The memorandum of understanding (MOU) is a standard agreement between startups who are pre-product and potential customers to define commitment, interest, terms, and pricing in writing before delivering the goods or service. LOI and MOU agreements are used interchangeably and usually non-binding. At times the MOU is used in partnerships to define working relationships where no financial exchange is yet made. At times, in working with customers on large projects with multiple phases where the customer and business work together before payment and services are exchanged, an MOU may be used before an LOI is used to define pricing and terms. This document is usually also used to clarify the understanding of both the customer and founder and is often used to show investors. Also, see Letter of Intent (LOI).
The memorandum of understanding (MOU) is a standard agreement between startups who are pre-product and potential customers to define commitment, interest, terms, and pricing in writing before delivering the goods or service. LOI and MOU agreements are used interchangeably and usually non-binding. At times the MOU is used in partnerships to define working relationships where no financial exchange is yet made. At times, in working with customers on large projects with multiple phases where the customer and business work together before payment and services are exchanged, an MOU may be used before an LOI is used to define pricing and terms. This document is usually also used to clarify the understanding of both the customer and founder and is often used to show investors. Also, see Letter of Intent (LOI).
