What is a Memorandum of Understanding?

A memorandum of understanding, often abbreviated to MOU, is the formal document that describes the outlines of an agreement between two or more parties after negotiations have concluded. Although it cannot be considered legally binding, it still signals what intentions the involved parties have so that they can move on with a contract. Under the laws of the United States, this shares the same function as a letter of intent, making them virtually indistinguishable from one another.

How to Write a Memorandum of Understanding?

memorandum of understanding template

Regardless of whether you want to come up with an army memorandum of understanding, a nonprofit memorandum of understanding, or even the more common business partnership memorandum of understanding, it is vital to learn its common creation steps. This does not have to be a particularly difficult document to create, so pay close attention to the following. In doing so, you will ensure that your overall experience is as easy as it can be and hassle-free.

1. Be Clear On Your Overall Understanding and Needs

Before you even start working on the document, you must first be clear on whether you understand what it is for or not, as well as whether this is truly what you need. Being unclear on any of this will only lead to time being wasted on your part and perhaps for others as well.

2. Specify The Organizations/Parties Involved and The Agreement’s Context

Considering that this is a document that is only made when there are parties in need of it, then you should state who these organizations or parties are, along with why there is a specific need for it. It pays to be as detailed as possible, to ensure that there is nothing left out or neglected.

3. Explain The Principles and Values of The Agreement

Part of making sure that the memorandum of understanding does not become legally blinding would the proper organization of its written structure. In this section, the values and principles that you or any of the involved parties wish to bring to the table for this simple agreement must be thoroughly stated and explained.

4. Explain Who Does What and The Expected Outcomes

Each of the parties involved must have their own role to play as agreed upon by one another. Be sure to explicitly state and explain the responsibilities and job descriptions that are assigned to a particular party, as well as what kind of outcomes are expected from their activities.

5. Specify Which Parts Are Meant To Be Binding and Which Aren’t

In general, a memorandum of understanding is not going to be legally binding and valid, but there are certain parts where you may want to expressly state that it is the will of the parties to enforce it. Some would find it disastrous if their MOU was made legally binding by accident due to the way it was carelessly written, so take extra care to specify which should be binding and which shouldn’t be.