Memorandum of Understanding

A memorandum of understanding (MoU) is a formal agreement between two or more parties usually one of which is a service provider and the other is the receiver. The MoU outlines the obligations, rights and duties, and other grounds of agreement. It simplifies the relationships among the parties and create a non-conflicted environment of work. Being a nature of non-binding written agreement, it is considered as a good method to establish formal relationships between the parties.

Benefits & Advantages

  • Helps to perceive the goals and objectives
  • Releases the risk of ambiguity
  • Keeps the record of precious agreements
  • Obligations of parties remains transparent
  • Provides framework for future commercial relationships between the parties

Particulars in MoU

  • Specification of goals & objectives
  • Responsibilities of parties
  • Financial considerations and maintenance of financial records of the programme
  • Duration of the agreement
  • Validity of MoU
  • Disclaimers along with Terms and Conditions
  • Constituent of the management body or managers along with their roles, responsibilities and remuneration
  • Confidentiality clause
  • Indemnity clause

Enforceability of MoUs

MoU is a non-legal enforceable obligation. It represents the intention of parties to work together. Generally, this is non-binding however, the clauses like jurisdiction, applicable law, dispute resolution method and indemnity clause have the binding effects to the agreement.


It is important to note that normally a MoU is governed under Indian Contract Act, 1872. In situations where the agreement satisfies the provisions of the said act, then the agreement is a legally valid contract and the aggrieved party can enforce the performance of agreement under the Specific Relief Act, 1963. Further, if the agreement does not satisfy the provisions of Indian Contract Act, 1872 then the aggrieved party can move to the court under equity and principles of promissory estoppels.

Stamp Duty on MoU

A stamp duty gives evidentiary value to a document before a court of law. Generally, no stamp duty is payable on MOU. However, in the situation where MOU incorporates an agreement to purchase any immovable property worth more than Rs. 100/- and when it is required to produce in any court of law then it should be stamped.

MoU is a formal agreement between two or more parties which describes the responsibilities of each of the parties for the subject of the agreement.

MoU is required to understand the terms & condition of an agreement to attain a mutual understanding and commence the concerned project.

No, generally this is not binding but subjected to the provisions of the Indian Contract Act, 1872. In situations where the agreement satisfies the provisions of the said act, then the agreement is a legally valid contract and the aggrieved party can enforce the performance of agreement under the Specific Relief Act, 1963. Further, if the agreement does not satisfy the provisions of Indian Contract Act, 1872 then the aggrieved party can move to the court under equity and principles of promissory estoppels.

Generally, there is no stamp duty payable on MoUs. However, in the situation where MOU incorporates an agreement to purchase any immovable property worth more than Rs. 100/- and when it is required to produce in any court of law then it should be stamped.

No, a person cannot sue on the basis of MOU unless a proper contract is made along with MOU. It is said that when parties to an agreement intended to create a legal contract, the parties may intend otherwise as well.

Yes, a properly stamped MoU can be produced as an evidence before a court.

  1. Corporates/ Organisations
  2. Individuals
  3. Entities
  4. Government Bureau
  5. Trusts
  6. Countries

What’s Included

  • Consultation with our Experts
  • 1st draft of the Memorandum
  • Final draft of Memorandum after revisions

Documents Required

  • Background information of involved parties
  • Short description of nature of product/ service involved

Memorandum of Understanding (MoU)


Transactions between two or more parties needs agreements and requirements. Filecrat offer Memorandum of Understanding (MoU) from Rs.2499/

₹2,499.00

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