Big companies, organizations, cooperations, academic institutions, and others always issue a huge number of memos regularly. With its big components inside, no wonder if each department will collaborate with department to department across the branches. For example, a bank has some departments including security, credits, marketing, and accounts. All of the are always communicating and aligned with each other through a memo. On this page, we want to talk about the formal memorandum of agreement templates that you can use for regular tasks in your business.
You can learn its format from the letter of the understanding sample that you can get for free on this website. Therefore, whenever you want to use it, you can use this memo templates.
Memorandum of Agreement Vs Contract
The Memorandum of Agreement (MOA) is a document used in business to draft the agreement between the two parties or individuals which also followed with a contract between them. This document is usually used in dealing with the common work. This is purposed to create the same understanding.
Then what is the difference between formal memorandum or agreement with the contract? Even though both terms sound the same, there is a big difference between them. In this case, the contract is enforceable in front of the law and it is a legal document. On the contrary, the memo doesn’t have this power.
The contract is usually used when there is an exchange of value. This can be space, goods, service, assets and many more. In short, there is giving and returning between parties. This is why this needs a contract. Furthermore, the contract should state clear clauses and terms so it has the power in front of the law.
On the other side, the memo is more like to give clarity and also specify certain arrangements between two parties. For example sharing a permanent space, working together for the same mission, etc which that is not about exchanging value as we see in the contract.
The purpose of sending a memorandum of agreement is to develop a good relationship among parties and help them to monitor things they have agreed on.
Why Is The Formal Memorandum Of Agreement Templates Important?
Even though this document doesn’t bind each party legally, this can define the relationship among parties who agree to work on something together. There are some examples you can see as the reference, which are:
- Providing members to every director
- Referring to members or participants
- Contributing to certain projects or activities
- Using a service of the third party such as contractors or consultants
- Providing support for ongoing programs such as marketing, publicity, referrals, materials, etc
- Collaborating with another party in certain ways.
Therefore, if you are always dealing with another party for the same purpose, using the memo is wise in a professional way. Make sure you differentiate it with the contract purpose. Don’t forget to use our formal memorandum of agreement templates. You can find it in various formats.
Sample Formal Memorandum of Agreement Template