A Memorandum of Understanding (MOU) is a written statement detailing the preliminary understanding of parties who plan to enter into a contract or some other agreement. In other words, an MOU is a document that describes the formal agreement between parties wishing to enter into an agreement. It should be noted an MOU may be non – binding and is sometimes referred to as a Letter of Intent.

An MOU should contain the following clauses;

A letter agreement can be as long or as short as necessary to cover the points you wish to include, but you should describe the terms as completely and clearly as possible. Using the example above, a letter agreement might include:

  1. The name and address of parties
  2. The date of the agreement
  3. A description of the parties
  4. A description of the reason behind the agreement
  5. Obligations of the parties
  6. Miscellaneous provisions, such as choice of law, jurisdiction, notices, assignment, amendments, and counterparts.
  7. Your signatures and the date.

If you have more questions about how to draft an MOU, it is suggested that you speak to a lawyer, and if you will like to draft an MOU by yourself, you may use our MOU Template.