A Memorandum of Agreement (MOA) is a written document describing a cooperative relationship between two parties wishing to work together on a project or to meet an agreed-upon objective. An MOA serves as a legal document and describes the terms and details of the partnership agreement. An MOA is more formal than a verbal agreement but less formal than a contract. Organizations can use an MOA to establish and outline collaborative agreements, including service partnerships or agreements to provide technical assistance and training. An MOA may be used regardless of whether or not money is to be exchanged as part of the agreement.
Template: US Army Memorandum of Agreement
The typical format of an MOA include:
- Purpose of the Agreement
- Name of parties involved
- Brief description of the scope of work
- Financial obligations of each party, if applicable
- Dates agreement is in effect
- Key contacts for each party involved
- Detailed Description of Roles and Responsibilities
- Payment Schedule if Applicable
- Duration of the Agreement
- Modification of Termination
- Signatures of Parties’ Principals
Memorandum of Understanding (MOU)
Defines a “general area of understanding” within both parties’ authorities and no transfer of funds for services is anticipated. MOUs often state common goals and nothing more. Thus, MOUs do not contemplate funds transfers and should usually include language that states something similar to: “This is not a funds obligating document; by signing this agreement the parties are not bound to take any action or fund any initiative.” An MOU may be used to outline the operation of a program so that it functions a certain way.
Two agencies that have similar goals may agree to work together to solve a problem or support each other’s activities by using an MOU. The MOU is nothing more than a formalized handshake and not a legally binding document.
Steps to writing a Memorandum of Agreement (MOA) or MOU
- Step 1: Determine the Appropriate Agreement Type
- Memorandum of Agreement: A legal document that describes a partnership and agreed-upon objectives
- Memorandum of Understanding: Agreement of common goals between two or more parties
- Step 2: Determine the parties involved in developing the agreement
- Who needs to sign the MOA or MOU and who needs to be a part of its development?
- Step 3: Create a Draft Agreement
- Have one person be the focal point for drafting the agreement
- Step 4: Submit Draft Agreement for Coordination Review
- Send the Draft MOA or MOU out for coordination with a sign-off sheet. This will ensure all parties have seen and reviewed the draft MOA or MOU
- Step 5: Finalize Agreement
- Write the finalized agreement
- Step 6: Sign Agreement
Tips for Writing a Memorandum of Agreement (MOA) or Memorandum of Understanding (MOU)
- Only use one Memorandum of Agreement form when writing the terms of an agreement.
- Keep it simple. Make sure that the wording is clear and concise. Whenever possible, use the wording of the parties when drafting the mediation agreement.
- Agreements should strive for balance – a “sandwich” model can be useful. Start with “both parties agree” then state what each individually agrees to then close with “both parties agree.” Balance is not that each party has the same number of bullet points but that what is expected of each in the future has a sense of balance for them.
- Agreements should be written in positive language. For example, state what someone will do, not what they will not do.
- Agreements should be specific. As much as possible address: who, what, when and how questions.
- Careful reality checks should be done with the parties to ensure that the terms of the agreement are realistic and within their scope of authority.
- Carefully review each item in the terms of agreement with both parties to ensure that each item is correct and appropriately captures each party’s intent. You should read each item out loud and ask each party if the wording is accurate. Each party should be able to understand their responsibilities in the terms of the agreement.
- Keep in mind that the Memorandum of Agreement is a Settlement Agreement; therefore, appropriate personnel will need to clearly understand the terms of the agreement in order to effectuate the contents of the agreement.
- Be absolutely sure that all parties sign the agreement.
- All parties should receive a written copy of their agreement before they leave the session.
- MOUs tend to be used for simple common-cause agreements which are not legally binding. MOAs, on the other hand, establish common legal terms that establish a “conditional agreement” where the transfer of funds for services are anticipated.
AcqLinks and References:
- Template: NASA Memorandum of Agreement
- Template: US Army Memorandum of Agreement
- Template: US Naval Academy Memorandum of Agreement
- Checklist: Memorandum of Agreement (MOA) Checklist