A memorandum of understanding (MOU) in a joint venture situation. This represents the good faith intentions of the parties to proceed but is not legally binding. This document is drafted in favour of the leader of the joint venture.
The parties believe that the joint venture will be in their mutual best interests. They recognise that the various arrangements will need careful review but each will endeavour in good faith to agree the detailed terms of the joint venture, on the basis of the principles set out in this Memorandum, and to take all necessary other actions in order successfully to establish the joint venture. The parties' preferred intention is to create a new jointly-owned company into which they would transfer their existing interests. The parties will consider appropriate alternative structures if that becomes necessary or desirable because of tax and cost efficiency. The parties' preferred intention is to create a new jointly-owned company. The parties will consider appropriate alternative structures if that becomes necessary or desirable because of tax and cost efficiency.
This document should be carefully read by the contracting parties. It shall be reminded that the document is not legally enforceable.
This memorandum of understanding (MOU) template may be used during a joint venture (JV) situation, whereby the parties want to express their good faith intentions to proceed in their venture.
This MOU template may be used if it is to be drafted in favour of the leader of the joint venture in the memorandum of understanding.
Both parties should sign and return a copy, and once signed, both parties should get a copy. To avoid any future disputes, both parties may wish to have their signatures witnessed.
If either party wishes to amend the agreement in the future, both parties should agree to do so, and the original agreement and amendments should be recorded in writing and signed by both parties.
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