Giambrone Law - Memorandums of Understanding

Giambrone Law defines a Memorandum of Understanding as a form of agreement, usually between two or more parties which is legally binding and expresses the parties willingness to either enter into a merger, or to do business. It is an indication that an acquisition, merger or partnership is being seriously considered, and that both parties intend to have further discussions before they enter into a contractual, legally binding agreement. The idea behind a Memorandum, Giambrone Law explains, is to promote a good standard of cooperation between those who intend to do business together; it creates a framework which the parties can use to facilitate negotiations on subjects on mutual interest. In addition, it can also be useful for the clarification of responsibilities and roles. See here for more law info Even though a Memorandum of Understanding is not an office legal commitment, and as such, lacks the binding authority which a contract has, it is akin to a gentlemens agreement and can be helpful. It does however rely on the parties honour in order for it to be fulfilled and cannot be enforced within a court of law. Generally speaking, the legal system in Italy does not recognise structures such as Memorandum, which are created during the course of negotiations before a contract is drawn up. However, a Memorandum can be created along with a preliminary contract, with the latter stating an agreement between the two parties involved that a transaction will be completed by a specific date. In this case, the preliminary contract would be legally binding and a breach of it would give rise to liability. Moreover, under Italian law, using the term Memorandum of Understanding will not be sufficient to prevent the document from being legally binding; the parties involved cannot unjustly withdraw from the transaction and are still expected to act in good faith, in accordance with the Italian Civil Code which regulates pre-contractual responsibility. However in England, these preliminary documents, be they contracts or Memorandums, are never considered to be binding in a court of law, unless they happen to include the agreements material terms.