- names of parties involved
- scope of work
- any financial obligations
- dates of agreement
- any key contacts
David B.
46 projects on CC CC verifiedStacey D.
41 projects on CC CC verifiedBryan B.
288 projects on CC CC verifiedScott S.
75 projects on CC CC verifiedSteps to Completing a Memorandum of Agreement
Below are 5 Steps to follow when completing an MOA:
- Step 1: Decide and define the parties. You need to consider who will sign the MOA and who else will be cooperatively working together. This includes anyone who may be involved in completing the agreed objectives.
- Step 2: Draft the Agreement. Choose a single person to be responsible. You know what they say about too many cooks in the kitchen. An agreement needs to be precise, and sometimes having one person responsible for drafting it helps keep it focused.
- Step 3: Send the MOA for review. The review is a chance for each party involved to ensure they are represented correctly and to ensure there is a general understanding of what is expected from the beginning. It is good practice to include a copy of the agreement and a sign-off sheet if multiple parties are involved in the review. This way, you know everyone has seen and reviewed the MOA before signing.
- Step 4: Finalize the Agreement. This is when any notes, changes, or additions from the reviewing parties are incorporated into a final draft. Again, sticking with one person makes this part easier to handle. You will also need to determine who will be signing the MOA. It may be the case that there are parties involved in the review who will not be responsible for signing it.
- Step 5: Sign the Agreement. You will need everyone responsible for meeting the objectives to sign the MOA. You will need to create photocopied records for all signatories. In the case others are involved, you should provide copies.
Overall, you want the agreement to be understood by everyone involved, so use simple and easy-to-understand language. You should also try and compose it with positive language, describing what a party will do, not what they won’t. Finally, ensure a balance of expectations among the parties involved, so no one party shoulders more of the responsibilities.
Sometimes it’s easier to use the parties’ own words to draft an agreement of this nature. It needs to be specific but straightforward enough to answer the who, what, when, and how questions.
Here’s an article about creating an MOA.
Image via Pexels by fauxels
Memorandum of Agreement vs. Memorandum of Understanding
There are a few differences between a Memorandum of Agreement with a Memorandum of Understanding (MOA) that are worth noting.
Difference #1:
- An MOU is not legally binding in most cases
- An MOA is a legal agreement
Difference #2:
- An MOU can be used for simple agreements not involving money
- An MOA is reserved for more complicated agreements than involve exchange of money for services
Difference #3:
- An MOU includes a simple statement of goals – like a formal handshake
- An MOA uses legal language to create a statement of “general understanding”
Is a Memorandum of Agreement Legally Binding and Enforceable?
A memorandum of agreement (MOA) is a legally binding and enforceable type of contract. When two parties enter into an MOA, the MOA is a formal understanding of what is expected between the parties. It includes agreed objectives and assigns risk.
In the case of a memorandum of understanding, the MOU serves to formalize a goal between two parties without making it legally binding. An MOU is similar to a handshake, where the integrity of both parties is the only binding force involved.
The MOU is usually a good first step to a legal agreement, but in and of itself is not legally binding. However, there are cases in which a clause within the MOU renders it legally binding.
Look for these key elements in an MOU; they make it legally binding.
- An Offer. If an offer is included, there is an expectation, usually of money or exchange of service. But, again, language like this in the MOU would make it legally binding.
- Acceptance of Offer. If an acceptance is made, as noted above, it usually means money will be exchanged for services. If that offer is accepted, it is legally binding.
- Legally Binding Intent. Again, similar to the exchange mentioned above. Any language indicating legally-bound intention in the MOU makes it subject to liabilities.
- Consideration. If there is a portion that outlines what each party can expect to receive from the agreement, monetary or otherwise, it is legally binding.
When Would You Use a Memorandum of Agreement?
Memorandums of agreement are regularly used in business and even treaty negotiations.
In business, they can be used for situations such as:
- Leasing facilities, land, or equipment
- Service contracts
- Employment
- Asset purchases
- Non-disclosure agreements
- Technical training
Additionally, governments make use of MOAs to establish treaties between countries. These agreements require review in the United Nations Treaty Collection to determine whether they can be legally binding and avoid “secret diplomacy.” However, many of these forms of MOAs are made, and continue to be held, in confidence. The draw, for the government, of the MOA over other formal options is that they can be made without legislative approval, which makes the process much simpler to create.
Get Help with an MOA
When considering any potentially binding agreement, like a memorandum of agreement, you should enlist the help of a trained lawyer. An experienced lawyer can review and ensure you fully understand the implications of what you are signing before you sign.
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Moss S.
Free Consultation Member Since:November 17, 2021
Moss S.
Free Consultation Boca Raton, FL 36 Yrs Experience Licensed in FL, MA, RI Suffolk Law SchoolOver 30 years of experience practicing commercial real estate and complex business litigation law.
Chia-Fen Y.
Free Consultation Member Since:November 16, 2021
Chia-Fen Y.
Free Consultation Fullerton, CA 10 Yrs Experience Licensed in CA University of California, DavisAttorney Yu represents clients in business and real estate transactions and has successfully handled more than 200 cases. She has experience in corporate law, including forming legal entities, employment law and workers’ compensation law matters pertaining to wage and hour violations, industrial injuries, misclassifications, and other employment-related torts and contracts. Attorney Yu works with employers to address employee relationship issues, develop effective policies and craft employment agreements. Attorney Yu regularly advises clients on the legal and business aspects of potential investments, ongoing business operations, debt collections, shareholders and partners disputes, business purchase agreements, risk assessment, intellectual property disputes, and potential contract disputes. She regularly handles real estate law matters such as landlord-tenant disputes, lease agreements, buy-sell disputes, title disputes, and construction disputes. She also has substantial experience settling debts, and she drafts, reviews and negotiates settlement agreements. Attorney Yu conducts extensive legal research and provides on-point legal advice to both corporate and individual clients.
Ramanathan C.
Free Consultation Member Since:January 20, 2022
Ramanathan C.
Free Consultation 6 Yrs Experience Licensed in NY London School of Economics and Political ScienceDual Qualified New York Attorney & Enrolled NZ Barrister & Solicitor
Natalie A.
Commercial Counsel Free Consultation Member Since:November 13, 2021
Natalie A.
Commercial Counsel Free Consultation Montreal, Quebec, Canada 18 Yrs Experience Licensed in AK Université de Sherbrooke, Sherbrooke, Quebec - LLB Civil LawI am an experienced in house counsel and have worked in the pharmaceutical, consumer goods and restaurant industry. I have experience with a variety of agreements, below is a non-exhaustive list of types of agreements I can help with: Supply Agreements Distribution Agreements Manufacture Agreements Service Agreements Employment Agreements Consulting Agreements Commercial and residential lease agreements Non-compete Agreements Confidentiality and Non-Disclosure Agreements Demand Letters Termination notice Notice of breach of contract My experience as in house counsel has exposed me to a wide variety of commercial matters for which I can provide consulting and assistance on. I have advised US, Canadian and International entities on cross-functional matters and have guided them when they are in different countries and jurisdictions as their counterparties. I can provide assistance early on in a business discussion to help guide you and make sure you ask the right questions even before the commercial agreement needs to be negotiated, but if you are ready to put a contract in place I can most definitely help with that too.
Jeff C.
Free Consultation Member Since:November 16, 2021
Jeff C.
Free Consultation Denver, Colorado 38 Yrs Experience Licensed in CO Creighton UniversityJeff Colerick has been practicing law for over 30 years and has devoted his professional career to providing clients with intelligent representation and personal care. His experience as a lawyer involving complex matters has resulted in a long history of success. Jeff has built a practice based on a deep understanding of real estate assets and corporate activities. He combines his industry knowledge with a practical and collaborative approach to problem solving. Jeff’s client relationships are strong because they are built on mutual respect. Jeff talks the language of real estate and understands that it is a vehicle to deliver your business strategy. Jeff provides practical, responsive, and strategic advice related to real estate acquisition, construction, leasing, and sale of a wide range of real property types, including office, retail, medical, industrial, industrial flex-space, mixed-use condominium, multifamily and hospitality. As leader of the Goodspeed Merrill real estate practice group, Jeff represents clients with commercial and residential transactions, purchases and sales, land acquisition and development, real estate investment and financing, financing liens and security interests, and commercial leasing and lease maintenance, including lease enforcement support and advice. The firm represents clients in matters concerning construction, lending, developers, contractors and subcontractors, cell site leasing, property and boundary disputes, common interest community law, and residential condominiums and planned communities.
Harrison K.
Attorney and Executive Free Consultation Member Since:November 17, 2021
Harrison K.
Attorney and Executive Free Consultation Los Angeles 29 Yrs Experience Licensed in CA, MD California Western School of LawHarrison Kordestani is an executive with over twenty-five years experience in entertainment and media, energy, technologies, and start-ups. Mr. Kordestani has also developed a specialized legal and strategic consulting practice representing select entertainment, oil and gas, mortgage lending, and technology start-up clientele. He is also deeply passionate about new technologies and has also actively worked in building companies in the video-on-demand, wearable tech, information of things, demand prediction and app-marketing spaces. As an attorney, Mr. Kordestani's focus has been on transactional drafting and negotiation and providing ongoing legal counsel, corporate compliance, and contract interpretation to numerous private individuals as well as companies in varied fields.
