Memorandum of understanding or MOU template is a document between two or more party’s negotiation process for achieving mutual goals and business in an agreement. It shows that both parties are expanding and strengthening their relationship and planning to add some more value to it by exploring more mutual beneficial opportunities.
Let’s find out some free mou templates which are free to download and will get you out of trouble.
What is memorandum of understanding?
- Memorandum of understanding template is a non-legally binding agreement between two parties which outlines the details of that agreement.
- It is a preliminary written document before the formal contract which describes the broad outline of an agreement between two or more parties
- A document that describes the mutual goals and expectations of the parties.
- It indicates that parties are at one page.
- Abbreviation used for the memorandum of understanding is “MOU”.
- Sometimes, it is also referred to a “letter of intent” or “letter of memorandum”.
- It is less complex than formal contract and provide less information about agreement than contract.
- It is the first step before formation of the formal contract.
- Its also called letter of understanding template.
When we need memorandum of understanding templates?
- When you want to work with other organizations.
- When another organization asks to work with you.
- When you and one or more companies work on the same project together.
- When you start a new business with your partner.
- When you need a structure for partnership.
- MOU agreement needs before formation of a formal contract.
What does memo templates include?
- Starting and ending time: Starting date of the project with its completing date should be mentioned in this document for evaluating the time period to complete this project.
- Names of parties: List of all the parties that worked together in this project.
- Describe the project: Describing the outline of the project. It should be less complex and easy to understand.
- Defines the scope of project: Scope of the project describes the processes and resources to complete a project.
- Roles and responsibilities: In this section of the memorandum of understanding everyone’s duties, responsibilities are mentioned. What are the responsibilities of each party. This section of the memorandum of understanding is more detailed than others.
- Financial arrangements: In the section of financial arrangements details about the payments are mentioned. Who pays for what are described in this section.
- Details about risk sharing: Risk sharing is the most important section of the memorandum of understanding. If something goes wrong, who will be responsible for any lost. Name of party or parties are mentioned in this section.
- Signature: Signatures of all the parties at the end of this document are necessary. Signature of all parties indicates that they have the same goals.
Types of memorandum of understanding templates
- Memorandum of understanding for nonprofit
- MOU template for partnerships
- MOU template for services
- Memorandum of understanding between two partners
- Memorandum of understanding template for sale of business
Benefits of MOU
- If one business party wants to collaborate with other then mou helps to make sure that they are generally on the same page.
- It provides the broad outline of the formal contract.
- Helps to establish a positive official relationship between partners.
- Provide information about the scope of the project before the formal contract.
- Help to understand complex project easily.
- It is less complex than formal contract.
- Clearly state the responsibility and role of each party.
- Memorandum of understanding is less formal than handshake agreement.
MOU vs MOA
- MOU stands for memorandum of understanding MOA stands for memorandum of agreement.
- Simple Memo of understanding is used for commercial collaboration and understanding between two or more business parties. Memorandum of agreement is a conditional agreement between business parties.
- MOU describes only common same goals of business parties whereas MOA describes the terms and conditions of the agreement.
- MOA are legally binding documents whereas MOU are generally not legally binding documents.
- MOU describes goals and plans whereas MOU describes details about specific responsibility of each party and details about action to be taken to accomplish their goals.
Hope these free sample memorandum of understanding formats and examples will have you to build yours memo.