Free Memorandum of Understanding (MOU) Templates [Word]

memorandum of understanding template sale of business

A memorandum of understanding template mostly referred to as MOU or MOU is a format of a formal agreement between two or more parties with stated terms and conditions. So, the companies and institutions use MOUS to establish a type of partnership for certain functions.

Although, a memorandum of the understanding template cannot be legally used to file a lawsuit against the violator. However, it shows the degree of seriousness of the party on a certain under-consideration matter. It’s a type of stronger gentlemen’s agreement that has a mutual respect factor.

Mostly, the MoUs are the first steps toward the legal binding between the parties. It’s not a legal document but it plains the way of legal contract or agreement between two parties based on MoU success experience.


In many countries, a letter of intent is considered a memorandum of understanding. However, it has a bit different application as well. Further, it is considered synonymous with the MoU. The LOI is also a non-binding formal document that implicit a binding contact is to follow.

The MoUs are very common in international treaty negotiations. However, it can be used in firm business dealings such as business merger negotiations.


What is a memorandum of understanding?

A memorandum of understanding (MoU) is a formal document that acts as proof of an agreement between two or more parties. It’s not a legitimate binding. However, it shows the willingness of the parties to move forward with an agreement.

Memorandum of understanding is usually used in international relations. Companies or organizations used it to create official partnerships. It is commonly accepted the expectations of all the parties that are involved in a discussion. Moreover, sometimes it is also known as a ‘letter of intent’.


What is a memorandum of agreement?

A Memorandum of Agreement (MoA) is a document that explains the collaborative relationship between two parties wants to work together on a project. It acts as a legal document and explains the terms and thorough information of the partnership agreement. We can say that it is more formal than a verbal agreement. However, it is less formal than a contract.

Companies and organizations used it to develop and outline the cooperative agreement that contains service partnerships or agreements to give technical assistance and training.


What are the types of MOU templates?

An MOU contains all the relevant conditions or terms upon which all parties are agreed. The MOU should sign by all involved parties to make it an official document. You can make different types of MOU templates which are;

  • Between a university and a company
  • Between an individual and a group
  • Between two individuals
  • For the purpose of business between two parties
  • For businesses
  • For companies
  • For employees
  • For the Army

Contents of a Memorandum of Understanding Template

The memorandum of understanding Template is very useful to create an MoU for business or institution formal non-binding agreements. So, it clearly describes the points of consideration of the agreement.

Also, the names of the parties and the description of a project on which the parties have shared understanding are the main elements of a memorandum of understanding.


MoU template is an MS Word-based template that companies can use to just fill in the relevant information. Moreover, the scope, objective, deliberations of the project are also described in the MoU.

Additionally, it is important to clearly describe the role and responsibility of each party involved in the agreement of understanding. Although, it is not a legal document. However, the finalization of MoU takes a lot of time and effort. So, both parties expect the respect of MoU and the degree of seriousness towards committed roles and responsibilities.

Free Memorandum of Understanding Samples & Examples

Also, the procedure to create a memorandum of understanding is a bit complex and time-consuming. So, the key to success is to understand the learns what is most important for the other party before signing MoU.

Both parties their draft of best suiting MoU. So, it’s later discussed between the authorities to decide what points are non-negotiable and what points can be negotiated.


Moreover, the memorandum of understanding isn’t always beneficial for the parties. As it’s not any legal document and both parties always have the chance to violate the term of MoU for their benefit.

Thus, many companies don’t like to spend time and efforts on negotiating the creation of a memorandum of understanding. So, such companies prefer to work on and spend resources on the establishment of another agreement named as a trade agreement.

How do I write a memorandum of understanding?

Memorandum of understanding has a unique writing process. Let us discuss how to write it;

  1. The first step is the planning phase. It includes each party to identify their wants and what they are willing to discuss on.
  2. The second step is the drafting phase. After the planning phase, parties draft the initial memorandum of understanding.
  3. The third step is the negotiating phase. The Memorandum of understanding generally outlines guidelines that control the mediation process.
  4. The fourth step is the timeline negotiation. When you have completed all the negotiations set the timeline for MoU. It includes the expiry date and rules regarding termination.
  5. The last step is the restrictions. In the end, each party adds any restrictions or privacy statements that they want. Then, both parties sign the document.

Some tips to write a memorandum of understanding:

Consider the following tips for writing a memorandum of understanding;

Ways to approach the overall writing of an MOU

Determining whether the MOU has answered the basic questions relevant to who, what, when, where, and how the agreement will play out is a good approach to the structure of an MOU. This makes sure that potential hurdles are addressed and answered. Sandwiching each agreement between the words is another method of structure that could be helpful.

Keep it simple

In order to make sure that the terms of the agreements are realistic and actually within the scope of the authority of the signing parties, you should write the MOU in simple terms. Your wording should be concise and succinct. Write it using positive language to help with clarity.


Coordination and review

It is important to ensure that all parties sign the agreement. Choose a point person in charge of creating the MOU when multiple parties are involved. Send the draft out to parties alongside a sign-off sheet by considering submitting a draft agreement for coordination and review.

Why should you write a memorandum of understanding?

You should write a memorandum of understanding due to following reasons;


Proof of intent

An MOU is beneficial in various situations which involve business negotiations or purchase and sale agreements.


Good faith intention

Either party may simply walk away when negotiating terms without a valid MOU. An MOU is signed by the parties to indicate to each other a good faith intention to work out a deal. It allows the parties to move the deal forward in incremental steps.

Setting expectations

Setting the expectations of all parties involved by writing an MOU proves very beneficial. The process usually starts when each party creates its own initial MOU. They may include ideal terms, points that might be non-negotiable and preferred outcomes. After that, they draft a mutually accepted MOU agreement.

When to use a memorandum of understanding?

Finding the right party to share an agreement with is the first thing you have to do. With the help of an MOU, you can get your agreement off the ground before making a formal contract. This document enables you to indicate your terms and conditions in writing. Furthermore, you can use this template if you own a business and you want to;

  • Partner with another business
  • Partner with different businesses
  • Other businesses asked you to partner with you

You have to put in a lot of time and effort while making the document. When agreeing with another party, you also need the same components. This document can represent your agreement without a legal contract. Then, before making it official, you can finalize the terms of the contract. You should use the MOU template if this is your first time entering into an agreement. The template helps you to draft the basic framework of your agreement or project and specify the involved parties and their responsibilities.

Include more information in your MOU so that it will turn out to be better. It would be better to include relevant issues such as the general scope of the agreement, time frame, liabilities, and more. In addition, bear in mind that your document will be less valuable if it is more ambiguous.


What are the features of the memorandum of understanding?

Features of a memorandum of understanding are given below;

  1. The first step is to identify the parties. It indicates the name of the parties between whom the memorandum has been signed.
  2. The second feature is the purpose of the memorandum.
  3. The memorandum contains the duration of the agreement i.e. the beginning and ending date of the agreement. It also describes the conditions in which the memorandum will be terminated.
  4. The next feature is meeting and reporting. For example, parties decide that they must meet at least once in a quarter.
  5. The other feature is the financial consideration. It specifies the amount that both parties contribute.
  6. The management is another feature of this agreement. It includes the role, responsibilities, and remuneration.
  7. When you have all done with the agreement, signed and dated it by each party.

Is an MOU legally binding document?

An MOU just allows the willingness of the parties to move forward with an agreement on the basis of the initial MOU so it isn’t legally binding. Although a lot of time and effort is involved in negotiating, discussing, and writing an effective MOU. The parties have to figure out what is most important to each other to formulate an MOU.

Faqs (Frequently Asked Questions)

How can you differentiate between MOU and MOA?

A Memorandum of Understanding (MOU) is basically a written document that isn’t legally binding. While a Memorandum of Agreement (MOA) specifies the conditions for cooperative work on a specific activity or project. It can be legally binding in specific cases.

Who has to sign an MOU agreement?

After reading and agreeing upon all the terms and conditions, all involved parties have to sign an MOU agreement.

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