MOU between two countries can be in the form of exchanging any product, supplying something in return of a different item, exchanging plans etc.įor example Government of INDIA, ASIAN INFRASTRUCTURE DEVELOPMENT BANK sign agreement for USD 500 MILLION COVID-19 support for INDIA. In the International memorandum of understanding, there is no legal validity or in other words, we can say that it is not legally binding but in international MOU there is mutual understanding between two countries to perform together in a coordinated manner. ![]() Amit Gupta 5 the Delhi High Court held that “in the absence of proof of coercion or misrepresentation, the Memorandum of Understanding which is otherwise valid should be applied and parties should be indentured by the terms and order of the MoU.” MEMORANDUM OF UNDERSTANDING (MOU)- INTERNATIONAL MOU: In the landmark case of Structural Waterproofing & Ors. SJR Infrastructure (Private) Limited 4, the Karnataka High Court held that Memorandums of Understanding (MoUs) are not to be interpreted as contingent contracts and are proficient of enforcement. Let us first understand what are the essential elements of a contract ENFORCEABILITY OF MEMORANDUM OF UNDERSTANDING (MOU) IN INDIA: In commercial contracts, MOU is often regarded as an Agreement to Agree and hence parties collaboratively work on good faith or best effort basis to finalize. State of Uttar Pradesh, 1 the conceptualization of promissory estoppels and equity was entrenched, where it was stated that the doctrine of promissory estoppel is a precept evolved by equity to avoid any kind of injustice and so whereby a promise has been made by a person knowing that it would be carried on by the person to whom it is made, and in fact it is so acted upon, and it is unjust to let the party making the promise to retract upon it. In the landmark case of Motilal Padampat Sugar Mills Co. If the MoU does not fulfil the term and conditions of a contract under the Indian Contract Act 1872 then, the Court can regard the Memorandum of Understanding as inoperative. Although the imposition of MoUs are considered under the Specific Relief Act and it is here only when the Doctrine of estoppel, plays a role for enforcement of MoU. In our country, MoUs are governed under the Indian Contract Act 1872. Memorandum of understanding can be used as an instrument to establish a contract. ![]() A Memorandum of Understanding or MOU Agreement is entered when the parties have agreed to enter into a contract, but the formalities of the contract are yet to be actualized. Memorandum of understanding is also known as Letter of Intent which is a document outlining the understanding between two or more parties. If the agreement involves funding, an IAA must be executed. 5) CONCLUSION: WHAT IS MEMORANDUM OF UNDERSTANDING?Ī memorandum of understanding (MOU) is moreover an explicit agreement between two or more parties, companies and organizations. j) Memorandum of Agreement (MOA) / Memorandum of Understanding (MOU): MOU/MOAs are agreements between agencies or bureaus that do not involve payment or transfer of funding.
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