Free Memorandum of Understanding Template. Fill & Sign Online
A memorandum of understanding records what two parties have agreed in principle before a full contract exists. Its defining feature is ambiguity about enforceability: and that ambiguity is the single thing your MOU must remove.
Say explicitly whether it is binding. An MOU that is silent can still be enforced if a court decides the parties intended to be bound; equally, an MOU you assumed was a deal can turn out to be worth nothing. Neither surprise is pleasant.
Self-signing is free, local & private, never uploaded. Sending for signature needs a free account (just your email).
What belongs in an MOU
- Purpose: what the parties are trying to achieve together, in plain language.
- Binding or non-binding: state it directly. If mostly non-binding, list which clauses are binding: confidentiality, exclusivity and costs usually should be.
- Roles: what each side will contribute. Vagueness here is the usual reason an MOU never becomes a contract.
- Timeline: key dates, and when the MOU expires if no full agreement is signed.
- Confidentiality: this clause should be binding even when nothing else is.
- Exclusivity: whether either side may negotiate the same deal elsewhere while this is live.
- Costs: who pays for what during the exploratory phase.
Mistakes that make an MOU worthless, or dangerous
- Not saying whether it binds. Courts look at the parties' intention, and two people can give honest, opposite accounts of what that was.
- Making the confidentiality clause non-binding along with everything else. You have then disclosed your position for nothing.
- Using an MOU when you actually need a contract. If money is changing hands, write a contract.
- No expiry date. A non-binding MOU with exclusivity and no end date can block you from other deals indefinitely.
Common questions
Is an MOU legally binding?
It depends on what it says and what the parties intended. An MOU that states clearly that it is not binding generally is not, except for any clauses it marks as binding. One that is silent may be enforced if the terms look complete enough.
What is the difference between an MOU and a letter of intent?
In practice, very little. Both record a preliminary understanding. The label matters far less than whether the document states its own enforceability.
Should an MOU be signed?
Yes. Even a non-binding MOU should be signed and dated, because its whole purpose is to prove what was agreed and when. FairSign records the signing time and each signer's details in an audit trail attached to the finished PDF.
This page is general information for small businesses, not legal advice. For your specific situation, talk to a licensed attorney in your state.