MOU is binding on parties
you cannot reject MOU
the second party would sue you for breach of contract
Can I reject an MOU which legally binded
I'm currently in a partnership business in which i had issues with my partner. Before that I (me and my friend )acquired land 75% of land and 25% acquired by the other partner and 50% of business share to each of us in so called firm ,So i wanted to settle this matter by writing an MOU and we did and signed by all the parties my partner me and my friend. Later our family members not interested in selling (family members wanted buy the ramaining share of the other partner and the other partner also likely to sell his share ) The MoU is written as follows The first party given time to second party of 75days to mobilize the money if not the second party given time of 30days to the first party to mobilize the money to second party.if both parties fail partnership will continue. If the second party mobilize the money within the given time then the fisrt party should execute sale deed and partnership deed dissolution ( first party include A &B persons A person has 50%partnership share and 25% land acquired in business under his name and B person has 50%land acquired under his name ) If the second party fails in mobilize the money in given time then first party will mobilizes the money and second party has to execute the sale and partneship deed dissolution. The first party and second party signed the MoU and also MOU consists of Jurisdiction clause in it. After sigining this MOU the first party family members wanted to buy the share of second party so the first party wanted withdraw from MOU is it possible? What are the possibility does the first party have?
Asked 5 years ago in Business Law
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19 Answers
- As per Section 10 of the Indian Contract Act, all agreements are contracts if they are made by the free consent of the parties competent to contract, for a lawful consideration and with a lawful object and are not expressly declared to be void.
- Further, a MOU is a statement of understanding between two or more parties which when made has no enforceability in the eyes of law , as such an agreement has no intention to create a legal bond between such persons.
- But , when an MOU has been made as per section 10 of the Indian contract Act, then it is a valid agreement.
- Further, if the MOU contains its expiration , then it lost its value , otherwise , the limitation period to challenge an MOU is 3 years from the ate of its execution .
- Hence , if the said MOU is not registered and stamped , then it is not a valid document to be produced in the court , and you can withdraw from MOU
- Further , if registered , then it can be cancelled mutually or after executing a Cancellation deed or otherwise a Court order is need for the same.
The unregistered MOU entered between A and B cannot be legally enforced through court of law even for breach of conditions.
The MOU is between two partners of the firm.
The family members of the partners cannot interfere in the partnership business nor in its dissolution or even in the MOU entered between them.
Therefore the decision taken can be on an amicable note alone and not through legal terms.
The partners can take decision as per their understanding without involving the family members to dominate in it and spoil the entire show or peaceful process.
The partners can be little flexible in arriving at a final decision so that the things are settled peacefully.
If you withdraw from mou then the other party may file suit against you for performance. You need to prove there that there is no loss if the said mou is not adhered to. If court finds that mou withdrawal has caused monetary damage it may grant it.
Dear Sir,
The said deed is quite self explanatory in nature and there is enough flexibility for both the partners and it is suggested not to evade from the said deed/MOU.
A MOU is merely a statement of understanding between two or more parties which when made has no enforceability in the eyes of law as such an agreement has no intention to create a legal bond between such persons. As a result of which, if in case there is a breach of such MOU there is no relief.
It can be done if both the parties agree to the compromise. The court honours family settlements or settlements between partners.
Every thing is possible and executable under the provisions of law provided it is strictly followed through.
In your case, Please provide the details of ddmmyy of MOU to ascertain the time and period of limitations to execute it.
Please provide time duration clause mentioned in MOU for the execution of regular agreement between the parties for registration of documents and formation of partnership firm and registration under Indian Partnership Act 1932.
Review of documents is essential to answer your questions lawfully and satisfactorily to advice you for next steps as per the provisions of law.
1. MOU has no legal enforceable value, during legal disputes, in a court of law, more specifically for transactions related to "immovable properties".
2. ALL the points mentioned by you should be in the form of an Agreement, which is stamp duty paid and registered. ONLY an agreement can be legally enforced. Further this will also be required for mutation /transfer and for income tax purposes.
Is this MOU executed on stamp paper ? If yes than first cannot withdraw from MOU without consent of other party or till time given in the MOU expire.
This MOU is done on stamp paper but not registered or Notarized only a Jurisdiction clause mentioned in it. The second party has time to pay the from june 15 2020 to August 31st 2020. If he fails The first party given chance to pay the said amount to second party within 1st september to 30th september 2020. As per discussion with the second party he wanted to close this matter now also if he got paid more money than it is mentioned in MOU. The second party is asking more money without adding depreciation to the machinery . The first party saying who will pay the full amount(new machine cost) to the 4no's 8year old machines 1no's 4year old machine 2no's 3year old machines. The first party did an enquiry regarding the depreciation percentage per year and knew that the depreciation is 15% per year. The first party also asked the second we only add 10% depreciation per year to the machinery and we pay the amount whatever it sums up to . The second party said no to fisrt party offer . We wanted to settle the second party amount genuinely but the second party is not okay with that. Actually before writing the MOU there was a discussion between the first party and second party. The second party said that he will pay 3.75 to first party and then the first party asked the second party that if he fails to pay that in 2.5months then the second party has to agree an amount of 1.75 .Firstly the second party didn't agreed to that (4parts land in total 3parts are in first party side and 1part land on second party side and total machine cost is 1.5 according to depreciation cost so .75 is each one share in machinery) after 15days the second party agreed to 1st party proposal. We asked 2nd party before writing mou that if 2nd party willing to take the amount 1st party to ready to pay it within a month but he wanted get the first chance . If 1st party want pay first then we have to pay 2.5 to 2nd party which is not fair
Asked 5 years ago
Take the defence that MOU is not stamped and hence not admissible in evidence
Take the defence that MOU is not stamped and hence not admissible in evidence
Take the defence that MOU is not stamped and hence not admissible in evidence
If you find that the second party is honoring the MOU, you may discard the MOU and proceed legally.
The unregistered MOU is not enforceable in law neither the court will entertain any such case.
Therefore you may proceed legally as per law.
If you find that the second party is honoring the MOU, you may discard the MOU and proceed legally.
The unregistered MOU is not enforceable in law neither the court will entertain any such case.
Therefore you may proceed legally as per law.
If you find that the second party is honoring the MOU, you may discard the MOU and proceed legally.
The unregistered MOU is not enforceable in law neither the court will entertain any such case.
Therefore you may proceed legally as per law.
If you find that the second party is honoring the MOU, you may discard the MOU and proceed legally.
The unregistered MOU is not enforceable in law neither the court will entertain any such case.
Therefore you may proceed legally as per law.
Dear Sir,
It is suggested with all due regard that the our advice depends totally on the query and input provided by you. In the follow up question, it is clear that the second party is not doing right things and in that case breach of the MOU is being done by him.
You can challenge the registration ground to deny its binding factor on you.
It is now clear that the MoU is, though, prima facie is not legally binding, it solely depends upon the intention of the parties and negotiation takes place between the parties. It can also be said that it is partly binding and partly non-binding in nature. Moreover, whether MoU will be binding or not can be decided by the Court by looking into the contents of the contract.
Agreement to sell is unregistered shall have no effect for the purpose of Section 53A. It means that agreement to sell which is unregistered cannot be admissible as evidenc
- Legally unregistered MOU is not admissible before the law, but can be produced before the court with other evidence .
- Hence, both the parties are bound with the clauses of the agreement .
You can file a declaration suit for declaring the MOU null n void.
1. MoUs are legally binding upon both parties so withdrawing from MoU will not be possible.
2. You need to negotiate the terms for cancellation of MoU and partnership deed.
