Understanding MoUs in the Indian Contract Act: Legal Standing and Key Cases?

sunnyjain121991
Hello sir, please help me out. My question is:

a) In which section of the Indian Contract Act, 1872, is an MoU mentioned?

b) Is it enforceable in a court of law?

c) Are there any landmark cases related to it?

Regards,
Sunny Jain
kknair
Understanding MoUs and Contracts

An MOU is loosely described as a prelude to a contract and is not a contract in itself. An MOU is an agreement, but only agreements enforceable by law are contracts. Therefore, not all agreements are contracts. To render an agreement into a contract, there must be mutual obligation, the object of the agreement must be legal, the parties must be competent to contract, there must be free consent of the parties, and lawful consideration.

In deciding whether an MOU is a contract or not, the courts will not rely solely on the terminology used but will decide based on the aforementioned criteria. Therefore, the facts of the matter must be considered.

Regards,
KK
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