Memorandum of Understanding (MOU) Template (India) — Free Format
A memorandum of understanding (MOU) records the key terms two or more parties have agreed in principle before they sign a full contract. This template makes clear which parts are binding — usually confidentiality, exclusivity and costs — and which are only statements of intent.
Stamp, registration and e-sign at a glance
The three things to settle before anyone signs this agreement in India.
Payable under the stamp law of the state where it is signed; rates vary by state. Unstamped, it cannot be used as evidence until duty and penalty are paid.
Check your state's rateRegistration is generally not required, unless the MOU creates rights in immovable property.
This agreement can be signed electronically with Aadhaar eSign or a DSC under the Information Technology Act, 2000. Electronic signatures listed in the Act's Second Schedule carry a presumption of reliability. An MOU for the sale of immovable property cannot be e-signed.
What cannot be e-signedWhat is a MOU?
An MOU outlines the purpose of a collaboration, each party's role, timelines and next steps. In India, an MOU is binding to the extent it shows an intention to create legal relations and has definite terms; courts look at substance, not the title. That is why a good MOU says expressly which clauses bind the parties.
When to use it
- Two companies agree to explore a joint venture, partnership or co-marketing arrangement
- An institution and a company agree to collaborate on research or training
- Before a definitive agreement, to lock in confidentiality and a short exclusivity window
Key clauses checklist
Make sure your draft covers each of these. Linked clauses open a sample wording with drafting tips.
- Purpose and scope of collaboration
- Roles and responsibilities
- Binding and non-binding provisions
- Confidentiality Sample clause
- Exclusivity period
- Termination Sample clause
- Governing law Sample clause
Indian law notes
Is an MOU binding?
An MOU is a contract under the Indian Contract Act, 1872 if the parties intended to be bound and the terms are certain. If you do not want the commercial terms to bind, say so clearly and limit the binding part to confidentiality, exclusivity, costs and governing law.
Stamp duty
Many states charge duty on an MOU as an agreement or memorandum of agreement. Where an MOU relates to immovable property, it may be charged at a much higher rate, so get advice.
MEMORANDUM OF UNDERSTANDING
This Memorandum of Understanding ("MOU") is made on [Date] at [City] between:
[Party A], [description and address] ("Party A"); and
[Party B], [description and address] ("Party B").
1. PURPOSE
The parties intend to collaborate on [describe project] (the "Project") and record in this MOU the principles on which they will negotiate definitive agreements.
2. ROLES
2.1 Party A will [responsibilities].
2.2 Party B will [responsibilities].
3. KEY COMMERCIAL TERMS (NON-BINDING)
[Revenue share / cost sharing / timelines / governance — describe the proposed terms.]
4. DEFINITIVE AGREEMENTS
The parties will negotiate in good faith and aim to sign definitive agreements by [Date]. Neither party is obliged to enter into them.
5. BINDING PROVISIONS
Only clauses 5 to 10 are legally binding. All other clauses are statements of present intention and create no legal obligation.
6. CONFIDENTIALITY
Each party shall keep confidential the terms of this MOU and all information received from the other in connection with the Project, and use it only to evaluate the Project, for [2] years from today.
7. EXCLUSIVITY
For [60] days from today, neither party shall negotiate with a third party for a project substantially similar to the Project.
8. COSTS
Each party bears its own costs of negotiating this MOU and the definitive agreements.
9. TERM AND TERMINATION
This MOU ends on the earlier of signing of the definitive agreements, [Date], or [15] days' written notice by either party. Clauses 6 and 8 survive termination.
10. GOVERNING LAW
This MOU is governed by the laws of India and the courts at [City] have exclusive jurisdiction.
Signed for Party A: ____________ Signed for Party B: ____________
Name / Designation: [Name] Name / Designation: [Name]
Witness 1: ____________ Witness 2: ____________ Replace every [placeholder] and delete options that do not apply.
How to execute it
From blank template to a signed, stamped and stored contract.
Record the purpose and each party's responsibilities.
Decide which clauses should bind and list them in the binding-provisions clause.
Pay stamp duty in the state of execution.
Sign with eSign or on stamp paper, with witnesses if your advocate recommends.
Diarise the exclusivity end date and the target date for definitive agreements.
Frequently asked questions
Is an MOU legally binding in India?
It can be. Courts look at whether the parties intended to be bound and whether the terms are certain. State expressly which clauses are binding.
What is the difference between an MOU and an agreement?
An MOU usually records agreement in principle before a detailed contract, while an agreement sets out enforceable obligations in full. The legal effect depends on the wording, not the title.
Does an MOU need to be on stamp paper?
In most states an MOU is a chargeable instrument and should be stamped. The rate depends on the state and the subject matter.
Related templates
Stop emailing Word files around
Turn this format into an approved template, collect approvals, buy e-stamp paper, send it for Aadhaar eSign and get reminded before it renews.