Memoranda of understanding 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 memorandum of understanding 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.
Use this term in a sentence
The business deal ended with a discussion of the memorandum of understanding as to ensure all the parties were on the same page.
I was relieved that they finally got a memorandum of understanding and that everything would be okay from now on.
You should have a solid memorandum of understanding when you want to make sure each party fully understands everything in the deal.