Reviewing a memorandum of understanding

A memorandum of understanding records an intention to work together before the parties are ready to sign a contract. Whether it binds depends on what it says and what the parties do, not on its title, and a memorandum that sets out obligations, exclusivity and payment terms can be a contract. I review the memorandum from one party's side and return it marked up with a written explanation of what it commits you to, what binds, and what belongs in a proper agreement instead, for a fixed fee of £495 in three working days.

Who this is for

Businesses in England and Wales asked to sign a memorandum of understanding with a prospective partner, supplier, customer, university, local authority, NHS body or charity, whether as a precursor to a contract, a framework for cooperation, or a document the other side wants to announce. The parties are organisations; public bodies bring transparency obligations with them.

What to look for in a memorandum of understanding

Binding or not, and the test the courts apply

A memorandum binds if it contains the elements of a contract, an agreement on essential terms, an intention to create legal relations and consideration, whatever it is called, and in RTS Flexible Systems Ltd v Molkerei Alois Muller GmbH [2010] UKSC 14 the Supreme Court found a contract where the parties had performed on the terms of an unsigned document. The review checks whether the memorandum is intended to bind, asks for a clear statement either way, and, where some provisions are meant to bind (confidentiality, exclusivity, costs, governing law), separates them from the statements of intention so that neither party can argue the whole document is a contract.

What it commits you to, in words that do not look like commitments

Memoranda use 'will', 'shall use reasonable endeavours', 'intends' and 'agrees in principle' interchangeably, and the words matter. A statement that a party 'will' provide staff, premises, data or funding is an obligation if the document binds. The review reads each statement for what it commits the party to, replaces obligations that are not intended with statements of intention, and makes the obligations that are intended precise: what, by when, at whose cost.

Exclusivity and dealing with others

A memorandum that says the parties will work together on a project can be read as a promise not to work with anyone else on it. The review checks for exclusivity, express or implied, asks for it to be stated one way or the other, and where exclusivity is intended, limits it to a defined period and scope. An agreement to negotiate in good faith is not enforceable under English law, so a memorandum that promises only that gives neither party anything to enforce.

Confidentiality, intellectual property and the material you share

Parties exchange plans, data and know-how under a memorandum before there is any contract to protect them. The review checks that the confidentiality clause binds, defines the information, limits use to the stated purpose and survives the memorandum, so that the disclosing party has taken the reasonable steps the Trade Secrets (Enforcement, etc.) Regulations 2018 require. It also checks that each party keeps its own intellectual property, that nothing in the memorandum licenses or assigns it, and that any material created jointly during the memorandum is dealt with, because joint authors cannot exploit a work without each other's consent under section 10 of the Copyright, Designs and Patents Act 1988.

Public bodies, publicity and freedom of information

Where the other party is a local authority, NHS body, university or other public authority, the memorandum and the information exchanged under it may be disclosable under the Freedom of Information Act 2000, and the public body may want to publish the memorandum. The review asks for a consultation obligation before disclosure and for the exemptions for confidential and commercially sensitive information to be applied, and checks the publicity clause so that neither party may announce the arrangement or use the other's name and marks, which needs a written licence under section 28 of the Trade Marks Act 1994, without consent.

Term, termination, costs and the partnership question

The memorandum should say how long it lasts, that either party may end it on notice, that each party bears its own costs, and that nothing in it creates a partnership, since two businesses carrying on a business in common with a view of profit are partners under section 1 of the Partnership Act 1890 regardless of the label. The review checks those provisions and identifies the point at which the parties need a contract: when money changes hands, when work starts, or when one party relies on the other.

What it costs

Standard review, £495. Marked-up document and a written explanation of the changes. Three working days.

Buying online forms the engagement on payment. The scope is what the contract review page describes, you accept the Terms of Service at checkout, and I email you within four working hours to get started. If you would rather ask something first, email me.

What you get

• Your own contract returned with my amendments as tracked changes, plus a clean version with every change accepted, ready to send to the other side
• Comments in the document where a point needs explaining
• A written explanation of what I have changed and why, by email or as an attachment if it is lengthy, marking the points I would hold firm on and the ones that are negotiable
• A view on what is normal market practice and what is the other side pushing their luck
• One round of follow-up questions by email, included

What is not included

• Negotiating directly with the other side, which I quote separately once I know who is on the other side. Where the other side is willing to share a live document, I can work in that document directly
• Drafting a replacement contract from scratch
• Advice on the law of any jurisdiction other than England and Wales
• Tax, accounting or regulatory advice
• Disputes about a contract that is already signed

Questions I am often asked

The other side says the MoU is just a formality and not binding. Should we sign it?

Only once you know which parts bind and what the rest commits you to in practice. The review identifies the clauses that are enforceable, the statements that read as obligations, and what the other side can hold you to, and rewrites it so that it says what both parties mean.

We have started working together under the MoU. Do we now have a contract?

You may. Performing on the terms of a document can create a contract even where the document says it is not binding. The review checks what has been done, what terms would be implied, and recommends a short binding agreement for the work under way.

The council wants to publish the MoU. Can we stop that?

Not entirely, because a public body may have to disclose it under the Freedom of Information Act 2000. The review asks for a consultation obligation before disclosure, for your commercially sensitive information to be identified, and for the exemptions to be applied to it.

Related guidance and services

• Contract review, £495, the service this page describes
• Terms and conditions drafting, £995
• Reviewing heads of terms before a deal
• Reviewing a collaboration agreement with another business

This page is general guidance for businesses in England and Wales, not advice on your own circumstances. Last reviewed: September 2026. Email geoffrey@caesar.co.uk.