Memorandum of Agreement is a formal business document. It outlines an agreement between two parties, either groups or individuals. In most cases, it precedes a more detailed contract between parties. The main purpose of this type of the agreement is to have a written understanding of the agreement. In most cases, this agreement is rather simple and after it, a detailed contract follows, based on the data from a Memorandum of Agreement. Still, a Memorandum of Agreement can also be a good final solution in some cases. In any case, it has to be done in a professional way.
Memorandum of Agreement is a legal obligatory contract and, because of that, needs to have some elements. It is more formal than a verbal contract but also less formal than a contract. We can say it is a step between a verbal agreement and a final contract.
Step1
Like any contract, it needs data about the parties.
Step2
The purpose of the agreement tells why the agreements are written in first place. It has to include detailed description of roles and responsibilities of all parties, duration of the agreement and payment schedule if necessary.
Step3
It should also include information about the way of solving potential disputes.
Step4
In order to make this document valid, it has to have signatures of both parties and their representatives.
Many people think that Memorandum of Agreement is not an important document, since it is just a preparation for a real document. This is very wrong and dangerous way of thinking because once you sign it, it becomes obligatory, so it should be written well like any legal document. When you write it, it should include all the parts like any other document.
Step1
Start a template by writing down the date and place on the top of the document.
Step2
Write down the information about all the parties that are included into the creation of the Memorandum. It should include name, address and other important information about parties.
Step3
State the purpose of the memorandum. In most cases, Memorandum of Agreement is a preparation for a more detailed contract. Still, it should include all the agreed information, such as a brief description of the work that has to be done, financial obligation of both parties, duration of the agreement and key contacts for both parties.
Step4
If this contract will be followed by a more detailed one, say so to assure that all the important data from this Memorandum of Agreement are included in a following contract.
Step5
Make sure to include a section about possible disputes and how to solve them. Also write about the possible termination of the agreement and under what circumstances it can happened.
Step6
At the bottom, place lines for a date and signs. Leave enough space for everybody to sign.
1
Memorandum of Agreement is more obligatory than a verbal agreement, but to create it, you will have to talk with the other party a lot. Make sure to agree about all the elements of the document. This is especially important if this document is used as a solution of some dispute, which it is in some cases. A help from a professional may be a good idea, in that case, as well as if someone has some doubts.
2
Templates from the internet may be a good help, but make sure to adjust them to your needs. Take few templates and study them before you create the one you need. All the specific data you need to incorporate into the template use carefully and check twice. Once you sign the document, it becomes obligatory.
3
An agreement between two parties is always liable to potential problems and disputes. Try to avoid them by creating detailed documents with all the necessary data. Of course, you can't predict all outcomes, but the more you do, fewer problems will be in the future.
4
Be fair. The best contract is the one that is fair to both parties. Besides, any unfair contract can be a subject of a dispute and can cost you a lot of troubles in the future.
Ask the Community
Still get confused or have more suggestions? Leave your thoughts to Community Center and we will reply within 24 hours.