• Helps to perceive the goals and objectives
• Releases the risk of ambiguity
• Keeps the record of precious agreements
• Obligations of parties remains transparent
• Provides framework for future commercial relationships between the parties

• Specification of goals & objectives
• Responsibilities of parties
• Financial considerations and maintenance of financial records of the programme
• Duration of the agreement
• Validity of MoU
• Disclaimers along with Terms and Conditions
• Constituent of the management body or managers along with their roles, responsibilities and remuneration
• Confidentiality clause
• Indemnity clause

MoU is a non-legal enforceable obligation. It represents the intention of parties to work together. Generally, this is non-binding however, the clauses like jurisdiction, applicable law, dispute resolution method and indemnity clause have the binding effects to the agreement.

It is important to note that normally a MoU is governed under Indian Contract Act, 1872. In situations where the agreement satisfies the provisions of the said act, then the agreement is a legally valid contract and the aggrieved party can enforce the performance of agreement under the Specific Relief Act, 1963. Further, if the agreement does not satisfy the provisions of Indian Contract Act, 1872 then the aggrieved party can move to the court under equity and principles of promissory estoppels.

A stamp duty gives evidentiary value to a document before a court of law. Generally, no stamp duty is payable on MOU. However, in the situation where MOU incorporates an agreement to purchase any immovable property worth more than Rs. 100/- and when it is required to produce in any court of law then it should be stamped.