Prior to business transactions take place, usually first conducted preliminary negotiations. Negotiation is a process attempts to reach an agreement with another party. In this negotiation bargaining process takes place. The next stage is making Memorandum of Understanding (MoU). The MoU is a recording or documenting the results of these initial negotiations in writing. The MoU is important as a base for further use in advanced negotiations or as a basis for conducting a feasibility study. Nowadays, MoU has been used by many local businessman. The problem is, MoU is not recognized in our civil law, because the Indonesia Civil Law adhere to the principle of freedom of contract, so this raises questions about the legal status and legal power of MoU. The assumption that arise in the society is, when one of the party commited breach of contract, there is no legal sanctions for the party, but only a moral sanction. The purpose of this legal research is to find out whether MoU has the legal status and power as well as contract judging from Indonesia Civil Code and theories supported by legal experts. The research methods used in this research is normative legal research, furthermore used statute approach and conceptual approach. Despite MoU is not recognized in our civil law, it still categorized as contract based from Indonesia Civil Code. MoU meet all the elements in the validity of the agreement terms based from Indonesia Civil Code. Thus, the parties who make MoU is bound to fulfill the obligations that contained in the agreement. When one of the parties commited breach of contract, they can be sued legally and forced to give compensation because of the violations they made.