A memorandum of understanding (MOU or MoU) is a document describing a bilateral or multilateral agreement between parties. It expresses a convergence of will between the parties, indicating an intended common line of action. It most often is used in cases where parties either do not imply a legal commitment or in situations where the parties cannot create a legally enforcement agreement. It is a more formal alternative to a gentlemen's agreement.

In some cases, depending on the exact wording, MoUs can have the binding power of a contract; as a matter of law, contracts do not need to be labeled as such to be legally binding. Whether or not a document constitutes a binding contract depends only on the presence or absence of well-defined legal elements in the text proper of the document (the so-called "four corners"). For example, a binding contract typically must contain mutual consideration—a legally enforceable obligations of the parties, and its formation must take place free of the so-called real defenses to contract formation (fraud, duress, lack of age or mental capacity, etc.).

In private law

In private U.S. law, MoU is a common synonym for a letter of intent (LoI). One example is the MoU between Bush and Kerry for the 2004 debates iii.

Inside a company or government agency

Many companies and government agencies use MoUs to define a relationship between departments, agencies or closely held companies. These branches of the organization fall under similar control structures but need to ensure smooth operations where there are shared resources or workflows. Often these organizations are not legal persons and hence cannot enter into binding legal agreements.

MoU's include areas such as service level agreements (SLAs), intra-organization connectivity, intra-organization communications and intra-organization escalations and response patterns. Like the MoU in law, it creates a platform for a clear understanding of each party's commitments/purpose and sets out expectations for a series of pre-determined responses should certain criteria be met that shows that there is either intentional or unintentional breach of the MoU's original commitments/purpose.

In public international law

In international relations, MoUs fall under the broad category of treaties and should be registered in the United Nations treaty database¹. In practice and in spite of the United Nations' Legal Section insistence that registration be done to avoid 'secret diplomacy,' MOUs are sometimes kept confidential. As a matter of law, the title of MoU does not necessarily mean the document is binding or not binding under international law. To determine whether or not a particular MoU is meant to be a legally binding document (i.e. a treaty), one needs to examine the intent of the parties and well as the position of the signatories (e.g. Minister of Foreign Affairs vs Minister of Environment). A careful analysis of the wording will also clarify the exact nature of the document. The International Court of Justice has provided some insight into the determination of the legal status of a document in the landmark case of Qatar v. Bahrain, 1 July 1994. One advantage of MoUs over more formal instruments is that, because obligations under international law may be avoided, they can be put into effect in most countries without requiring parliamentary approval. Hence, MoUs are often used to modify and adapt existing treaties, in which case these MoUs have factual treaty status. The decision concerning ratification, however, is determined by the parties' internal law and depends to a large degree on the subject agreed upon. MOUs that are kept confidential (i.e. not registered with the United Nations) cannot be enforced before any UN organ, and it may be concluded that no obligations under international law have been created. As was obvious in the Qatar v. Bahrain case, disputes may arise concerning the status of the document once one of the parties seeks to enforce its provisions.

Although MOUs in the multilateral field are seldomly seen, the transnational aviation agreements are actually MoUs.

Examples include:

• The Memorandum of Understanding Relating to the Treaty between the United States of America and the Union of Soviet Socialist Republics on the Limitation of Anti-Ballistic Missile Systems on May 26, 1972 signed by US President Richard Nixon and the USSR Successor States updating the Anti-Ballistic Missile Treaty²
• The Memorandum of Understanding on Hijacking of Aircraft and Vessels and Other Offenses between the US and Cuba, meant to criminalize hijacking in both countries (February 3, 1973)
• The Agreed Framework between the U.S. and North Korea over nuclear weaponry on October 21, 1994
• The Oil for Food program, for which Iraq signed an MoU in 1996
• The agreement between the government of Indonesia and the GAM in the Aceh peace process, 15 August, 2005.
• The agreement between the UK and Jordan, Libya and Lebanon regarding potential extradition of suspects (commonly terrorists suspects) who if they are to be tried, must be tried fairly and in a manner similar to the European Convention on Human Rights, for example withholding from using evidence obtained through the use of torture(Article 3). Such an understanding has been criticised for its inability to be legally enforced. This has been highlighted in the current deportation process of the suspected terrorist Abu Qatada, who is wanted by Jordan in connection with a terrorist attack. However, at present, the Court of Appeal have rejected the UK Government's appeal based on their concern at Jordan obtaining evidence potentially incriminating Qatada through the use of torture.

References

External links

• Aceh MoU detail
• Memorandum of Understanding Instructions and Template Memorandum of Understanding Instructions as well as a Template to download.