Contracts and obligations · Legal glossary
Memorandum of understanding (MoU)In Arabic: مذكرة التفاهم
Is a memorandum of understanding binding?Definition
A memorandum of understanding (MoU) is مذكرة التفاهم in Arabic: a document that records what the parties intend. Saudi Arabia has no statute that names it.
How it varies across the GCC
In Saudi Arabia a contract is formed when offer and acceptance meet. Agreement on the essential terms is enough unless the parties tied formation to a point they left open, and a promise to contract binds only if the essential terms and the period are set (Civil Transactions Law, articles 31, 42 and 43). An MoU that states the essential terms and does not say it is non-binding can be held to be a contract. The other states are under review.
The rules that apply to a specific matter depend on the state, any free zone involved and the current text of the law, so check the official source before relying on them.
Basis by country
| Country | Basis |
|---|---|
| United Arab Emirates | Under review |
| Saudi Arabia | No statute names a memorandum of understanding. Civil Transactions Law, article 31: a contract is formed when offer and acceptance meet. Article 42: the essential terms are enough unless the parties tied formation to a point left open. Article 43: a promise to contract binds only if the essential terms and the period are set. |
| Bahrain | Under review |
| Qatar | Under review |
| Kuwait | Under review |
| Oman | Under review |
Sources
Official texts for the points on this page. General information, not legal advice. An article number is cited only where it was verified.
- Saudi Civil Transactions Law, art. 31, 42, 43https://laws.boe.gov.sa/BoeLaws/Laws/LawDetails/655fdb42-8c96-422b-b8c4-b04f0095c94c/1