Non-Binding Commitment

While it is understood that the Memorandum of Understanding (MOU) is a non-binding document, it doesn’t preclude the need to be comprehensive with an emphasis on simplicity and clarity. Ultimately, the better the Memorandum of Understanding, the more likely this document will evolve into the framework of the long-term contract. At this stage of the partnership process, many unknowns may still exist. This study concluded that many of the participants’ MOUs included assumptions due to timing. These assumptions took into consideration anticipated benchmarks that were necessary for the project to move forward. This did not preclude the MOU from being activated prior to reaching the various benchmarks.

For example, the success of a future bond election, which would allow a municipality to participate financially in the partnership, may be a benchmark that is referenced in the MOU as a requirement that is anticipated but not yet achieved. The essential elements that will be included in the contract should be included in the MOU as if the project will move forward—not in detail, but in simplistic clarity—and should define each partner’s responsibilities, financial investment, asset ownership, term and community benefit.

Click on this link to download a sample MOU Letter of Intent.