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Memorandum of Understanding (MOU) template
Memorandum of Understanding (MOU) sample

What is Memorandum of Understanding (MOU)?

Memorandum of Understanding (MOU) A preliminary agreement outlining mutual understanding between parties before formalizing a contract.

Sample template:


This Memorandum of Understanding (hereinafter referred to as the "MOU") is entered into as of [Date] (the "Effective Date") by and between Jane Doe (hereinafter referred to as "Party A") and John Johnson (hereinafter referred to as "Party B") (each, a "Party" and collectively, the "Parties").

1. Purpose

This MOU outlines the mutual intentions and understandings of the Parties with respect to their potential collaboration and serves as a basis for the negotiation of a formal contract. This MOU is not intended to be legally binding, and no legally enforceable obligations will arise between the Parties until a definitive formal contract is executed and delivered between them.

2. Nature of the Collaboration

The Parties intend to explore a collaborative relationship which may include, but is not limited to, the following activities: [Description of potential collaboration activities].

3. Term of the MOU

3.1. Duration

The term of this MOU shall commence on the Effective Date and remain in effect for a period of [Number] months, unless terminated earlier pursuant to Section 3.2 below (the "Term").

3.2. Termination

Either Party may terminate this MOU at any time, with or without cause, by providing written notice to the other Party. The MOU shall be terminated effective as of the date specified in such notice.

4. Negotiation of the Formal Contract

4.1. Good Faith Negotiations

The Parties agree to negotiate in good faith the terms of a definitive formal contract (the "Formal Contract") that shall set forth their respective rights, obligations, and responsibilities concerning the matters contemplated by this MOU. Such negotiation shall commence on a mutually agreed date during the Term and shall continue until the earlier of (i) the execution and delivery of the Formal Contract by the Parties or (ii) the termination of this MOU.

4.2. Regular Progress Updates

The Parties shall, from time to time during the negotiation of the Formal Contract, provide regular updates to each other on the progress of the negotiation and any matters that may materially affect such negotiation or the contemplated collaboration.

5. Confidentiality

5.1. Confidential Information

The Parties acknowledge that, in the course of their discussions and negotiations contemplated by this MOU, each may disclose or provide to the other certain non-public information concerning its business, operations, strategies, plans, or financial condition that is confidential and proprietary to the disclosing Party (the "Confidential Information").

5.2. Use and Disclosure of Confidential Information

Each Party shall hold in confidence and not use or disclose to any third party any Confidential Information of the other Party, except as may be required by law or with the prior written consent of the disclosing Party. Each Party shall take reasonable measures to prevent unauthorized use or disclosure of the other Party's Confidential Information by its employees, agents, and representatives.

6. No Binding Agreement; No Liability

This MOU is for the purposes of describing the Parties' mutual understandings and intentions and is not intended to create, and does not create, any legally binding obligations on either Party. Neither Party shall be liable to the other Party, whether in contract, tort, or otherwise, in connection with the negotiation, execution, or termination of this MOU or any discussions or communications relating thereto.

7. Governing Law and Dispute Resolution

7.1. Governing Law

This MOU shall be governed by and construed in accordance with the laws of the United States, without regard to its conflict of laws principles.

7.2. Dispute Resolution

Any dispute arising out of or in connection with this MOU, including its existence, validity, interpretation, performance, or termination, shall be resolved by good faith negotiations between the Parties. If the Parties are unable to resolve the dispute within thirty (30) days after the commencement of negotiations, then either Party may pursue any available legal or equitable remedy in any appropriate jurisdiction.

8. Miscellaneous

8.1. Notices

All notices, consents, and other communications hereunder shall be in writing and shall be deemed effective when delivered personally or by an internationally recognized courier service, addressed to the Party at the address set out below:

For Party A: Jane Doe

For Party B: John Johnson

or to such other address as a Party may designate by notice to the other Parties.

8.2. Entire Understanding

This MOU constitutes the entire understanding between the Parties concerning the subject matter hereof and supersedes all prior and contemporaneous negotiations, promises, and representations, whether oral or written, between the Parties relating thereto.

8.3. Amendment

This MOU may be amended or modified only by a written instrument duly executed by the Parties.

8.4. Execution in Counterparts

This MOU may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

IN WITNESS WHEREOF, the Parties have executed this MOU as of the Effective Date.

[Jane Doe]
Jane Doe (Party A)

[John Johnson]
John Johnson (Party B)

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Common Sections of a Memorandum of Understanding (MOU)

In this Memorandum of Understanding (MOU), you will see the following sections:

  1. Purpose
  2. Nature of the Collaboration
  3. Term of the MOU
  4. Negotiation of the Formal Contract
  5. Confidentiality
  6. No Binding Agreement; No Liability
  7. Governing Law and Dispute Resolution
  8. Miscellaneous

Analysis/Summary of each section

  1. Purpose : This section explains that the MOU is meant to outline the intentions and understandings of both parties regarding their potential collaboration. It also clarifies that the MOU is not legally binding and that a formal contract will be needed for any legally enforceable obligations.

  2. Nature of the Collaboration : This section describes the potential activities that the parties may engage in as part of their collaboration. It leaves room for flexibility by stating that the activities may include, but are not limited to, the listed examples.

  3. Term of the MOU : This section specifies the duration of the MOU, which starts on the Effective Date and lasts for a certain number of months. It also explains how either party can terminate the MOU by providing written notice to the other party.

  4. Negotiation of the Formal Contract : This section states that the parties will negotiate in good faith to create a formal contract that outlines their rights, obligations, and responsibilities. It also requires the parties to provide regular updates on the progress of the negotiations.

  5. Confidentiality : This section addresses the handling of confidential information that may be shared between the parties during their discussions and negotiations. It requires each party to keep the other's confidential information private and to take reasonable measures to prevent unauthorized use or disclosure.

  6. No Binding Agreement; No Liability : This section reiterates that the MOU is not legally binding and that neither party is liable to the other in connection with the MOU or any related discussions or communications.

  7. Governing Law and Dispute Resolution : This section establishes that the MOU is governed by the laws of the United States and sets out a process for resolving any disputes that may arise between the parties. The process involves good faith negotiations, followed by legal or equitable remedies if the dispute cannot be resolved through negotiation.

  8. Miscellaneous : This section covers various additional topics, such as how notices should be delivered, the MOU being the entire understanding between the parties, how the MOU can be amended, and the possibility of executing the MOU in counterparts.

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