Memorandum Of Understanding Is Not A Binding Contract

Memorandum Of Understanding Is Not A Binding Contract.

DAILY LAW TIPS by Onyekachi Umah,Esq. (Tip 201)

Contract is a binding agreement between parties, creating a commitment to do or not to do a particluar thing. Memorandum of Understanding (MOU) is a mere expression of intention by parties, a preliminary understanding of parties to later enter into a formal contract but not on its own a contract and as such not binding and not enforceable by parties.

MOU could come in the form of “Heads of Agreement”, “Letter of Intent”, and “Heads of Terms”. They are not binding agreements but

an expression of intentions subject to certain circumstances. It is also common to find full fledged binding agreements that are ignorantly or mischievously titled Memorandum of Agreements.

In all situations, the words and contents of an agreement (as well as conduct of parties) a what the court must consider in finding the true intentions of parties and the implication of their MOU. To ensure you don’t sign a Contract instead of a mere Memorandum of Understanding, always contact your lawyer.

References:

See the decision of Supreme Court in the case of BPS CONSTRUCTION & ENGINEERING COMPANY LIMITED v. FEDERAL CAPITAL DEVELOPMENT AUTHORITY (2017) LPELR-42516(SC).

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Onyekachi Umah, Esq., LL.M, ACIArb(UK)

Onyekachi Umah is an exceptional Legal Practitioner, Arbitrator, Notary Public and Legal Awareness Expert with over a decade of experience in civil law, criminal law and human rights. He holds a Master of Laws; a Master of Business Administration (mini) and he is a doctoral candidate. Mr Umah is the Managing Partner of the law firm of Bezaleel Chambers International (BCI), where he consults and provides legal services to several national and international organisations, including the United Nations. Aside from his very engaging legal practice, Mr Umah runs a legal awareness organisation (Sabi Law Foundation) and he diligently publishes free daily law tips, every day on www.LearnNigerianLaws.com since 2017. He has published over 820 legal articles in diverse areas of law, delivered over 35 public lectures, anchored over 67 law radio/tv shows and supported several legal and developmental projects across Africa. Click to read more.

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Memorandum Of Understanding Is Not A Binding Contract

Onyekachi Umah, Esq., LL.M, ACIArb(UK)

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