Memorandum of Understanding (MOU)

An MOU is used:

• to demonstrate that the parties are entering into a relationship that is likely to result in a collaborative arrangement; or
• to establish principles or strategies for dealing with common issues.

An MOU may lead to a legally binding agreement between the same parties if the relationship results in specific collaborative projects or other activities involving undertakings by both parties. In this regard, MOUs can be useful as a starting point for contract negotiations.

An MOU is not a suitable format for legally binding relationships. These include arrangements that involve:

• the payment of fees;
• employment or engagement of staff;
• intellectual property rights;
• confidentiality;
• indemnities; or
• other matters involving undertakings by the parties.

Drafting MOUs

It is recommended that the ECU International template is used for both international MOUs and those between ECU and another party within Australia.

The University Lawyer should be consulted if the template is considered unsuitable and it is proposed to:

• use the template with substantial changes;
• draft an MOU without the use of the template; or
• use an MOU provided by another party.

As a minimum, MOUs should state that they are not intended to create legal relations.

If an MOU is not appropriate, a formal agreement may be needed. This need not necessarily be a lengthy or legalistic document. The University Lawyer can advise on the most appropriate form of MOU or agreement in the circumstances.

Signing MOUs

MOUs must be forwarded for signing by the Vice-Chancellor.

Please provide two copies of the final document to the Legal Services Office using the briefing format provided.

While MOUs are chiefly of symbolic value and either party can walk away from the arrangement at any time, this does not detract from their significance in establishing relationships with other organisations.

Caution!

Organisations may favour an MOU when they want to obtain (and perhaps give) commitments (for example regarding intellectual property rights), but they consider the activity to be relatively low risk and want to avoid the hassle of a formal agreement.

MOUs are rarely appropriate in these cases, even though there may be no payment involved.

In Summary

• MOUs are not appropriate if the parties are making commitments or undertaking obligations.
• The MOU template should be used where possible.
• If the template is not suitable, staff should contact the University Lawyer for advice on the content and form (MOU or agreement).
• MOUs must be signed by the Vice-Chancellor.