Standstill Agreement
Definition:
A standstill agreement, also known as a letter of understanding or a memorandum of understanding, is a non-binding agreement between two or more parties that temporarily suspends any actions or activities related to a matter until a subsequent agreement or resolution is reached.
Key Elements:
- Parties: Two or more parties involved in the matter.
- Subject Matter: The specific issue or topic on which the standstill agreement applies.
- Duration: The period of time during which the standstill agreement is in effect.
- Commitments: The actions or activities that each party agrees to refrain from during the standstill period.
- Confidentiality: Provisions for confidentiality, if necessary.
- Exceptions: Any exceptions to the commitments agreed upon.
- Process: Procedures for resolving any disputes or issues that arise.
Purpose:
- To prevent further escalation or action while negotiations or a resolution is sought.
- To maintain the status quo and prevent harm to parties.
- To facilitate discussions and create a platform for potential agreement.
- To provide a cooling-off period for parties to consider their positions.
Examples:
- Commercial disputes between parties.
- Labor negotiations between union and management.
- Mediation or arbitration processes.
- Settlement negotiations.
Note:
Standstill agreements are non-binding and do not create any legal obligations. They are typically used as a temporary measure to temporarily halt actions or activities pending further agreement or resolution. They should be clear, concise, and mutually acceptable to all parties involved.