Document background
The Joint Venture Memorandum of Understanding (MOU) is a crucial preliminary document used in South African business transactions when two or more parties intend to explore and establish a joint venture relationship. It serves as a foundation document that captures the parties' initial understanding and intentions while providing a framework for further negotiations. This document is particularly important in the South African context as it needs to address unique local requirements such as B-BBEE compliance, competition law considerations, and specific industry regulations. While most provisions of the MOU are non-binding, certain sections such as confidentiality, exclusivity, and costs are typically drafted as legally binding commitments. The document is commonly used during the early stages of joint venture discussions to align parties' expectations and guide the development of detailed, binding agreements.
