What is MOU?
The MOU full form is a Memorandum of Understanding an agreement signed between two or more associates or parties in formal documentation. This documentation signing is not illegally done or we can say in other words, the document is not properly registered. Simply, the sign of the willingness of different parties, which undergoes various agreements among them to move forward with a contract.
MOUs are the mutual acceptable expectations of all of the associates or parties involved in a negotiation.
How does an MOU work?
An MOU is an expression of agreement to proceed further, under certain contracts like business, trading, education, and so on. It indicates that the parties have reached a mutual understanding and are ready to move together with the same rule and regulations as mentioned in that agreement. In addition, this agreement documentation is mostly submitted based on the trustworthy.
When any party seems to break the rules as per the agreement, the opposing party can file the case against their co-partner. Then the agreement automatically becomes an official agreement.
Pros and cons of MOU?
A Memorandum of Understanding allows all parties to clearly describe all of their terms and objectives of goal. This process makes for less occurrence of unexpected disputes among the parties.
The drawback of an MOU, depending on your point of view, is that it is not legally filed. MOUs can take significant time and planning to create and if one party completely changes its requirements and creating MOU was a big waste of resources.
An MOU is an important aspect because it allows each party to clearly describe the terms and conditions, which include the disclaimer, what type of process was undertaken, and so on. A Memorandum of Understanding MOU is a legal document but not legally registered.