Explanation:

Memorandum of Understanding

A memorandum of understanding (MOU) is an agreement between two or more parties outlining the terms and details of an understanding

The document clearly demarcates each party's requirements and responsibilities.

 It is often the first stage in the formation of a formal contract and does not involve the exchange of money.

In other words, a memorandum of understanding is an agreement between two or more parties outlined in a formal document.

It is not legally binding but signals the willingness of the parties to move forward with a contract.

The MOU can be seen as the starting point for negotiations as it defines the scope and purpose of the talks.

Such memoranda are most often seen in international treaty negotiations but also may be used in high-stakes business dealings such as merger talks.