However, specific attention must be given to the governing law. And before entering into these negotiations or during such negotiation parties might end up entering into a document which is commonly referred to as MoU or LoI. Signed contracts just don’t appear magically out of thin air contracts are a result of extensive negotiations (verbal and written) conducted via email exchanges, phone calls, virtual or face to face meetings, etc. MoU/LoI are frequently entered in the United Arab Emirates (UAE), especially in big corporate deals (like share sale-purchase agreement, investment agreement, technology transfer agreement, etc.). It is usually entered to solidify the initial understanding between the parties and give a direction to the negotiation or upcoming collaboration between the parties.Īn MoU/LoI could be entered between two or more parties (bilateral or multilateral) and usually it is a non-binding document or an ‘agreement to agree’ in future, provided that it is drafted with required clarity signifying such intention. We are looking forward to your comments here on #LinkedIn or via email - is a Memorandum of Understanding or the Letter of Intent?Ī Memorandum of Understanding (MoU) or the Letter of Intent (LoI) is a preliminary document entered between the parties before signing an extensive agreement. We hope this article is of practical help, rather than just theoretical.
(The authors of this article are Mr Sandeep Bhalothia, MCIArb and Mr Aman Garg) This article briefly explains the concept of MoU/LoI, enforceability as per the UAE Laws and then provides 10 practical drafting tips.
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