Memorandum of Agreement
- 217 Tanvi Khatri
- May 6, 2023
- 3 min read
Written by Tanvi khatri, student
A memorandum of agreement, also known as an MOA, is a legal document that describes a business partnership between two parties who have decided to work together to accomplish a shared goal or finish a project. The memorandum outlines the agreed-upon terms as well as the steps that must be taken in order to fulfil the agreement's objectives.
When there is money involved, MOAs are typically used, but it is not always the case.
Because of the signatures, it is regarded as a legal document. Nevertheless, it is more formal than a verbal agreement and less formal than a contract. It is applicable in business for:
Joint venture agreements
Business collaborations.
Employment agreements.
A memorandum of understanding (MOU) and a memorandum of agreement (MOA) are not the same thing. Before starting a project, an MOU is used to outline each party's perspective on it.
Even though an MOA is not a formal contract, there are some sections you should include. These sections comprise, among others:
The agreement's objective.
Parties involved and their names.
Scope of the job.
Any monetary commitments.
Dates of consensus.
Any important contacts.
Exhaustive breakdown of roles and responsibilities, as defined by the person in charge.
The agreement's length or time frame.
Modification and discontinuance.
The principals' signatures.
Creating a Memorandum of Agreement: Steps to Take
Below are 5 Steps to follow when completing an MOA:
Step 1: Choosing and defining the parties
You must take into account who will sign the MOA and other parties who will collaborate. This includes anybody who might assist in achieving the set goals.
Step 2: to draft the agreement.
Select just one person to assume responsibility. You're aware of the adage, "too many cooks spoil the broth.". An agreement needs to be precise, and sometimes having one person draft it helps keep it on topic.
Step 3: Submit the MOA for evaluation.
Each party has the opportunity to review their representation to make sure it is accurate and to confirm that everyone is clear about the expectations from the outset. If multiple parties are taking part in the review, it is best practice to include a copy of the agreement as well as a sign-off sheet. This will ensure that the MOA has been seen and reviewed by all parties before being signed.
Step 4: To complete the agreement.
Any notes, modifications, or additions made by the reviewers are now incorporated into the final draft. Once again, managing this part is made simpler by sticking with one person. Additionally, you must decide who will sign the MOA. Some of the parties involved in the review might not be required to sign it.
Step 5: Sign the contract
Each person accountable for achieving the goals must sign the MOA. For every signatory, you must make a photocopy of the document. You should provide copies if other people are involved.
Use clear, concise language to ensure that everyone involved can understand the agreement. Additionally, make an effort to write it in a positive manner by focusing on what the other party will do rather than what they won't. Last but not least, make sure that each party's expectations are fairly distributed so that no one party is given more work.
It can be simpler to draft a contract of this kind using the parties' own words. The who, what, when, and how questions must be addressed, and it must be clear and precise at the same time.
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