Memorandum of Understanding

A Memorandum of Understanding or MoU is the first stage in the creation of a formal agreement or
contract. This document sets out the points of agreement – the intended common lines of action – of
the parties involved for the purposes of the agreement. Though MoU is not legally binding, it signals the
willingness of the parties to move forward with a contract. Often, it is seen in international treaty
negotiations and may also be used in high-stakes business dealings such as merger talks.

Contents of Memorandum of Understanding

1. Date of agreement: located at the top of the contract, the date of agreement indicates the
month, day, and year in which the agreement is made and takes effect.
2. Introduction: the introduction should provide an overview of the agreement; identify the
purpose of the document, parties involved, and why the involved parties are entering into the
agreement. The introduction should also offer details about each party involved.
3. Purpose of MOU: this is reason the MOU is being created. It should detail how the parties
involved will use the increased capacity provided by the MOU. To get a better understanding,
run an Internet search for a sample MOU. Read the example sentences so that you may draft
your own purpose statement.
4. Scope: lists agencies and jurisdictions included in the agreement and their relationship to the
parties involved. This includes end users, the level of command/government, etc. For example,
are there government agencies that will use the resources included in the MOU?
5. Terms of collaboration: this section should detail which activities the project will involve. The
activities typically fall within two categories:
a. Cooperation: the activities performed and which partners will perform them.
b. Resources: the funds and other resources that each partner brings to the agreement.
6. Disclaimer: a general statement indicating that all activities that take place under the MOU
must be in compliance with both state and federal law.
7. Conditions of alteration or termination: this section clarifies the conditions and terms under
which the MOU can be terminated, altered, or amended.
8. Signatures: each party then signs the MOU. If one or more of the parties involved are
companies, the CEO, departmental chair, director, or other involved executive of the companies
must sign on behalf of the corporation.

Writing Memorandum of Understanding

1. Planning phase: each party involved determines their wants and what they're willing to
negotiate on.
2. Drafting phase: parties then draft the initial MOU.
3. Negotiating phase: the MOU typically outlines guidelines that govern the mediation process.
4. Timeline negotiation: Once negotiations are completed, parties establish a timeline for the
MOU to take effect, when it expires, and any rules regarding termination.
5. Restrictions: finally, each party adds any restrictions, disclaimers, privacy statements, etc., and
sign the final MOU.