Difference between MOU and Letter of Intent
Basis | Letter of Intent (LOI) | Memorandum of Understanding (MOU) |
Nature of parties | In LOI two parties are involved. | In MOU more than two parties may get involved. |
Binding or not | It may or may not be binding and carries low weight in court of law. | It is binding and carries weight in court of law. |
Legal Enforceability | It carries low weightage in court of law. | It is legally enforceable and carries weightage in court of law. |
Signatories | An LOI, will list the terms, actions, and conditions that have been agreed upon by both parties, but is signed only by the party that forwarded the initial proposal. | The terms, actions, and conditions listed in an MOU are signed by all parties that are in agreement. |
Uses | LOI is commonly used to define the points that have been agreed between a buyer and a seller prior to finalizing the deal with a contract signed by both parties. | MOUs are used to define the parameters under which parties in agreement will work together, which is often in the form of a joint venture or partnership. |
Continuance | LOI is often converted into a contract later, thus have limited use. | MOU often continue to stay at its form until the completion of the task or project. |
Conclusion:
These two terms have not much difference the main difference that we conclude
from above
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