A Memorandum of Understanding (MoU) is a kind of agreement between two or more (bilateral) parties. It expresses a convergence of will between the parties and indicates a planned common line of action. It is often used either in cases where the parties do not imply a legal obligation, or in situations where the parties cannot conclude a legally enforceable agreement. It is a more formal alternative to a gentlemen`s agreement.   In 1987, ISDA issued three documents: (i) a standard form framework contract for interest rate swaps in United States dollars; (ii) a standard framework contract for interest rate and currency swaps denominated in several currencies (collectively referred to as the `1987 ISDA framework contract`); and (iii) definitions of interest rates and currencies. In the UK, the term MoU is often used to refer to an agreement between certain parts of The Crown. This term is often used in the context of decentralisation, for example in the 1999 Concordat between the Central Ministry for Environment, Food and Rural Affairs and the Scottish Environment Directorate. This concept of an individual contract is an integral part of the structure and part of the compensation-based protection offered by the Framework Agreement. The fact that all transactions are the only contract enhances the ability to enter into those transactions and obtain a single net amount to be paid in the event of default. Together with the schedule, the framework contract sets out all the general conditions necessary for the proper allocation of the risks of the transactions between the parties, but does not contain conditions specific to a given transaction. Once the framework agreement has been concluded, the parties can conclude many transactions by granting the main terms of sale by telephone, as evidenced by written confirmation, without the need to review the underlying terms of the framework agreement. The Framework Agreement also helps to reduce litigation by providing significant resources that define its terms and declare the intent of the Treaty, thus preventing the commencement of disputes and providing a neutral resource for the interpretation of standard contractual terms.
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