How To Write A Good Memorandum Of Understanding

Sometime it takes a lawyer to create a good memorandum of understanding
Sometime it takes a lawyer to create a good memorandum of understanding

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When the negotiating is over and done with and you’ve put away your negotiation styles and your negotiating techniques, it’s time to create a memorandum of understanding (MOU) that will capture what was agreed to. This all sounds nice and easy until you actually sit down to create the MOU and discover that it’s somewhat difficult. What’s the best way to write an MOU that will make both sides happy?

What Goes Into An MOU And Who Should Write It?

If I’ve been able to convince you that an MOU is a critical last step in any negotiation, then we can now move on to tacking the next big question: just exactly what should go into an MOU?

If written correctly, an MOU should capture the agreements that both sides of the table were able to reach regarding a number of different issues. These issues can include such things as the final price, any terms, how and when delivery will occur, and, of course, the specific products and services that will be provided.

If any of these agreements were reached by using outside resources, such as key documents, industry specifications, or procedures, then these will be referenced by the MOU. You need to keep in mind that one of the jobs of the MOU is to assist the teams that will be tasked with writing the final contract to understand what the thinking of both sides of the table was when the agreement was reached.

Do not try and get all fancy when you are creating an MOU. Instead, use plain words instead of words that you think a lawyer would use – you’re not a lawyer and so don’t try to play one now. Realize that the fundamental purpose of an MOU is to create a document that has the same legitimacy that an oral agreement would have. If you do this correctly, then your MOU will make it very difficult for either side of the table to change their minds after the negotiations are over.

This of course leads us to one of the fundamental questions that needs to be answered: just exactly who should be writing the MOU? The answer is you. The thinking here is that even though it means more work for you, if you are the one who writes the MOU then you’ll be able to control what goes into it and what words are used to describe it.

How To Use A MOU

Once you’ve created an MOU, what should come next? How does one go about using this document?

After you have created the MOU, pause for a moment. Do not immediately present the MOU to the other side of the table. Instead, use this time to have your team take a look at it. Any errors or omissions that they find can be corrected before you present the MOU to the other side and this will help you to appear to be more credible

If you are the one who was charged with writing the MOU, then you will be the one who controls what goes into the MOU. This is important because in every negotiation, there are issues that may not have been quite resolved. What this means for you is that you can leave these issues out of the MOU. You’d be amazed at how often when you do this, issues that may have held up everyone’s ability to agree on the final contract just fade away.

Once the final contract has been written, the value of the MOU will become very clear. You need to sit down and review the final contact while reading the MOU. Everything that was detailed in the MOU needs to have found its way into the final contract. If it’s not there, then you need to have a change made to the final contract. Your MOU is what is going to prevent you from signing a contact that does not contain everything that you originally agreed to.

What All Of This Means For You

When an agreement has been reached at the end of a principled negotiation, it’s time to document what has been agreed to. The memorandum of understanding (MOU) is the document that is created to allow both parties to confirm that they truly have reached an agreement.

Creating an MOU that will be agreeable to both sides of the table is actually much harder than it looks. It must cover all of the important parts of the negotiated agreement including the final price, the products or services that will be provided, and how they will be delivered. You should always try to be the person who writes the actual MOU. Once created, the MOU will prevent the other side from trying to change the terms of the agreement.

Most negotiators would like the negotiation to be over once an agreement has been reached. Experienced negotiators know that creating the MOU is the final important step. If you take the time to do this step correctly, then you’ll end up with better deals that everyone can live with.

– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Negotiating Skills™

Question For You: How hard do you think you should push in order to be selected as the person who writes the MOU?

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What We’ll Be Talking About Next Time

As negotiators we all know what it feels like to run into a brick wall during the negotiation process. We may be involved in negotiations and it just feels like no matter what negotiation styles or negotiating techniques we use, we are getting nowhere fast. Every issue that we pick up and try to negotiate with the other side seems to just end up with us agreeing to disagree. Is this a hopeless case – according to the negotiation definition are we deadlocked? It turns out that there may be a way out of this jam. What you are going to need to do is to take a step back and look at the big picture.

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