Businesses use these types of documents to summarize the terms of a proposed transaction to guide contract negotiations. The idea is to ensure both parties have alignment on key business issues before moving forward with negotiation of a final agreement. LOIs and MOUs are drafted to be signed by both parties, just like a contract. The problem is that the documents are generally not intended to create binding obligations between the parties. The remedy for breaching an agreement to negotiate is recovery of reliance damages: out-of-pocket costs.”]
Source: https://www.csoonline.com/article/2136616/letters-of-intent-and-memoranda-of-understanding.html