<P> A memorandum of understanding (MoU) is an agreement between two (bilateral) or more (multilateral) parties . It expresses a convergence of will between the parties, indicating an intended common line of action . It is often used in cases where parties either do not imply a legal commitment or in situations where the parties cannot create a legally enforceable agreement . It is a more formal alternative to a gentlemen's agreement . </P> <P> Whether a document constitutes a binding contract depends only on the presence or absence of well - defined legal elements in the text proper of the document (the so - called "four corners"). The required elements are: offer and acceptance, consideration, and the intention to be legally bound (animus contrahendi). In the U.S., the specifics can differ slightly depending on whether the contract is for goods (falls under the Uniform Commercial Code (UCC)) or services (falls under the common law of the state). </P> <P> Many companies and government agencies use MoUs to define a relationship between departments, agencies or closely held companies . In the United Kingdom, the term MOU is commonly used to refer to an agreement between parts of The Crown . The term is often used in the context of devolution, for example the 1999 concordat between the central Department for Environment, Food and Rural Affairs and the Scottish Environment Directorate . </P>

When is a memorandum of understanding legally binding
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