Definition: “MoU” is the acronym for Memorandum Of Understanding.
MoU may also be called Letter of Intent (LoI)
Comments: A MoU is a document by which two parties describe how they intend to work together. It can be just a technical base line of co-operation or a more extended agreement with commercial and financial terms. Depending on the countries, a MoU may be considered as a formal bidding contract or not.
To avoid future potential conflicts between the parties, a MoU should refer more to the intention to provide means than to detailed commitments on goals and results with key performance indicators (KPIs) and so on.
Normally companies use MoU when they want to go fast in mobilizing resources in common to capture opportunities, so that their action is not slowed down by legal and financial discussions which can be managed in parallel.
In putting on paper the base line of a potential future contract, the MoU helps the partners to realize in more details what shall be the name of the game and what kind of commitment they can commit on on their side and rely on from the other party.