These, however, have to be determined from all the terms and MOU clause of the document and all the rights and results flowing therefrom and not by picking and choosing certain clauses.' ‘It is true that the nomenclature and description given to a contract are not determinative of the real nature of the document or of the transaction thereunder. The Supreme Court of India, in case of State of Orissa & Others v. In the Indian legal scenario, nomenclature of an agreement is irrelevant. However, simply calling an agreement a Memorandum of Understanding does not automatically denote that a contract is non-binding. An MoU in India is, therefore, also known as the Letter of Intent. The term ‘Memorandum of Understanding (MoU)’ is commonly used for a non-binding contract, that describes the intention of 2 people or businesses to work in consensus. What is Memorandum of Understanding (MoU)? However, there exists ambiguity whether Memorandum of Understanding (MoU) is legally binding in India or not. This agreement is termed as the ‘Memorandum of Understanding’. These business organizations, while negotiating with their potential business partners, joint ventures, vendors, and agents usually enter into a preliminary agreement with them as the first friendly step towards a possible alliance. In the modern business world, business organizations enter into different kinds of agreements while carrying out their business.
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