A Memorandum of Understanding (MOU) template outlines an agreement between two or more parties in a formal document. An MOU communicates the mutually accepted expectations of the people, organizations, or governments involved in the agreement.
Find out everything you need to know in order to create a clear and effective Memorandum of Understanding.
What is a Memorandum of Understanding (MOU)?
A Memorandum of Understanding (MOU) is a written document that outlines a preliminary agreement between two or more parties regarding the terms of a potential purchase, negotiation, or other transaction.
You can use an MOU to document the commitment of one party to do business with another. It describes the principal terms of a proposed agreement and signals that a binding contract is imminent.
How to Write a Memorandum of Understanding (MOU)?
When learning how to write a memorandum of understanding, it’s important to use the following numbered stages:
- Title: Begin with a specific opening title such as “Memorandum of Understanding between Jane Smith and John Doe”
- Date: Include month, day, and year, showing the date agreement was made, when it goes into effect, and the expected duration
- Introduction of parties. Use each party’s full name and address, corporate or organizational title, and any other contact information
- Purpose and objectives: Clearly define the purpose of the parties’ agreement; objectives of the MOU must be precisely outlined right at the beginning of the document
- Description: Describe the subject matter of the MOU and the reason for its creation
- Terms of the agreement: Typically, these fall into two categories: cooperation and resources. First, the agreement generally explains how the parties will cooperate with each other concerning actions to be performed and which party will perform them. The second category involves resources, and what each party brings to the agreement
- Responsibilities: Outline what each party must do in order to fulfill the agreement
- Miscellaneous: Insert provisions such as dispute resolution options, the method for termination, a non-disclosure agreement, or a privacy clause
- Signature block: Include the words, “Acknowledged and Agreed,” with your signatures and the date
It’s far more efficient to structure a memorandum of understanding using a template. You can produce a memorandum of understanding in minutes with a Legal Templates free step-by-step form builder.
Sample Memorandum of Understanding Template
Here’s what a memorandum of understanding template typically looks like:
Free Memorandum of Understanding (MOU) Template
State of _____________
MEMORANDUM OF UNDERSTANDING
This Memorandum of Understanding (this “MOU”) is made and entered into on this _____ day of
_______________, 20_____ (“Effective Date”) by and between:
________________________ [Name of First Party], residing/located at
________________________________________ [Address of First Party] (the “First Party”)
and
________________________ [Name of Second Party], residing/located at
________________________________________ [Address of Second Party] (the “Second Party”),
both of whom are collectively known as the “Parties,”
WHEREAS the First Party and the Second Party desire to enter into an agreement in which they will work
together to achieve the various aims and objectives relating to the
________________________________________ [short description of the project or project name] (the
“Project”).
AND WHEREAS the First Party and the Second Party are desirous to enter into a MOU between them,
setting out the working arrangements that each of the two agree are necessary to complete the Project.
1. Purpose & Scope. The purpose of this MOU is to provide the framework, the scope of work, terms and
conditions, and responsibilities of the Parties associated with their work on the Project, as attached in
more detailed information for the Project that Parties have agreed upon, if applicable. The obligations of
the Parties will end on _______________, 20_____. ☐ (Check if applicable) Deadlines or deadline
extensions: ________________________________.
As further outlined below, both parties will collaborate on the following:
The main objective(s) of the Project:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
2. The Parties Obligations. The Parties desire and wish that this document will not create any form or
manner of a formal agreement, but rather an agreement between the Parties to work together in such a
manner that would promote a genuine atmosphere of collaboration in support of an effective and efficient
partnership and leadership meant to maintain, safeguard, and sustain sound and optimal financial,
managerial, and administrative commitment with regards to all matters related to the Project.
3. Cooperation. The Parties represent that they have unique, specialized expertise that they will draw
upon to meet the objectives of the Project.
The First Party will use the following unique experiences and expertise to further the objectives of the
Project:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
The Second Party will use the following unique experiences and expertise to further the objectives of the
Project:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
4. Responsibilities.
The First Party shall undertake the following activities under this MOA:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
The Second Party shall undertake the following activities under this MOA:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
5. Resources. The Parties will endeavor to have final approval and secure any financing necessary to
fulfill their individual financial contributions at the start of the Project.
The First Party agrees to provide the following material, financial, and labor resources in respect of the
Project:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
The Second Party agrees to provide the following material, financial, and labor resources in respect of the
Project:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
6. Communication Strategy. Marketing of the Project should always be consistent with the aims of the
Project and only undertaken with the express written agreement of both Parties. Where it does not breach
any confidentiality protocols, a spirit of open and transparent communication should be adhered to.
Coordinated communications should be made with external organizations to elicit their support and
further the aims of the Project.
7. Dispute Resolution. The Parties to this MOU agree that if any dispute arises through any aspect of
this agreement, including, but not limited to, any matters, disputes, or claims, the Parties shall confer in
good faith to promptly resolve any dispute. In the event that the Parties are unable to resolve the issue or
dispute between them, then the matter shall be
(Check one)
☐ mediated in an attempt to resolve any and all issues between the Parties
☐ arbitrated in an attempt to resolve any and all issues between the Parties
☐ mediated and arbitrated in an attempt to resolve any and all issues between the Parties.
8. Governing Law. This MOU shall be construed in accordance with the laws of the State of
_____________.
9. Assignment. Neither Party may assign or transfer the responsibilities or agreement made herein
without the prior written consent of the non-assigning party.
10. Amendment. This MOU may be amended from time to time by mutual agreement of the parties in a
written modification signed by both parties.
11. Termination. This MOU may be terminated by mutual written agreement of the Parties upon _______
days notice.
This MOU shall automatically terminate upon completion of all responsibilities as stated in the “Purpose &
Scope” section. See attached Exhibit of timeline and list of objectives for the Project, if applicable.
12. Prior Memorandum Superseded. This MOU constitutes the entire Memorandum between the
Parties relating to this subject matter and supersedes all prior or simultaneous representations,
discussions, negotiations, and Memorandums, whether oral or written.
13. Understanding. By signing this MOU, both Parties of this MOU mutually agree and understand that:
1. Each Party will take finance and legal responsibility for the actions of its affiliates, officers,
employees, independent contractors, agents, volunteers, and representatives.
2. Each Party agrees to indemnify, defend and hold harmless the other to the fullest extent
permitted by law from and against all actions, demands, claims, losses, liabilities, costs (including
attorney’s costs and fees), and damages. Each Party shall also be responsible for the
proportionate cost of any damages arising from the fault of such Party, its officers, agents,
employees, and independent contractors.
3. Each Party shall carry insurance at its sole expense to cover its activities in connection with this
MOU. Each Party shall also obtain and maintain insurance for general liability, workers’
compensation, and business automobile liability adequate to cover any potential liabilities.
14. Notice. All notices, demands, requests, and other communications given hereunder for purposes
other than termination shall be made in writing and shall be deemed given if:
1. Delivered by hand or
2. Mailed by domestic registered or certified mail with prepaid postage, after ________ days of
business days since the date postmarked
All written notices so given will be deemed effective upon receipt.
Any notices, demands, requests, and other communications returned to the sending Party as nondelivered should be re-delivered or re-mailed to the forwarding address affixed thereto. Such
communications will be deemed delivered in the same way as those that had not been returned to the
sending Party.
15. Severability. Any part or provision of this MOU that is found to be unenforceable, illegal, void, or
prohibited in any jurisdiction will be ineffective without invalidating the remaining provisions and parts of
the MOU. In such a scenario, the Parties will use reasonable efforts to employ and find an alternative way
to achieve the same or substantially the same result as contemplated by such part or provision.
16. Authorization and Execution. The signing of this MOU does not constitute a formal understanding
and as such it simply intends that the Parties shall strive to reach, to the best of their abilities the
objectives stated herein.
The MOU shall be signed by
(Check one)
☐ the First Party
☐ the First Party’s Representative ________________________ [Name], _______________ [Title] and
(Check one)
☐ the Second Party
☐ the Second Party’s Representative ________________________ [Name], _________________ [Title]
and shall be effective as of the date first written above.
____________________ __________________
Signature Date
____________________
First Party Printed Name
____________________ __________________
Signature Date
____________________
Second Party Printed Name
This memorandum of understanding sample was created using an MOU template found in Legal Templates which provides both document builders and a free download and print feature ready for immediate use.
Tips For Writing a Memorandum of Understanding
Ways to approach the structure of a MOU
A good approach to the overall writing of an MOU is to examine whether the MOU has answered the basic questions related to who, what, when, where, and how the agreement will play out. It ensures that potential difficulties are addressed and answered.
Another method of structure that could be helpful is to sandwich each agreement between the words “both parties agree” and ending again with “both parties agree.” Sandwiched between those words is the relevant statement each party individually agrees to. It forms a sort of balance by clearly and repeatedly signifying what is expected of each party in the future.
Keep it simple
By writing the MOU in simple terms it will help to ensure that the terms of the agreement are realistic and actually within the scope of the authority of the signing parties. If not, look for the correctly authorized individual who can sign off on the MOU.
Make sure that the wording is precise and succinct. To help with clarity an MOU should be written using positive language. For example, you should state what a party will do, and not what they will not do.
Coordination and review
Be absolutely sure that all parties sign the agreement. When multiple parties are involved, select a point person in charge of drafting the MOU. Consider submitting a draft agreement for coordination and review by sending the draft out to parties alongside a sign-off sheet. This will ensure the draft MOU has been seen and reviewed by all parties.
Is a Memorandum of Understanding legally binding?
No, a memorandum of understanding is not legally binding. It merely signals the willingness of the parties to move forward with a contract based on the initial MOU.
You may wonder why you should bother with an MOU when it’s not legally binding. Writing the MOU is still a significant step because of the time and effort involved in negotiating, discussing, and drafting an effective document. To formulate an MOU, the parties must figure out what is most important to each other and use that information to reach a mutual agreement.
Why Write a Memorandum of Understanding?
Evidence of intent
There are several situations involving business negotiations or purchase and sale agreements where an MOU is beneficial. For example, banks may require evidence of intent to enter into a deal before they promise to grant financing.
Good faith intention
Without a valid MOU, either party may question the other’s commitment and simply walk away when negotiating terms. The parties can sign an MOU to show each other a good faith intention to work out a deal.
Similarly, parties may know they want to enter into a business deal with one another, but they aren’t quite ready to sign a legally binding contract. An MOU serves to move the deal forward in incremental steps.
Setting expectations
Writing an MOU is also beneficial by setting the expectations of all parties involved. The process frequently begins with each party drafting their own initial MOU, indicating preferred outcomes, ideal terms, and what points may be non-negotiable. This is each party’s starting point for negotiations in producing a mutually accepted MOU agreement.