Memorandum of Understanding Template

When to Use a Memorandum of Understanding?

A Memorandum of Understanding is used when parties do not undertake a legal obligation or when parties are unable to enter into a legally binding agreement for some reason. Some organizations use it to establish relations between company divisions, agencies, or related organizations.

How to Write a Memorandum of Understanding?

A Memorandum of Understanding Form must be filled in as follows:

1. The filer should enter the legal names of the parties and indicate that this document constitutes an agreement between them.

2. Enter the objective of this agreement and specify activities which each of the parties agrees to implement to achieve the stated aims.

3. Indicate the general terms of the agreement:

   • The filer should enter general provisions depending on the objective of the memorandum. For example, if the form will describe the working relations between a manufacturer and a distributor, indicate the prices at which the manufacturer will sell products to the distributor, a minimum sales volume for the period of validity of this agreement, and the conditions of customer support the distributor is obliged to provide. State that the manufacturer intends to produce goods without any changes or modifications and what the prices will not be subject to change for any reason within the duration of the memorandum. Indicate at which region the distributor would sell these goods and that the manufacturer grants at the distributor exclusive distribution rights in the specified area;
   • Provide the duration of the memorandum. For example, indicate that it is valid after signing and will have initial durability of one year;
   • The filer should specify information about coordination. Indicate that each party has to appoint an appropriate person to represent its company and to coordinate the implementation of activities. State the order and frequency of meetings of these individuals for discussing progress and planning activities;
   • Specify technical and financial support activities for this agreement. They may be represented as a specially developed attachment;
   • The filer has to provide confidentiality statements. Indicate that each party agrees not to disclose any information concerning this agreement;
   • Enter termination conditions. Specify that the agreement may be terminated with a written notice from either side. Indicate how many days before the intended termination must either side submit such a notification;
   • State the rules of extension of this agreement. For example, state that the memorandum will automatically renew for an additional one year;
   • Indicate communications methods. For example, state that all notifications or demands should be sent to the address or email of the other party.

4. The filer should enter other provisions of the agreement. For example, you may need to include the following statements:

   • Indicate which party and when they may retain their right to withhold cost-share payments for failure to comply with terms and conditions of the memorandum;
   • Provide information about allowing or prohibiting the use of party names in any advertising materials;
   • Specify the details of staff and fees associated with the implementation of this agreement.

5. The parties should sign the Memorandum of Understanding template and enter the date of completion.

Related Forms and Topics:

• Assignment Agreement;
• Cooperation Agreement;
• Novation Agreement.