The memorandum of understanding, which can also be abbreviated as MoU, is an agreement between the parties. It could be a memorandum of understanding between two parties or multiple parties. The memorandum of understanding draft presents the convergence of the will between the parties and demonstrates the expected common course of action. It is usually not used unless the parties do not indicate a legislative commitment or the parties are unable to establish a lawfully executed agreement. Memorandum of understanding sample agreement is an alternative to the gentleman's agreement, but more formal than it is.
You may think it is easy to write a memorandum of understanding, just refer to a memorandum of understanding template. But when you really start this, you will find that it is not an easy task to develop a memorandum of understanding that both parties are satisfied with. Here are some tips on how to write a memorandum of understanding that will satisfy both parties.
Before we start writing, we need to agree with that: the memorandum of understanding is the key final step in any negotiations.
The memorandum of understanding should capture the agreements reached by the participating parties on many different issues. These issues may include final prices, delivery methods and times, or other terms or specific products and services.
One of the tasks of the memorandum of understanding is to assist the team responsible for writing the final contract in order to understand what the two parties thought when the agreement was reached.
When developing a memorandum of understanding, try to use simple words. Always to keep it into mind that the key purpose of the memorandum of understanding is to create a document with the same legality as the verbal agreement.
If you are the person who is responsible to write a memorandum of understanding, you must control the content of the memorandum of understanding and the words used to describe it.
Whether the memorandum of understanding example constitutes a binding contract depends only on whether there is a clear legal element in the body of the document, which are the people called "four corners". The four elements of the requirements are: offer and acceptance, consideration and legally bound intentions (animus contrahendi). In the United States, the circumstances may a little bit vary, which however, mainly depends on what the contract is for. If the contract is for goods, it belongs to the Uniform Commercial Code, and if it is a service, it belongs to the common law of the state.