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Memorandum of Understanding


The First Party and the Second Party is referred to individually as “Party” and collectively as the “Parties.”

This Memorandum of Understanding (the “Agreement”) is entered into and made valid upon signature by both Parties. (the “Effective Date”)


  1. The Parties are interested in working together in connection with the Purpose which is described in this Agreement;
  2. This Agreement sets out the initial relationship between the Parties as well as the respective rights and responsibilities of each Party;
  3. This Agreement is intended to be [Insert whether legally binding or non-binding];
  4. Each Party respectively is expected to act in good faith in accordance with this Agreement

NOW THEREFORE IN CONSIDERATION OF, the premises and mutual covenants set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows:  

1. Project and Scope: 

  1. The Parties intend to investigate the prospect of working together and/or to actually work together, on a project which will be referred to as [Insert a name for the Project that this Memorandum of Understanding relates to] (“the Project”).
  2. The Project has the following purpose (“the Purpose”) [Insert a description of the Project].

2. Objectives:

The Parties agree as follows: 

  1. The Parties shall work together in a cooperative and coordinated effort so as to bring about the achievement and fulfillment of the Purpose of the Agreement.
  2. It is not the intent of this Agreement to restrict the Parties to this Agreement from their involvement or participation with any other public or private individuals, agencies or organizations.
  3. The Parties shall mutually contribute and take part in any and all phases of the planning and development to the fullest extent possible.
  4. This Agreement is not intended to create any rights, benefits and/or trust responsibilities by or between the Parties.
  5. The Agreement shall in no way obligate either Party to supply funds.

3. Term:

This Agreement shall commence upon the Effective Date, as stated above, and will continue until [Insert Termination date].

4. General Obligations: 

  1. Notwithstanding anything, the Parties will act in good faith and will use their best endeavours to achieve the Purpose and to give effect to the terms of this Agreement.
  2. The Parties hereby acknowledge and agree that they will each respectively perform all acts and execute all documents reasonably required in order to give effect to the terms of this Agreement.
  3. Each Party agrees to cooperate in the spirit of mutual understanding and goodwill in order to develop Parties’ relationship with one another and in order to pursue the Purpose.

5. Role of Parties: 

  1. The First Party will have the following obligations in relation to this Project: [Insert a description of the obligations that the first party will have in relation to the Project] 
  2. The Second Party will have the following obligations in relation to this Project: [Insert a description of the obligations that the second party will have in relation to the Project] 

6. Intellectual Property: 

  1. In connection with each Party’s participation in the Project, each Party may respectively generate, create, contribute to, write or produce intellectual property (“Project Intellectual Property”).
  2. Unless otherwise expressly agreed between the Parties, nothing in this Agreement is intended to create any transfer or assignment of any intellectual property rights in relation to any Project Intellectual Property.
  3. Unless otherwise expressly agreed between the Parties, in the event that a particular Party generates, creates, contributes to, writes or produce an item of Project Intellectual Property, that Party shall retain any and all intellectual property rights in relation to that item of Project Intellectual Property.
  4. Each Party’s respective obligations under this clause will survive the termination or expiration of this Agreement and will continue after that Party ceases to participate in the Project.

7. Representations and Warranties:

Both the Parties represent that they are fully authorized to enter into this Agreement. The performance and obligations of either Party will not violate or infringe upon the rights of any third-party or violate any other agreement between the Parties, individually, and any other person, organization, or business or any law or governmental regulation.

8. Indemnity: 

The Parties each agree to indemnify and hold harmless the other Party, its respective affiliates, officers, agents, employees, and permitted successors and assigns against any and all claims, losses, damages, liabilities, penalties, punitive damages, expenses, reasonable legal fees and costs of any kind or amount whatsoever, which result from the negligence of or breach of this Agreement by the indemnifying Party, its respective successors and assigns that occurs in connection with this Agreement. 

9. Limitation of Liability:

Under no circumstances shall either Party be liable to the other Party or any third-party for any damages resulting from any part of this Agreement such as, but not limited to, loss of revenue or anticipated profit or lost business, costs of delay or failure of delivery, which are not related to or the direct result of the Party’s negligence or breach.

10. Costs:

Unless otherwise expressly provided in writing, each Party is responsible for its own costs of complying with this Agreement and in connection with the performance of its obligations under this Agreement.

11. Force Majeure: 

  1. If and to the extent that the Party’s performance of any of its obligations under this Agreement, hindered or delayed by fire, flood, earthquake, elements of nature or acts of god, acts of war, terrorism, riots etc. or any other similar cause which is beyond the reasonable control of the Party and such non-performance or delay could not have been prevented by any reasonable means then the delayed Party will be excused for such non-performance or delay. The Party whose performance is prevented or delayed by Force Majeure event will immediately notify the other Party/Parties of the occurrence of such Force Majeure event and describe in reasonable detail the same.
  2. If the Force Majeure event continues for a continuous period of 30 days, the Parties’ will mutually agree on the future course of action, however despite all efforts made by the Parties’ if that Force Majeure event continues for a period of 90 days, either of the Parties, will have the right to terminate this Agreement by giving the other Party/Parties a notice of termination in writing.

12. Severability:

In the event any provision of this Agreement is deemed invalid or unenforceable, in whole or in part, that part shall be severed from the remainder of the Agreement and all other provisions should continue in full force and effect as valid and enforceable.

13. Waiver:

The failure by either Party to exercise any right, power or privilege under the terms of this Agreement will not be construed as a waiver of any subsequent or further exercise of that right, power or privilege or the exercise of any other right, power or privilege.

14. Entire Agreement:

The Parties acknowledge and agree that this Agreement represents the entire Agreement between the Parties. In the event that the Parties desire to change, add, or otherwise modify any terms, they shall do so in writing to be signed by both Parties.

15. No Other Rights Guaranteed:

Nothing in this Agreement intend to grant any rights under patent, copyright or other intellectual property rights of any of the Party in favor of the other, not shall this Agreement be construed to grant any of the Party any rights in or to the other Party’s confidential information except the limited use of such confidential information in connection with the Project under this Agreement.

16. Dispute Resolution: 

  1. Any dispute(s) arising out of this Agreement shall, as far as possible be settled amicably between the Parties’
  2. The Courts in [Insert name of state] shall have exclusive jurisdiction over dispute(s), differences and claims arising out of this Agreement.
  3. If either Party employs attorneys to enforce any rights arising out of or relating to this Agreement, the prevailing Party shall be entitled to recover reasonable costs and attorneys’ fees.

17. Governing Law and Jurisdiction:

The Parties agree that this Agreement shall be governed by the State and/or Country in which both Parties do business. In the event that the Parties do business in different States and/or Countries, this Agreement shall be governed by [Insert name of state] law.

18. Termination:

This Agreement may be terminated at any time by either Party upon [Insert number of days] day(s) written notice to the other Party.

Template does not constitute any form of legal advice, and the User is at all times encouraged to request external specific legal advice in respect of the execution of legal documents.
Memorandum of Understanding

A MOU is a short written statement outlining an agreement between two or more parties. Create, send, and store yours here at Contractbook.

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What is a Memorandum of Understanding (MOU)?

A Memorandum of Understanding is a short written statement outlining the agreement between two or more Parties that agree to do or not do certain things in the future.

Generally speaking, a Memorandum of Understanding is not legally binding. It only outlines the intention of making a legal agreement, but it is not a legally enforceable document. While it is not enforceable, it is a powerful tool for helping you outline what the final legal agreement will include. Money must be exchanged for a Memorandum of Understanding to stand up in court if challenged.

Further, even in the case of a non-binding Memorandum of Understanding, the Parties may choose to have the obligations on confidentiality as binding since they may be sharing sensitive and confidential information with the other Parties to enable them to carry out further investigations or due diligence before finalizing all the details of the Project. 

If the Memorandum of Understanding is non-binding, the Parties may sign a separate confidentiality agreement.

This Memorandum of Understanding may be used early in the negotiations between the Parties. In some cases, the  Parties may also use this as the final agreement; however, in some instances, a more detailed, specific contract may be more suitable.‍

Details of each Party and the Project they are interested in pursuing are recorded. If the Parties have specific responsibilities about the Project, then the details of those responsibilities can also be included.

What does a MOU include

Each memorandum of understanding (MOU) can vary, but viewing them as agreements to agree rather than final contracts is essential. Include terms that establish mutual agreement on the course of action. Typically, an MOU covers:

  • Purpose of the partnership
  • Goals of each party
  • Duties of each party
  • Timeline
  • Confidentiality clause
  • Process for resolving disputes

An example of a Memorandum of Understanding (MOU) between a nonprofit and a corporate sponsor

This example demonstrates how an MOU outlines the terms of a partnership between a nonprofit organization and a corporate sponsor, clarifying their respective roles, responsibilities, and objectives.

  • Purpose of the Partnership: The nonprofit organization seeks financial support from the corporate sponsor to fund its community outreach programs, which promote literacy among underprivileged children.
  • Goals of Each Party: The nonprofit organization aims to expand its literacy programs to reach 1,000 additional children within the following year. The corporate sponsor seeks to fulfill its corporate social responsibility goals by supporting initiatives that promote education and literacy.
  • Duties of Each Party: The nonprofit organization will use the funds provided by the corporate sponsor exclusively for its literacy programs. It will provide the sponsor with regular progress reports and updates regarding the program's impact. The corporate sponsor will provide financial support as outlined in the agreement and may also offer in-kind support, such as volunteering or providing resources for program activities.
  • Timeline: The MOU will be effective for one year from the date of signing, with the option for renewal upon mutual agreement of both parties.
  • Confidentiality Clause: Both parties agree to maintain the confidentiality of any proprietary information shared during the partnership.
  • Process for Resolving Disputes: If any disputes arise from this agreement, both parties agree to first attempt to resolve the matter amicably through negotiation. If a resolution cannot be reached, the parties may seek mediation or arbitration as the next step.

Make your own Memorandum of Understanding

Our free Memorandum of Understanding template makes crafting your own MOU a breeze. Our user-friendly platform allows you to edit and create customized templates tailored to your needs. 

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Key Terms of
Memorandum of Understanding

This Memorandum of Understanding (MOU) outlines the initial relationship between two parties interested in working together on a project. It establishes the purpose, objectives, term, obligations of each party, intellectual property rights, representations and warranties, indemnification, limitation of liability, force majeure, dispute resolution, governing law, and termination procedures. The MOU is intended to be [legally binding or non-binding, to be specified]. It aims to facilitate cooperation between the parties while protecting their respective interests.

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