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Law of Contract - 3

Lecture # 5

Law of Contract

MoAMoU

Contract

MoAA memorandum of Agreement (MOA) is a written document describing a cooperative relationship between two parties wishing to work together on a project or to meet an agreed upon objective. An MOA serves as a legal document and describes the terms and details of the partnership agreement. An MOA is more formal than a verbal agreement, but less formal than a contract. Organizations can use an MOA to establish and outline collaborative agreements, including service partnerships or agreements to provide technical assistance and training. An MOA may be used regardless of whether or not money is to be exchanged as part of the agreement.

MoAThe components of an MOA include:I. Purpose of the AgreementThis section states the big picture of why and how the parties came together and includes:a. Name of parties involvedb. Brief description of the scope of workc. Financial obligations of each party, if applicabled. Dates agreement is in effecte. Key contacts for each party involved

MoAII. Detailed Description of Roles and ResponsibilitiesThis section identifies the mutual and joint responsibilities (collaborative tasks) and the expected result of those joint efforts. In addition, it lists the specific roles and responsibilities of each entity and clarifies the purpose of the MOA.III. Payment Schedule if ApplicableThis section should detail the amount of funding, if any, that one party will pay the other and the timing of the payment. The payment schedule should include a timeline of specific deliverables that will trigger payment.

MoAIV. Duration of the AgreementThis segment identifies the effective date of the agreement, its term (if there is one), and how the agreement can be modified or terminated.V. Signatures of Parties PrincipalsFinally, to demonstrate agreement with the terms of the MOA, spaces are provided for the names and signatures of an official from each party who is authorized to approve agreements on the party’s behalf. A space for the date the agreement was signed is also required. The MOA is not in effect until all parties have signed the MOA. Each party should then be provided with a signed original for its files.

MoUA memorandum of understanding (MOU or MoU) is a formal agreement between two or more parties. Companies and organizations can use MOUs to establish official partnerships.MOUs are popular in multinational international relations because, unlike treaties, they take a short time to ratify and can be kept confidential. MOUs may also be used to modify existing legal treaties.

MoUMOUs are not legally binding but they carry a degree of seriousness and mutual respect, stronger than a gentlemen’s agreement. Often, MOUs are the first steps towards a legal contract. In law, a memorandum of understanding is identical with a letter of intent (LOI), which is a non-binding written agreement that implies a binding contract is to follow.

MoUMemorandum of Understanding are generally recognized as binding, even if no legal claim could be based on the rights and obligations laid down in them. To be legally operative , a memorandum of understanding must (1) identify the contracting parties, (2) spell out the subject matter of the agreement and its objectives, (3) summarize the essential terms of the agreement, and (4) must be signed by the contracting parties.

The Difference between MoA & MoU

Memorandum of Agreement (MOA) is a “conditional agreement” between two or more parties where the transfer of funds for services are anticipated. The MOA is prepared in advance of a support agreement/reimbursable order form that defines the support, basis for reimbursement, the billing and payment process, and other terms and conditions of the agreement.Memorandum of Understanding (MOU) defines a “general area of understanding” within both parties' authorities and no transfer of funds for services is anticipated. MOUs often state common goals and nothing more.

Contract

An Agreement enforceable by Law is a Contract

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Contract – 5Flaws in Capacity to Contract