Which term describes an agreement between two parties that is not binding?

• A. Contract
• B. Memorandum of Understanding (MOU)
• C. Project Charter
• D. Deliverable

Answer: (B)

The main idea here is a document that signals two parties intend to work together but doesn’t create enforceable obligations. A Memorandum of Understanding describes that intent, laying out general terms, roles, and responsibilities without binding the parties to a legal commitment. It often serves as a starting point for negotiating a later binding contract, which is why it’s considered non-binding. In contrast, a contract creates enforceable obligations, a project charter authorizes and defines a project within an organization, and a deliverable is the actual product or result produced. That combination is why this term is the right choice.