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Memorandum of Understanding
A Memorandum of Understanding (MOU) will typically be used in the not-for-profit sector when organisations wish to co-operate or share information with each other, allowing each to make the most of the other's specialist skills or knowledge.
An MOU will typically establish a framework for the collaboration between the organisations and express the common goals or vision of the parties to the MOU. In general, an MOU will not deal with the specific details of particular projects. An MOU is therefore usually more of a 'high level' agreement.
An MOU is generally considered ‘an agreement to agree’ or an agreement to enter into a more specific and comprehensive contract or agreement at a later time after further negotiations. However, this is not always the case.
To help avoid any uncertainty about whether an MOU is legally binding, your organisation should make sure the MOU contains a specific statement to the effect that it is not intended to create legally binding obligations. If you need to rely on the other organisation taking certain actions or if your organisation stands to lose money if the other party doesn’t act – your organisation should enter into a contractual arrangement.
Our fact sheet contains more detailed information including:
- what is an MOU and when should an MOU be used?
- what issues will an MOU cover?
- what are your obligations under an MOU?
- is an MOU a legally binding document – like a contract?
- can you have an MOU that is part binding?
We have developed a base template MOU which provides an example of the way an MOU can be set out and the types of details it may include.
The template is a guide only. Not all clauses may be relevant to your organisation’s needs and there may be information that you should cover that is not included in this template. Your organisation may need to seek legal advice for its particular circumstances.
Health Justice Australia has developed a kit which includes a template MOU with inbuilt alternatives to suit a broad range of situations. Entering into a health Justice partnership: Memorandum of understanding resource kit.
The content on this webpage was last updated in March 2022 and is not legal advice. See full disclaimer and copyright notice.