Similar to a contract, a memorandum of understanding is an agreement between two or more parties. However, unlike a contract, a letter of intent does not have to contain legally enforceable promises. Although memoranda of understanding are rarely seen in the multilateral sphere, transnational air transport agreements are in fact memoranda of understanding. Most of the contracts that not-for-profit organizations are required to sign come from funders. You probably had no influence on a funder`s contract. If the funder is a branch of government or a public institution, the contract is likely to be standard, long, printed in very small print and in full legal language (“legal jargon” is the term often used for the English version of this lawyer). You may be intimidated at first, but if you follow a few simple rules, you can make sure you don`t apologize when signing a contract later. Specify the scope of the services, products or other exchanges, who should be involved, how it should be performed, when to do so (the contract schedule) and where it will take place if any. Determine exactly what is expected of the contractor. For example, if a service is involved, the description of the services may include the following: When you`re done, show the contract to others to make sure it`s accurate.

Even if no money changes hands, it can be important to have a contract when two organizations work closely together and the success of their efforts depends on the smooth running of the exchange. For example, if everyone provides services to each other`s participants, or if space is used in exchange for services, a contract can help each organization meet its obligations. A participant has been cleaning the offices of a nonprofit health clinic every month for over a year and receives a regular amount for it – say $100.00 each time. Then, unexpectedly, he cleans the office for a month, and the clinic director refuses to pay, saying she didn`t ask him to clean. Under the law, he could probably argue that the clinic had created a custom to pay him for that service and that a contract was implicit in that custom. If the judge agreed, the clinic would have to pay him the $100.00 for the cleaning he had already done. (They wouldn`t have to continue with his services, but they would have to let him know they didn`t want him to clean up anymore.) Even if the amount is small, it is important to have a contract instead of a memorandum of understanding or no document at all. It is reasonable to assume that more professional partnerships, collaborations, and other organizational and individual relationships are ruined by money problems than by the following ten causes combined. The reason for this is often that the parties have different interpretations of what is expected, or that one party simply ignores an understanding between the two that the other thought has been set in stone.

Key elements that can make a letter of intent legally binding include: it can be as small a problem as changing a budget item (for which you may already have a procedure in the contract – see above) or as big as changing the entire content of the activity covered by the contract. In general, such changes should require the consent of both parties, and some negotiations should probably be incorporated. In addition, a non-legally binding letter of intent can be useful to serve as an agreement between the parties. To create a MEMORANDUM of Understanding, both (or all) parties usually first prepare their own MOU documents, which address the following: In the areas of health, human services and community work, outsourcing is common. A subcontract is a contract that is used when an organization or person that already has a contract for the provision of services or goods entrusts another person with performing part of the work under that contract. For example, an organization that has a contract to conduct a comprehensive vocational training program could outsource to an adult literacy program to teach participants basic skills, or to a vocational school to offer certain types of vocational training. Another essential feature of a contract is that a contract should be enforceable in court if a party violates the contract or a contractual term. In special circumstances, a court may order a party to keep its promise. Most of the time, however, a court simply orders the party who is violating the law to pay the other party enough money to bring the non-offending party back to the same situation as it would have been if it had fulfilled the promises set out in the contract. If you`re working with other groups, hiring consultants, or hiring organizations to provide services to you or your target audience, you`ll often find it helpful to “put it in writing.” This section will help you read, understand and draft contracts and memoranda of understanding, the two types of documents that most organizations need in their relationships with others. If you have trouble understanding part of a contract, ask for clarification or help.

Before preparing the document, the parties drafting a letter of intent must enter into an agreement that all parties accept. All parties concerned should have clear information on the important positions of each party. This allows the parties to create a comprehensive and effective Memorandum of Understanding document. You can see this type of document referenced by a few different names. The common names of a letter of intent are: “In this document, the Portersburgh Youth Development Initiative enters into contracts with the Portersburgh Youth Center, Inc. . . .