Definitions:
A Memorandum of Understanding (MOU) is a non-binding document that outlines the general terms and understanding of a relationship between two or more parties. It expresses a convergence of will between the parties, indicating an intended common line of action, rather than a legal commitment. It is often used as a preliminary step before negotiating a formal agreement. While it does not have the legal force of an agreement, an MOU can help clarify the intentions of the parties involved and provide a framework for further negotiations.
On the other hand, an agreement is a legally binding document that establishes the specific terms and conditions of a relationship between two or more parties. It is a formal contract that can be enforced in a court of law, and it usually requires the signature of all parties involved. An agreement typically covers topics such as payment terms, Non –disclosure clauses, Non- circumvention Clauses, warranties, liability, and dispute resolution.
Differences:
The main difference between MOU and Agreement is their legal enforceability. While an agreement is a legally binding document, an MOU is not. An agreement can be taken to court if one party breaches the terms of the contract, while an MOU cannot be enforced in court.