The Mind-bending Memoranda of Understanding Quiz

By: Staff
Image: refer to hsw

About This Quiz

Memoranda of understanding are the laid-back guys at the law office. They're a bit more formal than a handshake but less complicated than a contract. How much do you know about these ultra-common agreements?

Memoranda of understanding (MOUs) are basically an agreement that comes before this?

Let's agree to agree! It sounds redundant, but MOUs are a written agreement that comes before a more formal agreement -- any sort of agreement between two or more parties.

What are MOUs sometimes called?

Lawyers love their lingo. There are minor differences, but letters of intent and memoranda of agreement are basically the same as MOUs.

MOUs are considered a form of what?

Your lawyers are cute teddy bears. Soft laws like MOUs are a good way to document parties' intentions, but they aren't binding in the way "hard" laws are.

Why do so many entities prefer to use MOUs instead of contracts?

In terms of formality, contracts are black-tie affairs. MOUs? Just wear a jacket. If no one really wants the legally enforceable elements of a contract, MOUs are another good option.

In international law, countries sometimes write MOUs to avoid more formal documentation, such as this.

Allergic to treaties? A lot of countries are, because violating them carries serious consquences. MOUs, on the other hand, aren't binding.

Why do interagency government agreements often take the form of MOUs?

Surprise, your government is actually accomplishing something today. The informality of MOUs helps agencies figure who's doing what and lets them get started right away, without formal documentation.

When two parties are negotiating, what are MOUs good for?

Now you know exactly how this deal is going down. With each party's intentions and responsibilities on paper, everyone understands their obligations to the project.

What’s one of the risks of using an MOU instead of a contract?

What do you mean, you're not going to deliver the spaceship I ordered? Better get a contract! Because MOUs aren't a formal, standard agreement, one party can violate an MOU and get away with it.

Why did George W. Bush and John Kerry agree to an MOU during the 2004 presidential race?

Calling them debates might be a stretch. Both candidates agreed to very specific debate conditions in order to protect their images and prevent public embarrassment.

If an MOU contains the language and structure of a contract, what might a judge do if the parties wind up in court?

A contract is a contract is a contract. Calling a contract an MOU doesn't make it an MOU, and a judge will recognize a contract when she sees one.

For a judge to find an MOU a binding agreement, he will look for what key elements?

Contracts all smell and look alike. They contain an offer, acceptance, intention and consideration.

What's one reason countries use MOUs in place of treaties?

Treaty approval is often a time-consuming mess. MOUs, on the other hand, allow countries to create agreements much more quickly.

Why do a lot of lawyers dislike MOUs?

Getting sued is so cliché. Really, even a lot of lawyers don't enjoy going to court, and ambiguously written MOUs are a good way to end up there.

In one notable example, the United States and Cuba signed an MOU criminalizing which activity?

Did they really have to spell this one out? In in 1973, the countries agreed to classify hijacking as a criminal act.

MOUs are rather informal, but they're actually more formal than what kind of agreement?

It's not very gentlemanly to stab someone in the back with a butcher knife. Using an MOU is more formal than a gentlemen's agreement and could prevent serious legal messes.

Even though MOUs typically aren't binding, what wonderful purpose do they serve?

There's no party like a procrastination party. When both entities commit to writing an MOU, they have more motivation to get moving and get organized.

For an MOU to be official, it must be documented on what kind of material?

MOUs are the wild guys of the contract party. You can create an MOU anywhere, anytime, so long as both parties sign.

As two parties negotiate a business deal, they might include which sort of details in the MOU?

MOUs don’t go overboard on commitment. They might have a couple of minor binding components, like a privacy provision, but that’s about it.

What's one way two parties can make it absolutely clear that an MOU isn't intended to be a contract?

Can we make this any clearer? Including a phrase that strongly states the non-binding nature of the MOU helps avoid contract disputes.

Why does the Securities Exchange Commission use MOUs instead of treaties to pursue financial criminals living abroad?

By the time you write that treaty, these guys will have fled to their secret islands in the South Pacific. With an MOU, though, you might nab them before they escape.

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