Understanding and Writing Contracts and Memoranda of Agreement

1
Understanding and Writing Contracts and Memoranda
of Agreement
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What are contracts and memoranda of agreement?

• ContractIt is a statement of an agreement
  between or among two or more parties that
  involves an "exchange of value."
• Memorandum of agreementIt is not a legal
  document, but the signers are showing that they
  don't intend to try to enforce its terms.
• Gray areasIf one party takes a lossIf a
  particular exchange has become customary

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When might you use each document?

• Use a contract or subcontract
• Whenever money is involved.
• Situations involving a non-money exchange
• Use a memorandum of agreement
• To define a relationship between organizations
• To agree to affiliate in a particular way
• To agree to share something
• To agree to work together in specific ways

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How do you read and understand a contract?

• Reading a contract
• Read every word carefully
• Become familiar with standard clauses and
  phrasing
• Ask for clarification or help
• Be sure you agree with all the conditions of the
  contract before you sign it
• Don't be afraid to raise questions before you sign

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How do you read and understand a memorandum of
agreement?

• Read every word carefully
• Ask for clarification or help
• Be sure you agree with all the conditions of the
  memorandum of agreement before you sign it.
• Raise any questions before you sign

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How do you draft a contract?

• Explain who the parties to the contract are, and
  the time period that the contract covers
• Explain as specifically as possible every aspect
  of the contract what, who, how, when and where
• If there's money involved, explain the details of
  payment
• Explain any other obligations of each party
• Explain how the contractor's performance will be
  evaluated
• Explain the consequences if either party fails to
  deliver on what it has agreed to
• Explain the conditions under which the contract
  can be ended or "terminated "
• Explain the conditions under which the contract
  can be changed or "amended "
• When you've finished, show the contract to others
  to review your intentions and specifications
• Finally, give the contract to the contractor, and
  be prepared to negotiate some parts of it.

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How do you draft a memorandum of agreement?

• The more everything is spelled out, the less
  confusion about what you're agreeing to.
• Being specific helps to avoid misunderstandings,
  which can escalate into bad feelings and enmity
  where there was originally trust and
  collaboration.
• Clarity in an agreement provides an outline for
  your work or activity.
• A clear agreement reflects the clarity of
  everyone's expectations.