A memorandum of understanding template can be very useful if you need to enter into negotiations with two or more parties involved in the development of a product or a sale. The parties involved can use the memorandum of understanding template to help them figure out a legally binding way to complete negotiations.

You might need this kind of document if you are developing a professional contract of some kind. The parties involved in the negotiation process will use the memorandum of understanding template to help them to progress through the stages of creating a business agreement that all parties agree upon.


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Memorandum Of Understanding Templates

Can you write a Memorandum of Understanding Letter?

If you need to have access to a memorandum of understanding template to use as an official document related to the creation of a formal contract, you can draft your own MOU template. A memorandum of understanding template can be very helpful in securing a mutual agreement related to a sale, a business connection of some kind, or the development of a product. This is not a legally binding document, but it can help two or more parties to progress toward a finalized business relationship.

Knowing more about what needs to be included in the memorandum of understanding will help you to make sure that the entire agreement is created correctly and that the parties involved can agree on the nature of the relationship in question.

MOU Templates

Can I send a Memorandum of Understanding to Start Negotiations?

The memorandum of understanding document is commonly used to help parties agree on business arrangements of various kinds. This is often the first step toward generating a legally binding document down the road that will finalize a sale or business agreement of another kind.

You can think of the memorandum of understanding as the first step to a much longer process. That does not mean that you do not need to draft a correct memorandum of understanding, however. The document that you create during this first stage of the business process will help the parties acknowledge what is necessary to create a lasting partnership.

How an MOU Agreement Works

The MOU is an indicator that both parties involved in a business agreement want to proceed with the process. The entire agreement will change over time, but this first step will help the two parties to start discussing what is necessary to create a lasting business relationship. The MOU template is a lot like a letter of intention and is commonly used to make sure that intellectual property and other provisions are going to be protected throughout business discussions.

The MOU template is most often used for international business discussions because there are often details related to governing law and non disclosure agreement details that need to be outlined before more sensitive details are brought up. This written document offers an indication that parties from different countries or places in the world will agree to work out the remaining provisions to create a partnership that is fair for all parties involved.

Contents of an MOU Agreement

As with other legal documents, there are specific kinds of information that need to be included in your memorandum of understanding:

  • You will need to clearly name both parties involved in the agreement.
  • You will also need to be sure that governments and other entities are clearly listed if they also have a stake in the agreement in question.
  • Once the parties involved in the deal are clearly outlined, you will also need to name the project or agreement and define its scope.
  • All the various aspects of the agreement will need to be clearly stated so that there is no confusion about what the contract will be about. This agreement could be related to a business merger, the creation of a product, or the arrangement of things like trade and sales. No matter what the MOU is going to govern, all of the relevant information related to the project needs to be carefully and completely described in the MOU template.
  • All non-negotiable parts of the agreement will need to be outlined after the parties are named, and the project is carefully described. Each party involved in the agreement will be likely to have limitations that they want to place on the project and the actions of the other parties who are involved in the deal.
  • Whether your agreement is between two parties or there are many different entities involved in the agreement, all of the non-negotiable items related to each party’s demands will need to be carefully explained in the MOU.

MOU Examples

What to Include in An MOU

  • The parties or businesses who are going to enter into the agreement. These entities need to be indicated by full legal name. No nicknames or shortened versions of business names should be used for this part of the documentation.
  • The purpose of the partnership. This does not have to be highly detailed, but this part of the MOU should indicate if this MOU is meant to create a business relationship to generate income, an agreement to protect trade or another kind of partnership agreement.
  • The goals of each party. This can be as detailed as necessary to make it clear what each party is intending to achieve by entering into the relationship in question.
  • The duties of each party. While there will probably need to be more extensive discussion and documentation of the responsibilities of each party involved in the agreement, the MOU will give a higher-level look at what each party will be expected to do if they enter into this agreement. The MOU allows all the various people or businesses involved in an agreement to discuss what they should or should not have to bring to the table during the time that the agreement is active.
  • Timeline related to the project. This part of the MOU will explain what the milestones should be for the project’s processes and might also indicate the expected lifespan of the agreement between the various entities who are contributing to the MOU.
  • Confidentiality clauses are often added to make sure that the various parties who are discussing the project do not share information with those who should not have access to it. There might be intellectual property involved in the discussion, proprietary developments, as well as secret information that should not be shared with others outside of the project discussion group.
  • The process for resolving disputes should also be outlined. This is often one of the places where business discussions can break down. Having a dispute discussion process outlined in the MOU can be very helpful for a whole host of reasons. While the actual dispute resolution process might look different when the contract is made legally binding, having a rough idea of how these disagreements will be handled can be key to transparent discussion.

Is a Memorandum of Understanding Template Legally Binding?

This document is not actually legally binding on its own. The MOU allows for discussion to begin and fosters an environment that will hopefully allow for the creation of legally binding agreements between the groups involved in the project. The memorandum of understanding document can also help to indicate intent and help the parties who are interested in the deal to agree on the various moving parts and considerations that they all wish to keep in mind.

Is there a Difference Between an MOU and an MOA?

The MOU and MOA can seem like they are essentially the same document. However, the MOU template is used to help parties start the process of discussing a business relationship, while an MOA (memorandum of agreement) is used to detail the various responsibilities of each party involved in a specific project.

  • The MOU will precede all of the other various agreements and provisions that need to be discussed between the various parties involved in a deal.
  • More specific documentation, like the MOA, will often follow as the project or agreement becomes more clearly defined.

The MOU protects companies or individuals from jumping into a business relationship that is not clearly defined or is a handshake deal. Having documentation to point back to that indicates the nature of the original proposed agreement can help to clarify the later stages of product development.

Memorandum Of Understanding Samples

Can I Write My Own MOU?

You can choose to write an MOU on your own, but in most cases, a lawyer will take care of this task. There are many complexities involved in the creation of these documents, and a working knowledge of international law is often required to create an effective document that can be used for this purpose.

Competent jurisdiction might have trouble working with the details that are included in a free memorandum that you have modified only slightly to meet the needs of your agreement. There are often so many moving parts involved in this kind of document creation process that one party should not write the document based on a generic template.

Disadvantages and Advantages of the MOU Document

There are many advantages to using the MOU document to help you create a working agreement between parties involved in a business deal or another kind of project. This document helps everyone who is going to have to come together to work on the project to be clear about the scope and nature of the intended job in question. When working on agreements and negotiations related to a business arrangement, the MOU can help all parties agree on the terms of the contract that will eventually be drafted.

These agreements are very common and related to international trade and intellectual property. This is because they can be created quickly and in private and do not require that a board of directors or other party agree to the details in the MOU. While later discussions and contract negotiations will need to be done related to the finalized agreement, a few parties can get the proposed actions on paper when creating an MOU.

However, there is one significant disadvantage to the use of the MOU document. This document can require significant changes is one or more parties do not want to proceed as originally discussed. It is also not legally binding, which makes is mostly useless in a court of law. You could use this document to begin the process of creating a legal agreement only to be told that it is of no use when one party decides to change a lot of the details of the agreement.

While it might seem like drafting an MOU is not worth the time if this is the case, having an actual paper trail related to the process of creating a business agreement or project can be a big help down the road. Assuming that everyone involved in the deal keeps to their word and doesn’t change their plans significantly, having an MOU in hand can help to make the rest of the process of creating a business agreement easy.

Memorandum Of Understanding Examples

The Memorandum of Understanding Template Can be Very Useful

Having a memorandum of understanding template on hand can be a big benefit if you work in certain industries or are involved in international business relationships. There are many reasons that the MOU can foster more effective communication between parties, and this document can help outline the various needs of business partners or those who are considering working on a project together.

While the MOU itself will not be legally binding in most cases, having a paper trail in place that shows the nature of the intention of the project can help foster more effective communication between parties. No matter how many groups or entities are involved in business discussions, a MOU can be a big help when it comes to taking steps toward a more permanent, legally binding relationship. It is a good idea to have a lawyer draft this document for you as there are many moving parts and lots of international or intellectual property laws that are typically involved.

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Tagged:BusinessMemoMemorandumMemorandum of Understanding
TemplateLab October 2nd, 2023
Ryan Duffy
Ryan Duffy