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.