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socrateaser, Attorney
Category: Business Law
Satisfied Customers: 37808
Experience:  Retired (mostly)
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Does a Memorandum of Understanding - MOU- among two companies,

Customer Question

Does a Memorandum of Understanding - MOU- among two companies, have the same legal enforcement capability of a service contract agreement to be taken to an Arbitrage Court in a commercial dispute?
Submitted: 4 years ago.
Category: Business Law
Expert:  socrateaser replied 4 years ago.
A memo of understanding, if signed by the parties to the contract and clearly expressing the requirements of performance by those parties and the consideration required to obtain payment is an enforceable contract.

However, like it or not, the Republic of China remains a totalitarian state, and whenever a dispute arises between a China organization and a non-China organization, the China organization prevails in nearly every instance, unless the assets at issue are located outside of China and can be subjected to control of the courts of the non-China organization's jurisdiction.

Personally, were I in your circumstances, there is no circumstance under which I would agree to jurisdiction of a China court. But, as a practical matter, because the China organization can always hide behind it's government's protection, the only way to ensure payment for services rendered, is to receive payment in advance, or in ongoing increments, so that the worst that can happen is that you lose your last payment, should the China vendor become unhappy with your services.

Hope this helps.

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Customer: replied 4 years ago.
Ok , so if I sign the MOU it will not be necessary to sign a Consulting Services Agreement after having agreed with the terms and conditions of the MOU expressing clearly the requirements of performance as you suggest.
I agree with youe comment but I think that if I insist in an international court it will be a deal braker.
Expert:  socrateaser replied 4 years ago.
The title of the agreement is irrelevant -- the contents of the agreement is what matters.

Just make sure you're receiving incremental payment, and don't let your desire to perform in good faith cloud your rational mind when it tells you you're getting the shaft, because the client is not making timely payment.

Good luck!