1/15/2024 0 Comments Mou contractHow long will the contract last? Should the term be based on the passage of time or the occurrence of a specific event or milestone? Will it renew automatically unless notice to terminate is provided? Who needs to be included? Is it a traditional two-party contract or do additional parties need to be obligated? To flesh out the terms of a contract consider the parties’ intentions with respect to the following: For example, to better reflect the less combative nature of nonprofit endeavors, we use titles such as Collaboration Agreement or Affiliation Agreement in place of the Joint Service Agreement or Acquisition Agreement. The parties can then rely on the MOU as a basis to move forward with the negotiation of a more complete contractual agreement.Īnother technique we use to soften nonprofit contracts is to get creative with the titles. When considering whether to rely on MOUs versus contracts, a better practice is to create a non-binding MOU to memorialize the key terms of the deal for larger, more complex transactions. For this reason, we advise our clients to enter into contracts that fully document their expectations.Ī bare-bones agreement may feel less intimidating but it leaves quite a bit to argue about if a party’s expectation is not fulfilled. Under this definition, the MOUs we see nonprofits create are almost always bare-bones legal contracts.Įven if an MOU is an enforceable contract, MOUs rarely include the level of detail required to resolve misunderstandings when they arise. However, a contract is, at its core, an offer by one party to do something, and an acceptance by the other party, and the promise to exchange something of value to seal the deal. Nonprofits tend to view MOUs as a kinder gentler way to document their intentions. MOU stands for a memorandum of understanding. Churches and Religious Organizations-Tax Resources.Tax-Exempt Organization Reference Chart. Nonprofit Mergers, Acquisitions, and Affiliations.
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