In India, a Letter of Intent (LOI) generally carries more legal weight than a Memorandum of Understanding (MOU) during preliminary business sale stages. An LOI outlines the buyer’s commitment and key terms, often including binding clauses like exclusivity or confidentiality, whereas an MOU is usually non-binding and serves to record mutual understanding.

In India, a Letter of Intent (LOI) generally carries more legal weight than a Memorandum of Understanding (MOU) during preliminary business sale stages, especially if it includes binding clauses like exclusivity, confidentiality, or break fees. An MOU is usually seen as a non-binding statement of intent, outlining broad terms without enforceable obligations. Emotionally, signing an LOI feels like a serious handshake on paper it signals commitment and builds trust, while an MOU feels more like a conversation starter, giving both parties a chance to explore the deal without pressure.

In India, a Letter of Intent (LOI) is more commonly used and generally carries clearer legal weight in business sales. While both LOIs and MOUs are largely non-binding, an LOI typically defines key commercial terms and exclusivity more precisely. Courts focus on the intent and wording, making specific clauses (like confidentiality or exclusivity) enforceable in either document.