What is a Memorandum of Understanding Review?
A memorandum of understanding is a document that describes a formal working relationship between parties. It checks that they are on track with their goal before a legal document is drawn up and signed.
A memorandum of understanding isn’t legally binding, but it is important because it creates an outline for the parties’ working relationship, such as by defining their roles, how disputes are resolved, and more. It’s therefore important to review the memorandum of understanding closely so that errors or other issues are corrected and resolved.
Read the rest of this article to explore what a memorandum of understanding typically contains, how to review it, and when to consult with a lawyer for a legal review to give you peace of mind.
What are Key Features of a Memorandum of Understanding?
A memorandum of understanding usually contains information such as the following:
- Parties. The parties who are involved in the agreement will be identified, such as a company or individuals. All details must be correct.
- Goals. The reason for the partnership needs to be clearly defined.
- Roles. What both parties will contribute to the working relationship should be described in detail to ensure aligned expectations.
- Duration. The agreement’s timeline, such as its effective and end dates, should be included to prevent issues.
- Resources. This section refers to the resources, such as financial or staff assistance, that will be required for the agreement duration.
- Confidentiality. Since the parties will be working together, they will likely share information between them. There should be provisions for how sensitive information will be stored and protected.
- Termination. If either party wants to end the contract earlier than expected, this agreement should specify what processes they should follow.
- Dispute resolution. If there are disagreements between parties, the agreement should mention clear ways of resolving it, such as via mediation or arbitration.
- Non-binding. A memorandum of understanding isn’t usually legally binding, but certain aspects of it can be, which is why its non-binding status should be confirmed in the document for clarity.
How Should You Review a Memorandum of Understanding?
When reviewing a memorandum of understanding, there are some important things to look for. These include the following:
Clarify the Purpose
You want the reason for the memorandum of understanding to be clearly defined, down to details such as deliverables and expectations. If there’s anything vague, it can cause misinterpretations of what’s required and future disputes.
Consider the Duration
You want to think about the contract duration as you don’t want to be stuck in an agreement that doesn’t suit you. Check that the start and end dates are aligned with your individual or company goals.
Define Roles
Both parties entering into the agreement will have duties and roles. These should be clearly defined so that there’s no uncertainty or potential for disagreements. This also serves to keep parties accountable.
Check the Financial Terms
You want to ensure that all payment amounts, deadlines, and other information are detailed and specific. Consider additional things like what happens if there are late payments or deliverables aren’t submitted on time.
Assess Confidentiality
Should the agreement include intellectual property or data, you’ll want to ensure it has legally-sound protections. The agreement should also be checked for legal compliance with all data protection laws.
Look at Post-Termination Clauses
Once you’ve checked how you can end the agreement early, you should make sure you’re informed of all post-termination duties or payments that could apply. If these aren’t included in the memorandum of understanding, you should discuss them with the other party.
What About Amendments?
It’s worth checking if you can make changes to the document, such as if your requirements or circumstances change. Usually, both parties will need to agree on the suggested modifications and they’ll have to be made in writing.
Do You Need a Lawyer to Review a Memorandum of Understanding?
A memorandum of understanding, although non-binding, is meant to provide clarity on duties, roles, and rights of all parties involved in the agreement. Non-binding documents like this one can affect the parties’ future contracts, which is why they need to be professionally drafted and reviewed.
During a legal review, a lawyer will be able to identify any risks involved with the agreement. They’ll focus on certain clauses, such as those related to confidentiality, that can result in legal issues should they not be interpreted by parties in the intended way.
Some of the other tasks a lawyer will help you with during a memorandum of understanding review include the following:
- Simplifying all language in the document so that it’s clear and easy for all parties to understand.
- Revising the document to ensure it’s fair, clear, and legally sound.
- Ensuring that the document is aligned with your priorities and you don’t take on unnecessary liabilities.
- Negotiating with the other party on your behalf if you’d like to make changes to the document.
Despite the above, you don’t always need a lawyer to review your memorandum of understanding. If your agreement is simple, clear, and doesn’t include significant financial terms, you might feel confident to review the agreement yourself.
Where to Find a Lawyer for a Memorandum of Understanding
If you’d like to hire a lawyer for a memorandum of understanding review, you can find one on an online legal platform that makes it easy to find a reputable lawyer. ContractsCounsel is one of the largest online legal marketplace that connects clients with vetted lawyers for a contract review and other legal guidance.
Here are the steps to follow if you need a legal review of your memorandum of understanding from an experienced lawyer.
1. Post your project for free on the ContractsCounsel marketplace.
2. You’ll be prompted to include a bit of information about what you require so lawyers know how to help you.
3. You’ll receive multiple lawyer bids from lawyers on the platform.
4. You’ll review the lawyers' profiles based on data provided on the platform, such as their location, years of experience, expertise, and client ratings.
5. Select the best lawyer according to your legal requirements and hire them for the work.
