In the business world, we often hear the term Memorandum Of Understanding or abbreviated as MOU. Usually this MOU is used as a prelude before the actual agreement is made, so what is the difference between an MOU and an agreement?
The MOU or Memorandum of Understanding is a document that is used as a preliminary to an agreement whose function is only to confirm that the parties are serious about cooperating or it can be referred to as a “sign of agreement” between the parties working together.
In simple terms, the MOU is a pre-contract stage whose content only deals with basic and general matters, so that there are no rights and obligations as well as legal consequences arising from the MOU. Then there is the difference between the MOU and the agreement, of course it is very different, simply if the MOU is a preliminary or a pre-contract, then the agreement is an actual contract. So in general the MOU does not bind the parties, so the parties can withdraw and cancel the MOU unilaterally without any legal consequences. While the agreement is binding on the parties, still remember the principle of “Pacta Sunt Servanda” which states that the agreement is valid as law for the parties that agree to it, so that the parties cannot withdraw from the agreement that has been agreed as easily as withdrawing from the MOU. if the agreement has been completed and the parties have completed their obligations.
These conditions are regulated in Article 1320 of the Criminal Code as follows:
a. There is an agreement between the parties The form of the agreement in question does not have to always be written. As long as the agreement is reached by the parties without coercion from any party, the parties are deemed to have fulfilled the legal conditions of the first agreement.
b. The skills of the parties The competent means that the party that will make the agreement is a party that is able to be responsible for itself and / or is the party authorized to act on behalf of the party it represents. According to the Criminal Code, a person can be categorized as capable if they are 21 years old or already married. Meanwhile, if the party that will make the agreement is a legal entity such as a PT or foundation, then the party categorized as competent to represent the legal entity is the person who has the authority based on statutory regulations. For example, if a legal entity is in the form of a PT, then the Director is the authorized party to represent the PT in accordance with the laws and regulations and the articles of association of PT.
c. Certain things as the object of the agreement Certain things that are meant are things that are the object of the agreement, including a description of the rights and obligations of the parties. For example, in a car rental agreement, the object of the agreement is a car and can be regulated regarding what things must be done or what the parties are prohibited from doing.
d. A cause that is lawful The meaning of a lawful cause is that the contents of the agreement do not violate statutory regulations, morals, and public order. Even though the parties are given the freedom to determine the contents of the agreement to be made, the agreement must still comply with the applicable law.
If all the conditions above have been met, then the agreement can be considered valid and binding on the parties. So that the agreement will act as a “law” which must be obeyed by the parties. In addition, the MOU is simple and only regulates general, broad and not detailed matters and is limited to plans only. Meanwhile, the agreement is specific and detailed so that everything that is regulated becomes clearer and more detailed, starting from the definition, rights and obligations of the parties, legal consequences, to the termination of the agreement, all of which are regulated in detail.
