Document background
The Memorandum of Interest (MOI) is a crucial preliminary document used in German business practice when parties wish to formally express interest in a potential transaction or cooperation without creating binding obligations. It serves as a stepping stone between initial discussions and more formal agreements, providing a structured framework for negotiations while maintaining flexibility. Typically used in scenarios such as potential mergers and acquisitions, joint ventures, or strategic partnerships, the MOI outlines the basic parameters of the contemplated transaction while explicitly preserving the parties' freedom to withdraw. Under German law, while the main provisions are non-binding, certain sections such as confidentiality and exclusivity clauses can be made binding. The document must be carefully drafted to avoid unintended obligations under German pre-contractual liability principles.
