Document background
The Memorandum of Understanding is a crucial preliminary document in Austrian business practice, commonly used when parties wish to document their intentions and understanding before entering into a formal, binding agreement. It serves as a roadmap for future negotiations while typically maintaining a non-binding nature, making it particularly valuable in complex commercial arrangements, international partnerships, and strategic alliances. Under Austrian law, while MOUs are generally non-binding, certain provisions can create legal obligations if specifically intended, requiring careful drafting to clearly delineate binding and non-binding elements. The document typically includes key terms, proposed arrangements, confidentiality obligations, and the framework for progressing toward a definitive agreement, all while operating within the Austrian legal framework, particularly the ABGB (Austrian Civil Code) and UGB (Commercial Code) where applicable.
