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Memorandum of understanding template

Two organisations record the plan for a collaboration before they sign the full contract.

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Memorandum of Understanding

This Memorandum of Understanding (the "MOU") is made on Effective date between Party A (organisation), of Party A address ("Party A"), and Party B (organisation), of Party B address ("Party B").

1. Binding and non-binding parts (binding)

This MOU has two parts:

  • Part A (sections 2 to 6) records the terms that the parties plan to put in a later definitive agreement. Part A is not legally binding.
  • Part B (sections 7 to 14) sets out promises that bind the parties from the date both parties sign.

Only sections 1 and 7 to 14 are legally binding. No other section binds the parties. Words such as "will" or "plans to" in Part A describe present intentions, not promises.

Part A becomes binding only through a definitive agreement signed by both parties. Starting work, sharing resources, or making a payment does not make Part A binding.

2. Purpose (non-binding)

The parties want to explore and plan a collaboration for this purpose: Purpose of the collaboration.

3. Scope (non-binding)

The parties plan to work together on: Scope (what the parties plan to do together).

Work that this section does not describe is outside the collaboration unless both parties agree in writing.

4. Roles and contributions (non-binding)

  • Party A plans to: Party A role and contributions.
  • Party B plans to: Party B role and contributions.

Each party plans to pay for its own contributions until the definitive agreement sets the commercial terms.

5. Timeline and project leads (non-binding)

The parties plan these milestones: Main milestones and dates.

  • Party A project lead: Party A project lead (name, email)
  • Party B project lead: Party B project lead (name, email)

The project leads plan to meet regularly to review progress and open points.

6. Definitive agreement and next steps (non-binding)

The parties plan to negotiate a definitive agreement and aim to sign it by Target date to sign the definitive agreement. They expect it to cover:

  • the final scope, deliverables, and service levels
  • prices, payments, or revenue share
  • ownership and licensing of intellectual property
  • warranties, liability, and insurance
  • term, termination, and exit
  • any approvals that each party needs

Each party may make reasonable checks on the other before it signs. Until both parties sign the definitive agreement, each party may decide not to go ahead, for any reason, without liability to the other. Only Part B applies to that decision.

7. Binding terms (binding)

Part B means sections 7 to 14. Part B and section 1 are legally binding from the date both parties sign this MOU.

Each party makes the promises in Part B in return for the other party's promises in Part B, and for the time and information that the other party puts into the talks.

8. Confidentiality (binding)

Confidential information means non-public information that one party gives the other in connection with this MOU, if it is marked confidential or a reasonable person would treat it as confidential. The terms of this MOU and the fact of the talks are also confidential.

The party that receives confidential information will:

  • use it only to assess and plan the collaboration
  • share it only with its staff and advisers who need it and who have similar duties of confidentiality
  • protect it with at least reasonable care

These duties do not apply to information that is public through no fault of the receiving party, that it already had or develops independently, or that it receives lawfully from a third party. A party may disclose information that the law or a court requires, after it tells the other party where the law allows.

On request, and when this MOU ends, each party returns or destroys the other party's confidential information. These duties continue for Confidentiality period after the MOU ends (years) years after this MOU ends. This MOU gives no licence to any intellectual property.

9. Exclusivity (binding)

From the effective date until Exclusivity ends on, neither party will seek, discuss, or agree a collaboration with a third party that has the same purpose as this MOU. This applies whether the party acts directly or through others.

Exclusivity ends earlier if this MOU ends under section 12. Outside this section, each party is free to work with others.

10. Costs (binding)

Each party pays its own costs of the talks, the checks, and this MOU, including adviser fees. This applies even if the parties never sign a definitive agreement.

11. No partnership and no announcements (binding)

This MOU does not create a partnership, joint venture, agency, or employment relationship. Neither party may make promises or take on obligations for the other.

Neither party will make a public announcement about the collaboration, or use the other party's name or logo, without the other party's written consent.

12. Term and ending (binding)

This MOU starts on the effective date. It ends on the earliest of these dates:

  • the date both parties sign the definitive agreement
  • Latest date the MOU ends
  • Notice to end the MOU early (days) days after either party gives written notice to end it

When this MOU ends, sections 1, 8, 10, 13, and 14 continue. Ending this MOU does not affect a claim for an earlier breach of Part B.

13. General (binding)

  • Changes to this MOU are valid only in writing signed by both parties.
  • This MOU replaces earlier discussions and drafts on its subject.
  • Neither party may transfer its rights under Part B without the other party's written consent.
  • Notices are in writing and go to the addresses above, or to an email address that a party gives for notices.
  • The parties may sign this MOU electronically and in counterparts.
  • Each person who signs confirms that they may sign for their organisation.

14. Governing law and disputes (binding)

This MOU is governed by the laws of Governing law (country or state). The parties will first try to settle any dispute by talks between senior managers for 15 days. After that, the courts of Governing law (country or state) may decide the dispute.

Either party may ask a court at once for an order to stop a breach of section 8 or 9.

Signatures

Party A (organisation)

Signature: ____________________________

Date: ______________

Party B (organisation)

Signature: ____________________________

Date: ______________

The full template. Highlighted words are blanks you fill in. A plain-language starting point, not legal advice.

Tips for a good memorandum of understanding

  1. 1

    List by section number which parts bind and which do not, at the top of the MOU.

  2. 2

    Write the plan as intentions, for example "plans to", not as promises.

  3. 3

    Give any exclusivity a fixed end date, not "a reasonable period".

  4. 4

    Do not start the real work on the MOU alone. Sign the definitive agreement first.

  5. 5

    In India, pay stamp duty under your State's stamp law before you sign.

Questions

Is a memorandum of understanding legally binding?

It depends on the words and on what the parties do next. Courts look at the whole document, not the title. This template says which sections bind (confidentiality, exclusivity, costs, ending and governing law) and that the commercial plan does not bind until both sides sign a definitive agreement.

Can I change the wording?

Yes. Open the template in SignKaro, fill in the blanks, and change any line yourself or ask the built-in AI to rewrite a clause. Then send it for signature.

Is this template legal advice?

No. It is a plain-language starting point. Laws differ by country and state, so ask a lawyer to review contracts that carry real risk.

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