Document background
The Memorandum of Intention is a crucial preliminary document in South African business practice, typically used when parties are ready to formalize their interest in a potential business relationship but are not yet prepared to enter into a binding agreement. It serves as a roadmap for further negotiations and due diligence, outlining key commercial terms, timelines, and responsibilities while maintaining flexibility. This document type is particularly valuable in complex transactions where detailed investigation and negotiation are required before finalizing a binding agreement. While governed by South African law, the MOI can accommodate international business practices and standards, making it suitable for both domestic and cross-border transactions. It typically includes provisions for confidentiality, exclusivity periods, cost allocation, and basic transaction structures, while clearly stating its non-binding nature except for specifically identified clauses.
