Building a Memorandum of Understanding

A memorandum of understanding (MOU) is a jointly-signed (and sometimes jointly-phrased) statement of agreement to proceed toward a goal that will be realized as some type of alliance or partnership. Examples would be an access road through band-owned property, or a shared sawmill that would become a joint venture. Often the MOU is preceded by a letter of intent signed by each party

» Sample Memorandum of Understanding (MOU)

Questions to consider writing an MOU:

  • Who are the partners involved?
  • What is the arrangement? (i.e. sub-contracting, joint venture, other)
  • What is the project and its purpose?
  • How long is the agreement going to be in effect for? (i.e., six months, one year?)
  • Who will manage the day-to-day business of carrying out and maintaining the MOU?
  • A clear process for how partners can exit from the agreement if things are not working for everyone’s benefit.
  • Clear definition of each party’s risks and responsibilities.
  • What will the decision making process be, and who will be a voting member or will decisions be by consensus?
  • If parties are going to be paid in the venture, what is the schedule and details?
  • Where will the project be located and which partner will be housing the staff?
  • Identify a clear plan for marketing the project in terms of logos, web-sites, and who will get top billing. Ensure that project funders are identified in all publicity.
  • What is the process of bringing new partners into the project?
  • What process will be used to make changes to the agreement?
  • How will arising conflicts be dealt with?
  • Is one partner taking on more risk (i.e., funding agreements with government) and how will that be identified?

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