Memorandum of Understanding: Services Agreement

This Memorandum of Understanding (Services Agreement) (“MOU”) is designed to be signed as a preliminary non-binding heads of terms document. That MOU would then be followed by a binding detailed, definitive Services Agreement under which the supplier of services agrees to provide its services to a business client.

Using an MOU such as this should help prevent misunderstandings. It should also aid the process of focusing on and agreeing all of the important legal and commercial points that need to be dealt with by the definitive, binding, Services Agreement which is to follow the MOU.

This template contains numerous optional clauses (and alternative provisions within those clauses) from which you can select as appropriate. These include the option to bar the business client from buying competing services from a third party (i.e requiring purchase from the supplier on an exclusive basis) and the option to bar the supplier from supplying similar services to a third party (i.e. requiring supply to the business client on an exclusive basis). 

This detailed menu of heads of terms can serve as a convenient checklist to assist you to identify, negotiate and record in the MOU all of the points that should be covered by the parties in a full agreement. Once both parties have agreed and signed the MOU, you can pass it to your legal advisers as your instructions to them. Their task of drafting a definitive binding Services Agreement should be quicker and easier if they have such a detailed MOU to work from, and hopefully that will be reflected in lower legal fees.

Before using this MOU template, we recommend that you read the Guidance Notes on Heads of Terms, Memoranda of Understanding, Letters of Intent and Term Sheets in the Heads of Terms and Contract Formation subfolder. Those notes deal with a number of important general issues relating to all Memoranda of Understanding, Heads of Terms, Letters of Intent, Term Sheets and similar pre-contract documents.

We have also included this MOU in the Heads of Terms and Contract Formation subfolder, alongside various other types of template MOUs.

This document is in open format. Either enter the requisite details in the highlighted fields or adjust the wording to suit your purposes.

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