Crucial - "Memoranda of Understanding"

A Memorandum of Understanding or letter of intent is usually defined as an agreement between two parties in the form of a legal document that expresses the willingness of both parties to do business or enter into a merger.

It indicates that a partnership, a merger or an acquisition between companies is being considered seriously and that both the parties wish to have further discussions before entering into a contractual agreement.

The Memorandum is aimed at promoting good standards of cooperation between the parties, indicating an intended common line of action and setting out a framework to facilitate liaison on areas of mutual interest. It also clarifies respective roles and responsibilities and outlines mechanisms in place to promote effective liaison relationships.