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A Memorandum of Understanding (MOU) is a document in which two or more parties declare that they agree on a common course of action or business. It is the first stage of the making of a contract. An MOU is generally recognized as binding even though it creates no rights and obligations in itself. To be legally operative, an MOU must identify the contracting parties, spell out the subject matter of the agreement and its objectives, summarize the essential terms and must be signed by the contracting parties.

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