Document background
The Memorandum of Understanding For Supply of Goods is commonly used in Malaysian commercial practice as a preliminary step before entering into a definitive supply agreement. It is particularly useful when parties have agreed on basic commercial terms but need time to finalize technical details, conduct due diligence, or obtain internal approvals. The document typically includes provisions regarding product specifications, pricing principles, delivery terms, quality standards, and the pathway to a definitive agreement. While governed by Malaysian law and following local commercial practices, it maintains a non-binding nature except for specific provisions like confidentiality and exclusivity. This type of MOU is especially relevant in cross-border transactions where Malaysian companies are engaging with international suppliers or buyers, or in domestic supply arrangements where parties need to document their preliminary understanding.
