Memorandum of understanding

A document that expresses mutual agreement on an issue between two or more parties. MOUs are generally recognized as binding, even if no legal claim could be based on the rights and obligations laid down in them. To be legally operative, a MOU must (1) identify the contracting parties, (2) spell out the subject matter of the agreement and its objectives, (3) summarize the essential terms of the agreement, and (4) must be signed by the contracting parties. Also called letter of intent.