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Glossary · Management

MOU

Memorandum of Understanding

In plain language

A written statement of what two or more parties intend to do together, often not legally binding.

The metaphor

Like a project outline both sides sign to show they agree on direction before the paperwork starts.

Going deeper

How it works

  • States the shared goal and each party's role.
  • Is often shorter and looser than a contract.
  • Can be binding if the wording says so.
  • A lawyer should review it before signing.
In practice
  • Two firms sign one before negotiating a partnership.
  • A business and a school record a shared training plan.
  • Vendors outline how they will share customer data.

A question owners ask

Is it a contract?

Sometimes, sometimes not. The wording decides, so have a lawyer check.

Related terms
ALEAnnualized Loss ExpectancyAROAnnualized Rate of OccurrenceAUPAcceptable Use PolicyBackupBCPBusiness Continuity PlanningBIABusiness Impact AnalysisBPABusiness Partners AgreementBYODBring Your Own Device

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