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
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?