Document background
The Memorandum Of Understanding Between Supplier And Buyer is a crucial preliminary document used when two companies intend to establish a business relationship but are not yet ready to enter into a fully binding contract. This document, governed by German law and incorporating principles from the BGB and HGB, typically precedes more detailed supply agreements or master service agreements. It outlines the basic commercial understanding, confidentiality obligations, and framework for cooperation while maintaining flexibility. The MoU is particularly valuable during initial negotiations, helping parties align their expectations and document key points of understanding while conducting due diligence or finalizing commercial terms. It's especially useful in complex supply relationships where detailed agreements may take time to negotiate, or when parties need to establish basic principles before committing to a full contractual relationship.
