A memorandum of understanding (MOU) is an agreement between two or more parties to collaborate on a project or venture. While less formal than a contract, it is still a more official agreement than a handshake. Use our MOU template to outline the intentions of each party for future purchases, potential partnerships, and other business relationships.
This Memorandum of Understanding (MOU) is entered on the (number) day of (month) in (year) (herein referred to as the "Effecitve Date") into by and between:
[PartnerA.FirstName] [PartnerA.LastName] of [PartnerA.Company] of [PartnerA.StreetAddress] [PartnerA.City] [PartnerA.State] [PartnerA.PostalCode] (herein referred to as "Partner A") and
[PartnerB.FirstName] [PartnerB.LastName] of [PartnerB.Company] of [PartnerB.StreetAddress] [PartnerB.City] [PartnerB.State] [PartnerB.PostalCode] (herein referred to as "Partner B"). Parties may be referenced individually as "Party" and collectively as "Parties".
A simple template for a memorandum of understanding can be your starting point for negotiations. During the negotiation process, both parties’ requirements are reviewed to reach a mutually agreeable solution. Under U.S. law, the memorandum of understanding is similar to a letter of intent.
WHEREAS , Partner A is in the business of (Enter specific business activities here. Include information on the business' industry, specialized expertise, market presence, organizational mission, and other details relevant to the potential partnership).
WHEREAS, Partner B is in the business of (Enter specific, relevant business activities here).
WHEREAS, Partner A desires to (Enter Partner A's intention for the partnership. For example: "engage with a strategic partner to manufacture specialized parts at a competitive rate" or "engage with a marketing partner to achieve better advertising return on investment").
WHEREAS, Partner B desires to (Enter Partner B's intention for the partnership).
WHEREAS, Parties collectively desire to enter into this MOU to memorialize the terms and conditions of their anticipated collaboration.
A memorandum of understanding can involve more than two parties in the transaction and drafting process.
NOW, THEREFORE, the Parties agree to the following terms and conditions:
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An MOU is a voluntary agreement between two parties that serves to formalize general requirements and confirm common goals and intentions. Its purpose is to allow parties to negotiate the terms of their cooperation in advance, creating a more defined framework for their future relationship.
The purpose of this MOU is to establish a good-faith foundation between the Parties for future collaborative efforts that are mutually beneficial. The Parties agree to work together in a cooperative and coordinated manner to achieve each Party's individual desires and the collective desires of the partnership. This MOU is designed to detail the specifics of the working relationship between the Parties to vet the success of the potential business collaboration. This MOU does not obligate the Parties to provide funds or payment. This MOU does not bind Parties to any legal obligations.
MOUs aren’t legally binding but serve as a paper trail for parties interested in doing business together. Each party must dedicate effort to draft and understand the terms of their collaborative interests.
To achieve Parties' mutual desires, each party agrees to the following roles and responsibilities.
Partner A Roles and Responsibilities shall include (Enter Partner A's responsibilities here. Be as specific as possible, and list the information directly related to Partner A's business and desires as put forth in the recitals. Include details such as reporting requirements, purchase dates, deadline dates, and other pertinent information that needs to be noted).
Partner B Roles and Responsibilities shall include (Enter Partner B's responsibilities). Parties agree to uphold their roles and responsibilities in a committed, good-faith manner.
The Parties agree to: i) meet or correspond as needed to plan ahead and try to determine all the relevant information of the proposal; ii) each entity shall use their greatest effort to compile all the transcripts, relevant information, and data required for the development of the initiative and to supply them to the Facilitator in due time. This is done with the intention of preparing and submitting the project in a timely manner.
The Coordinator agrees not to change any report, relevant information, or data provided by the Facilitator without prior approval. The Facilitator will update the Parties of the project's preparation status and will provide a copy upon request from any party of any correspondence (letters, emails, etc.) pertaining to the project.
To further the business relationship between the Parties, the Parties agree to provide the following resources.
Party A shall provide (Enter resources here. This could include delivering services, dedicating specialized staff, applying technology, or providing financial resources. As always, be specific and include purchase amounts, descriptions of specialized skills, and other pertinent information that needs to be noted).
Party B shall provide (Enter resources here).
Parties, at a minimum, agree to provide the resources listed above. The Parties may agree to provide additional resources in future agreements.
This Agreement may only be amended by the Parties with the express written consent of the Parties themselves and, if applicable, independent committee members. In the event that such acceptance is required by standing voting securities in the portfolio, the necessary shareholder approval will be given with regard to the portfolio.
The Parties must engage in a good-faith negotiation before making any significant changes to the Project from how it was described in the proposal. Despite the aforementioned, the Coordinator may accept adjustments or modifications to the work packages only with the prior written authorization of the Parties involved.
The MOU may be modified or altered as necessary with the consent of both Parties. Any changes must be made in writing to be enforceable by a team member with authority.
The Parties will, at the very least, review the MOU once every year, or sooner if mutually agreed upon. Any modifications to the MOU, including those pertaining to any timeframes, will be detailed in writing. Upon giving the other Party 30 days' prior notice, each Party may submit a written petition to renegotiate the MOU.
Listing a confidentiality provision in your MOU explains that you intend to keep confidential information during the working relationship. You may also use a non-disclosure agreement, which is more legally binding than a memorandum of understanding.
Parties agree that they each use confidential, sensitive information to achieve their individual business goals. Due to the nature of the Parties' businesses and intent to establish a working relationship together, confidential information may be shared between the Parties.
The Parties agree to keep all confidential information and trade secrets in the strictest of confidence during the working relationship. Parties may not share any disclosed confidential information with unauthorized third parties. Parties may, at their discretion, enter into a Non-Disclosure Agreement to ensure sensitive information and trade secrets are kept confidential.
The Recipient agrees to only publicly reveal confidential information to its employees who meet the following criteria: i) have a reasonable need to know the confidential information for the purposes of the contract particulars; ii) have been made aware of the classified information's confidentiality and the provisions of the settlement act; and iii) have been briefed of and consent to be bound by commitments that are equivalent to those within the contract particulars.
All Private Information, including all monopoly, copyright, proprietary information, registered trademark, and other intellectual property law therein, shall remain the sole domain of each Entity. The Parties acknowledge that no license or right to use any intellectual property is granted or implied by this Agreement to the Recipient.
Any transfers and duplicates of the classified material must be limited and under the user's supervision. At the plea of the other Party or, at the latest, upon termination of this Agreement, the Recipient shall return all documentation or versions of the Confidential Information. This is not applicable to confidential data or copies thereof that the Recipient is required by law to keep on file, provided that the Recipient is under an ongoing obligation to maintain the confidentiality of such private information or copies thereof.
Rights to intellectual property: The Respondent agrees that the ownership of any rights of intellectual property is unaffected by anything in this MOU and any respective NDAs.