Mou
ss.k
(Querist) 07 March 2013
This query is : Resolved
Sir,
I submit that in a property located in Delhi a court case is going on between parties. Now both the parties are willing to settle their property dispute in Mediation Cell and for which case also referred to there. Please clarify the following;-
1. Whether memorandum of understanding agreed and signed by both the parties are legally binding in court of law ?
2. Can the other party after MOU back out thereby creating dispute afresh ?
3. What are the safeguards to be adopted while signing the memorandum in the mediation cell, so that the other party is not able to back out.
ajay sethi
(Expert) 07 March 2013
normally once both the parties have signed the MOU, it is binding on them but there have been instances where one of the parties has gone back from the MOU and restarted the case.
ajay sethi
(Expert) 07 March 2013
MOU should mention that it is final , binding and enforceable agreement reolving all issues that were raised between the parties .
This Memorandum shall act as the final settlement document between the parties and
may be fully enforced as a complete settlement agreement. signed by both the parties
prabhakar singh
(Expert) 07 March 2013
The validity or otherwise of any MOU depends on the document itself.
It is difficult to define the term Memorandum of Understanding nor does any law is there to define it. It is generally regarded as a preliminary statement of the intention of the parties or a convergence of the will of the parties.
Many a time, the intention of the parties is to have an MOU as a matter of record intended as a guide for future transactions. It is also not uncommon for parties to enter into a non-binding MoU. In such cases, the non-binding nature of the MOU is clear as is stated in the document itself.
If the wordings used in the MoU are vague and unclear and do not create any binding effect, then the same cannot be enforced. The parties may use vague terms and may not implement any of the guidelines or terms and conditions contained in the MoU. The subsequent behavior of parties may also show that the MoU was only an attempt to have a future relationship and only sets out the scope of transactions. In such cases also, the MoU may not be an enforceable document.
Raj Kumar Makkad
(Expert) 08 March 2013
1. Yes, if the same becomes part of the judgment.
2. No.
3. Carefully go through the entire drafting many times and consult with all concerned and only after fully understanding and agreeing, do sign and get it signed.
As mediation cell send the matter compromised to the Lok Adalat, its decision cannot be got challenged by any party thereafter.
J K Agrawal
(Expert) 08 March 2013
Dear Sirs
The MOU is not enforceable anywhere unless it is (as good as) an agreement. There are so many differences in MOU and Contract. If the conditions are binding upon parties, it is a contract and not an MOU.
MOU is only understanding between the parties. If parties do anything in furtherance of it (even if a small bit) it becomes a valid contract otherwise it is nothing to enforce.
