How To Write a Memorandum of Understanding:
9 Steps to Follow

Clients Rate Lawyers on our Platform 4.9/5 Stars
based on 4,036 reviews

Jump to Section

Need help with a legal contract?

Post Project Now

What Is a Written Memorandum of Understanding?

A memorandum of understanding, or MoU, is a non-binding document to show commitment and understanding of responsibilities for an agreement made between two parties. MoUs are essentially used when two parties want to write down their general understanding of a potential transaction they want to engage in.

MoUs are typically made by governmental organizations, non-governmental organizations and corporate entities when partnering with other organizations to document terms and conditions, transactions and negotiations.

Different Types of MOUs

There are different types of MoUs used for different types of contracts or services. Here are some major types of MoUs used by businesses:

Joint Venture MoU

An MoU for a joint venture agreement is used in the early stages of negotiation between two or more parties. It is also called a co-venture agreement. A joint venture agreement is a temporary business contract between two or more parties to help work towards a common goal. The agreement defines all responsibilities of the parties involved.

There are two main types of joint ventures – contractual and general joint ventures.

  • Contractual joint ventures take place when two entities partner or collaborate on a project but don't form a separate legal entity to do so. Instead, each entity maintains and keeps their own records of profits and losses.
  • General joint ventures are defined as two entities sharing their profits and losses from a specific project. Each party in the agreement has unlimited liability when it comes to the obligations of the agreement. This is often used for real estate endeavors rather than for business ventures.

Service Agreement MoU

A service contract is a legally binding agreement between a service provider and a client which outlines the terms and conditions of the services that will be provided. For example, construction contractors use a service agreement to detail the renovations that they are making to a client's home and to outline how they will be paid for it. Similarly, a business can use a service contract to hire a temporary freelancer or contractor.

A service agreement MoU would detail the services that will be provided to a business in a non-binding document. They are typically used during preliminary negotiations.

Outsourcing MoU

An outsourcing agreement is a contract formed between two or more parties, generally a company and a service provider. The service provider promises to deliver specified services, which is outsourced by the company. All outsourcing MoUs contain the following elements:

  • Service expectations
  • Any potential penalties and/or awards
  • Expected timeframe
  • Reviews
  • Potential exit strategies
Meet some lawyers on our platform

Ryenne S.

133 projects on CC
View Profile

Michael K.

70 projects on CC
View Profile

Don G.

27 projects on CC
View Profile

Michael M.

180 projects on CC
View Profile

Asset Purchase MoU

An asset purchase agreement is an agreement between a buyer and a seller used to transfer ownership of an asset for a set price. The seller decides which specific assets to sell and exclude in an asset purchase agreement. These are the key elements addressed in an asset purchase MoU:

  • Who is the Asset Purchase Agreement For?
  • What Assets Are Being Purchased?
  • How much is the asset for?
  • Representation and Warranty
  • What Needs to Happen Before Closing?
  • Miscellaneous Or “Boilerplate” Language

Share Purchase MoU

A share purchase agreement is used during the purchase of shares which is essentially the purchase of a company’s operating business. The buyer of shares of a company generally will want some contractual promises about the company, known as warranties, which will continue to bind the shareholder, who is selling the shares, after the sale. A share purchase MoU discuss the following key elements:

  • Warranties
  • Share selling terms
  • Restrictive covenants

Business Relationship MoU

A business relationship MoU outlines what each organization agrees to contribute to a partnership, a timeframe for deliverables, details of collaboration, terms and conditions, payments and compensation, etc.

Here are some examples of MoU and when they are used.

How to Write a Memorandum of Understanding – Step by Step

You can write a memorandum of understanding by following the steps listed below:

  • Topic and title: Pick a title for your MoU. This should reflect the type of MoU being used. As described above, some common types of MoUs are, venture agreement MoU, service agreement MoU, and asset purchase MoU.
  • Parties involved : The beginning of your MoU should include the basic details such as names and addresses of the parties involved.
  • Agreement initiation and termination details : Your MoU should mention the effective date of the MoU, when work will begin, and the terms under which it can be terminated. If it is a one-time contract with a fixed deadline, you should also mention the date of termination.
  • Goals and responsibilities : The MoU should include a detailed description of the project, the duties, milestones and deadlines associated with it, etc.
  • Scope and Values : Outlining the scope or goal of the project along with the values of the institutions can help ensure all parties have an understanding of the long-term use of the project and their partnership.
  • Key stakeholders : The key stakeholders in the project, collaboration or partnership should also be mentioned in the MoU.
  • Timeline : The MoU outlines the terms of a partnership or collaboration. Sometimes the project also might have deadlines for deliverables. These deadlines should be mentioned in the MoU to reflect that all parties are aware and understand their timelines.
  • Terms and provisions : Your MoU can also include special requirements, terms and conditions . If your project, partnership or collaboration has any special requirements or you wish to add terms of completing the project, it should be mentioned in the statement of work.
  • Signatures : MoUs need to be signed and dated by all parties involved to reflect an understanding between all parties.

What’s Included in a Memorandum of Understanding Between Two Parties?

These are the key elements present in any MoU:

  • Points of understanding: An MOU clearly outlines specific points of understanding. It contains the names of the parties, the project on which they are agreeing, scope and responsibilities, etc.
  • Terms and Conditions : An MOU also contains the terms and conditions of the agreement. All parties need to be in agreement of the terms and conditions.
  • Party details: The MoU contains the details about all parties involved in the agreement. This generally contains the names, addresses and other contact information.
  • Purpose : An MoU clearly describes the purpose of the agreement. It also sets the duties and responsibilities, timeline and important dates for the project being discussed.
  • Signatures : All MoUs should have signatures of all parties to reflect an agreement between all parties.

Here is a sample MoU for you.

Who Writes MOUs?

MoUs are generally written by organizations or companies offering the collaboration or partnership. Since companies tend to have their own legal counsel, they can draft an MoU fairly easily. It is advisable to seek a business lawyer or a contracts lawyer who understands federal, state and local laws to draft an MoU. However, you can also draft your own MoU using templates available online.

Get Help with a Memorandum of Understanding

Do you need help writing an MoU? Post a project in ContractsCounsel’s marketplace to get free bids from lawyers that specialize in MoU drafting. All lawyers are vetted by our team and are peer reviewed for you to review before hiring.

How ContractsCounsel Works
Hiring a lawyer on ContractsCounsel is easy, transparent and affordable.
1. Post a Free Project
Complete our 4-step process to provide info on what you need done.
2. Get Bids to Review
Receive flat-fee bids from lawyers in our marketplace to compare.
3. Start Your Project
Securely pay to start working with the lawyer you select.

Meet some of our Lawyers

Orin K. on ContractsCounsel
View Orin
5.0 (3)
Member Since:
October 23, 2021

Orin K.

Free Consultation
Get Free Proposal
New York
19 Yrs Experience
Licensed in NY
New York Law School

I'm an employment lawyer. I counsel and represent employees in all professions, from hourly workers to doctors and executives, and all in between. I also counsel and represent employers in many aspects of employment law.

Abhijit "Beej" D. on ContractsCounsel
View Abhijit "Beej"
5.0 (1)
Member Since:
October 25, 2021
Scott S. on ContractsCounsel
View Scott
4.9 (14)
Member Since:
October 26, 2021

Scott S.

Free Consultation
Get Free Proposal
New York, NY
16 Yrs Experience
Licensed in NY
Benjamin Cardozo School of Law

Scott graduated from Cardozo Law School and also has an English degree from Penn. His practice focuses on business law and contracts, with an emphasis on commercial transactions and negotiations, document drafting and review, employment, business formation, e-commerce, technology, healthcare, privacy, data security and compliance. While he's worked with large, established companies, he particularly enjoys collaborating with startups. Prior to starting his own practice in 2011, Scott worked in-house for over 5 years with businesses large and small. He also handles real estate leases, website and app Terms of Service and privacy policies, and pre- and post-nup agreements.

Reuben O. on ContractsCounsel
View Reuben
Member Since:
October 21, 2021

Reuben O.

Senior Managing Attorney
Free Consultation
Get Free Proposal
14 Yrs Experience
Licensed in ID, WA
The University of Iowa

As an entrepreneur at heart, I enjoy working with business owners and executives on a variety of corporate matters, including mergers and acquisitions, corporate financing, corporate governance, public and private securities offerings, privacy regulation and early-stage corporate matters including formation. As a lawyer and business professional, I understand the value of providing personal service and focused legal answers to clients navigating a rapidly changing regulatory environment. Whether in Aerospace, Consumer Goods, or Technology, I find great success in work collaboratively with clients to strategical structure their business or implementing strategic growth-oriented financing opportunities.

Thaddeus W. on ContractsCounsel
View Thaddeus
Member Since:
October 22, 2021

Thaddeus W.

Free Consultation
Get Free Proposal
Los Angeles, Ventura County, New York City
26 Yrs Experience
Licensed in CA, NY
University of Notre Dame Law School

Experienced legal counsel to entrepreneurs, small businesses, and investors. Advising clients starting, buying, selling, operating, financing, and investing in businesses // U.S. Army Veteran // Ironman Triathlete, Marathoner, Open Water Swimmer, USAT Triathlon Coach // Lover of Dogs, Cribbage, Craft Beer, Bourbon, and Cigars

Nichole C. on ContractsCounsel
View Nichole
Member Since:
October 22, 2021

Nichole C.

Free Consultation
Get Free Proposal
17 Yrs Experience
Licensed in KY
University of Louisville, Brandeis School of Law

Licensed attorney in KY and Federally JD, 2006 University of Louisville MBA, 2006 University of Louisville BS, 2001 Berea College Licensed Title Agent Arbitrator and Certified Mediator Business Consultant Adjunct Professor, Law and Business

Michelle F. on ContractsCounsel
View Michelle
Member Since:
January 24, 2022

Michelle F.

Free Consultation
Get Free Proposal
New York
5 Yrs Experience
Licensed in NY
Touro College Jacob D. Fuchsberg Law Center

I provide comprehensive legal and business consulting services to entrepreneurs, startups and small businesses. My practice focuses on start-up foundations, business growth through contractual relationships and ventures, and business purchase and sales. Attorney with a demonstrated history of working in the corporate law industry and commercial litigation. Member of the Bar for the State of New York and United States Federal Courts for the Southern and Eastern Districts of New York, Southern and eastern District Bankruptcy Courts and the Second Circuit Court of Appeals. Skilled in business law, federal court commercial litigation, corporate governance and debt restructuring.

Steve C. on ContractsCounsel
View Steve
Member Since:
October 26, 2021

Steve C.

Principal | Attorney
Free Consultation
Get Free Proposal
24 Yrs Experience
Licensed in CA
Loyola Law School

I am a corporate and business attorney in Orange County, CA. I advise start-ups, early-growth companies, investors, and entrepreneurs in various sectors and industries including technology, entertainment, digital media, healthcare, and biomedical.

Oscar B. on ContractsCounsel
View Oscar
Member Since:
October 28, 2021

Oscar B.

Free Consultation
Get Free Proposal
Saint Petersburg, FL
21 Yrs Experience
Licensed in FL
Stetson University, College of Law

Oscar is a St. Petersburg native. He is a graduate of the University of Florida and Stetson University, College of Law. A former US Army Judge Advocate, Oscar has more than 20 years of experience in Estate Planning, Real Estate, Small Business, Probate, and Asset Protection law. A native of St. Petersburg, Florida, and a second-generation Gator, he received a B.A. from the University of Florida and a J.D. from Stetson University’s College of Law. Oscar began working in real estate sales in 1994 prior to attending law school. He continued in real estate, small business law, and Asset Protection as an associate attorney with the firm on Bush, Ross, Gardner, Warren, & Rudy in 2002 before leaving to open his own practice. Oscar also held the position of Sales & Marketing Director for Ballast Point Homes separately from his law practice. He is also a licensed real estate broker and owner of a boutique real estate brokerage. As a captain in the US Army JAG Corps, he served as a Judge Advocate in the 3rd Infantry Division and then as Chief of Client Services, Schweinfurt, Germany, and Chief of Criminal Justice for the 200th MP Command, Ft. Meade, Maryland. He is a certified VA attorney representative and an active member of VARep, an organization of real estate and legal professionals dedicated to representing and educating veterans. Oscar focuses his practice on real small business and asset protection law.

Rachael D. on ContractsCounsel
View Rachael
Member Since:
October 28, 2021

Rachael D.

Free Consultation
Get Free Proposal
New York
11 Yrs Experience
Licensed in NY
Touro Law

We help simplify every transaction and provide a superior level of customer service to create long lasting and trusted relationships with our clients. Our goal is to guide our clients with practical and zealous legal representation and eliminate the difficult nature of any legal transaction.

Find the best lawyer for your project

Browse Lawyers Now

Want to speak to someone?

Get in touch below and we will schedule a time to connect!

Request a call