Memorandum of Understanding

A Memorandum of Understanding (MoU) is a document in which two or more parties declare that they agree on a common course of action or business. It is the first stage of the making of a contract. An MoU is generally recognized as binding even though it creates no rights and obligations in itself. To be legally operative, an MoU must identify the contracting parties, spell out the subject matter of the agreement and its objectives, summarize the essential terms and must be signed by the contracting parties.

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Advantages of an MoU

Covers Entire Relationship

The Master Service Agreement covers the entire relationship between service provider and customer, covering all aspects of the contract that are likely to arise. Such an agreement is beneficial to have in place before starting a long-term relationship with a vendor/customer.

Saves Time

It provides a framework to quickly negotiate agreements. Therefore, the same terms need not be repetitively negotiated for deals that are very similar to each other.

Process fro  Memorandum Of Understanding:-

MOUs should contain the following provisions:

• a listing of the parties involved;
• a purpose;
• terms and conditions;
• appropriate bilateral signatures;
• duration of the agreement; and
• any special provisions as applicable.

An MOA details the obligations and commitments of the parties and allocates and minimizes each party’s risks. It can also be referred to as a contract and is legally binding. MOAs must contain, but are not limited to:

• a listing of the parties involved;
• a purpose/statement of work;
• terms and conditions;
• appropriate bilateral signatures;
• duration of agreement; and
• any payment terms or special provisions as applicable.

Refer to the guidelines from this site to create a draft of your agreement. Note: the more you deviate from the approved sections, the longer it will take for your agreement to be approved. Most agreements, especially MOAs that commit the University must be reviewed by the appropriate office (see home page). Agreements with external academic or research entities require additional review and standard language approved by the UA Office of the General Counsel prior to signature; an evaluation by Risk Management may also occur.

The following items MUST be contained in all agreements:

• Receiving campus (Fairbanks or rural campus)
• Type of agreement (MOA or MOU)
• Start date of agreement
• Termination date of agreement (this could also be the renewal date if automatic renewals are included)
• UAF unit/school
• External entity/agency (the other, non-UAF, party to the agreement)

The following items maybe included depending on the subject of the agreement:

• Country
• activity location.
• Modification date (for documents that are amending an existing agreement)
• UAF master agreement (yes if this is a global agreement that may spawn sub-agreements)

Approval process:

• If you are in an academic unit, once you get a draft agreement, you need approval from your department head and then from your dean. Once the dean has approved the agreement, it will go to the Provost’s Office. The Provost and the Chancellor will sign the agreement once they have reviewed it.
• If you are in a research institute, once you get a draft agreement, you need approval from your institute director. Once he/she has approved it, it will go the Vice Chancellor for Research’s (VCR) Office. The VCR and Chancellor will sign the agreement once they have reviewed it.
• If you are in another type of office, once you get a draft agreement, you need approval from your director. Once your director has approved it, approval will continue up the ladder to the Vice Chancellor responsible for your unit. The Vice Chancellor and Chancellor will sign it once they have reviewed it.

This process takes time so plan accordingly. If you are creating the agreement, you should share the draft agreement with the other entity before sending it to the Provost/VC level for signatures. If the agreement was initiated by the external entity then use your discretion as to whether substantial enough changes have been made that it needs to be reviewed again by the other entity before it is sent for signatures. The Provost/VC level will send the agreement to General Council if required.