Memorandum of Understanding (MoU) Drafting & Review

Overview

Plenty of property deals begin with a conversation and a handshake, long before anyone is ready to sign a sale agreement. A Memorandum of Understanding, usually called an MoU, is how that early understanding gets written down. It records the basic terms the two sides have agreed in principle: the property, the proposed price, the token amount, the timeline and what each side will do next.

An MoU is not the same as a sale agreement or a sale deed. Whether it is binding depends on how it is worded and what the parties intended, and courts look at the actual language rather than the title on top of the page. A loosely written one can create obligations nobody meant to take on, while one that says too little may leave you with no protection for the token money you paid. The clauses on refund of advance, exclusivity, due diligence and the date by which the formal agreement must be signed are the ones worth getting right.

We draft MoUs from scratch for buyers and sellers, and we review ones that have been handed to you, pointing out clauses that are one-sided, vague or missing. Stamp duty on an MoU varies by state and by how the document is classified, so we also tell you what stamping and notarisation yours is likely to need. If the deal goes ahead, the MoU becomes the base for the sale agreement.