding-in-india
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