It can serve as a preliminary document before crafting a formal contract.ĭIFFERENCES BETWEEN THE TWO Their ContentĪ contract involves an offer from one party and the acceptance of it from another in exchange for something.
It puts into writing each party’s intentions and actions, although most of the time, it doesn’t detail an implementation process.Īn MoU can be entered into by two parties (bilateral) or more than two parties (multilateral).
MoUs are signed by all the parties involved, so it carries the tone of mutual respect while documenting a relationship of goodwill between the parties. Typically the "thing of value" is goods, money, or an act.Īn MoU is a written document that describes the agreement between two or more parties concerning their contemplated relationship. It involves the exchange of something of value as an act of sealing the deal. Let's start with a basic definition of the two so knowledge can be applied properly.Ī contract is a written or spoken agreement that two or more parties enter into after the acceptance of an offer. I often hear knowledge is power but in actuality, the proper use of knowledge is power As a consultant, I often get asked what is the difference between a contract and a memorandum of understanding (MOU) and when should you use one as opposed to the other? The two are very similar but there are some key differences to consider when choosing which one to use for your business endeavor.
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