MOI can be legally binding below a number of conditions against the will of the two parties. On the other hand, by accepting a memorandum of intent at a primary stage, in due course, the chances of negotiating a better deal in a later stage is hindered. In case one takes much time to accept a memorandum of intent, then this can efficiently lead to the business contract being negotiated two times (Claeys, 46). Competition and global laws are applicable to the memorandum of intent. According to Claeys, heads of terms can be very significant for making the MOI successful and enable parties to create huge business contracts p. 60. Finally, there is a need to be aware of the drawbacks associated with Memorandum of Intent. In fact, it is advisable not to use MOI in easy or small business transactions.
EIU stands for Economist Intelligence Unit.