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Photograph representing Memorandum of Understanding (MOU)

Memorandum of Understanding (MOU)

R749

Create a professional Memorandum of Understanding that records the parties’ shared intentions, roles, responsibilities, timelines, confidentiality obligations, costs, and whether the arrangement is binding or non-binding.

A Memorandum of Understanding is used where two or more parties want to record a proposed cooperation, project, commercial relationship, partnership discussion, joint initiative, or preliminary arrangement before signing a full contract. It can be used for business collaborations, service partnerships, NPO projects, municipal or public-sector cooperation, supplier discussions, joint ventures, research projects, and community initiatives. The MOU should clearly state whether it is binding, non-binding, or partly binding.

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South African legal context (2026 checklist)

An MOU is not automatically non-binding merely because it is called a “Memorandum of Understanding”. Its legal effect depends on the wording, the parties’ intention, the certainty of the terms, and whether the document contains enforceable obligations. Some clauses may be non-binding statements of intention, while others may be binding, such as confidentiality, exclusivity, intellectual property, costs, dispute resolution, governing law, and termination. To reduce risk, the MOU should clearly say which clauses are binding and whether the parties are still subject to a final written agreement.

  • South African common law of contract
  • Companies Act 71 of 2008, where a company is a party or corporate authority is relevant
  • Electronic Communications and Transactions Act 25 of 2002, where the MOU is signed or exchanged electronically
  • Protection of Personal Information Act 4 of 2013, where personal information is shared or processed
  • Consumer Protection Act 68 of 2008, where the arrangement involves supply of goods or services to consumers
  • Competition Act 89 of 1998, where cooperation between businesses may affect competition
  • Public Finance Management Act 1 of 1999, where a national or provincial public entity is a party
  • Local Government: Municipal Finance Management Act 56 of 2003, where a municipality or municipal entity is a party
  • Municipal Systems Act 32 of 2000, where municipal service delivery or long-term municipal obligations are involved
  • Southernport Developments (Pty) Ltd v Transnet Ltd 2005 (2) SA 202 (SCA)
  • Everfresh Market Virginia (Pty) Ltd v Shoprite Checkers (Pty) Ltd 2012 (1) SA 256 (CC)
  • Makate v Vodacom (Pty) Ltd [2016] ZACC 13

Use this as a starting point only. Verify current gazetted amendments, tribunal rules, and SARS / DOL circulars that may apply to your matter.

Typical questions we'll walk you through

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What are the full names and details of the parties entering into the MOU?
What are the full names and details of the parties entering into the MOU?
Is either party a company, partnership, NPO, trust, public body, or individual?
Is either party a company, partnership, NPO, trust, public body, or individual?
What is the purpose of the MOU?
What is the purpose of the MOU?
What background or project gave rise to the MOU?
What background or project gave rise to the MOU?
Is the MOU intended to be legally binding, non-binding, or partly binding?
Is the MOU intended to be legally binding, non-binding, or partly binding?
Which clauses must be binding, such as confidentiality, costs, intellectual property, exclusivity, dispute resolution, or governing law?
Which clauses must be binding, such as confidentiality, costs, intellectual property, exclusivity, dispute resolution, or governing law?
What roles and responsibilities will each party have?
What roles and responsibilities will each party have?
What deliverables, outputs, services, or cooperation activities are expected?
What deliverables, outputs, services, or cooperation activities are expected?
What timelines, milestones, or review dates should apply?
What timelines, milestones, or review dates should apply?
Will either party pay money, contribute resources, provide staff, or cover costs?
Will either party pay money, contribute resources, provide staff, or cover costs?
Who will own intellectual property created during the cooperation?
Who will own intellectual property created during the cooperation?
May either party use the other party’s name, logo, brand, or marketing material?
May either party use the other party’s name, logo, brand, or marketing material?
Will confidential information be shared?
Will confidential information be shared?
Will personal information be processed under the MOU?
Will personal information be processed under the MOU?
Will the parties work exclusively with each other, or may they work with others?
Will the parties work exclusively with each other, or may they work with others?
Will a more detailed agreement be signed later?
Will a more detailed agreement be signed later?
What happens if the parties fail to agree on the final contract?
What happens if the parties fail to agree on the final contract?
How can the MOU be terminated?
How can the MOU be terminated?
How will disputes be resolved?
How will disputes be resolved?
Which law will govern the MOU?
Which law will govern the MOU?
Who will sign the MOU on behalf of each party?
Who will sign the MOU on behalf of each party?

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