Document background
The Memorandum of Understanding For Supply Of Goods is commonly used in Hong Kong business practice as a preliminary step before entering into a formal supply agreement. It is particularly valuable when parties need to document their initial understanding and commercial intentions while maintaining flexibility for detailed negotiations. This document typically includes key commercial principles, proposed supply arrangements, basic pricing structures, and timeline expectations, while preserving the generally non-binding nature characteristic of MOUs. Under Hong Kong law, while most provisions are non-binding, certain clauses such as confidentiality and exclusivity can be drafted to have binding effect. The document serves as a roadmap for future negotiations and helps parties align their expectations before committing to a definitive agreement.
