Memorandum of Understanding - MOU
A legal document outlining the terms and details of an agreement between parties, including each parties requirements and responsibilities.
Investopedia Commentary
The MOU is often the first stage in the formation of a formal contract. An MOU is far more formal then a handshake and is given weight in a court of law should one party fail to meet the obligations of the memorandum.
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See also: Gentleman's Agreement, Heads of Agreement, Hell or High Water Contract, Obligation, Prospectus
Also spelled: MOU