In this article, you will learn about the Memorandum of Understanding and the steps involved while preparing it.
MOU documents are a formal agreement between two or more parties to the agreement. It is not a legal agreement but might result in establishing a business relationship between the parties, which might turn out to be a legally enforceable contract. Once there is a mutual agreement between the parties, all the essential instances shall be documented for each and every party. Although it is not legally binding, since it is a formal document, it expresses the parties’ willingness in writing to move the contract forward. In international relations, where two countries may sign an MOU, the countries deal with significant problems and come up with a solution after the planning stage. MOUs can be a useful formal document in major projects and this can be used in different organizations. These are the preliminary agreements used in negotiations between the parties. In this article, we will discuss what MOUs are, its various types and the Steps Involved in Write a memorandum of understanding.
Steps in Write a Memorandum of Understanding
Below mentioned are the Steps Involved in Preparing an MOU:
- Topic and title:- Try to select a proper title for your Memorandum of Understanding. The title must reflect the type of MOU you are using. Some of the MOU’s discussed below are the asset purchase MOU’s, venture agreement MOU’s, service agreement MOU’s and so on.
- The parties involved:- You should mention the fundamental details of the parties involved at the very beginning such as their name, address and so on.
- Agreement initiation:- While writing an MOU agreement you should mention the tentative date on which the work will begin.
- Termination details:- At the same time, you should also mention the terms under which the MOU can be terminated. One must also mention the termination date that is the date on which it is to be terminated since it is a one- time contract with a fixed deadline.
- Goals and responsibilities involved:- In an MOU, it must include the responsibilities, duties, deadlines associated and a valid description of the project should be mentioned.
- Scope and values:- After determining the scope and project goal and its importance, it must be ensured that all the parties to an MOU must understand the projects long term use and its partnerships.
- The key stakeholders:- All the key stakeholders, collaboration and partnership should be mentioned in the project.
- Timeline:- For every deliverables, there needs to have a specific deadline for projects. It should be clearly mentioned in the MOU so that the parties to the contract are aware and able to comprehend.
- Terms and conditions:- All the terms and conditions you wish to add your MOU as per the special requirement must be added to complete the project. Thus, you should mention it in a separate statement of work.
- Signatures:- Each and every MOU should be signed by all the individuals who are parties to it so that a common understanding between them is achieved.
When Should You Use an MOU?
An MOU or memorandum of understanding is used when the parties mutually agree on a specific issue/matter and want to put that agreement into writing, thus creating a relationship that its not legally binding to it.
Conclusion
MOUs non binding nature can be a benefit to the parties concerned. Due to its non binding nature it cannot be legally enforced and the parties can exit it anytime. The parties have the choice of not entertaining the MOUs requirements hence won’t be facing severe consequences. Vakilsearch can help you create MoUs most swiftly. Our experts are knowledgeable enough to keep aside the hassles related to the Steps Involved in Write a Memorandum of Understanding. However, this blog Steps Involved in Preparing an MOU may come in handy when you would like to create an MoU in the future.
