From The Vault: MOUs: What They Are And When To Use ‘Em

[Occasionally, we like to revisit posts from days gone by that either (1) are always relevant, or (2) are the subject of recent questions received by our office.  In today’s From The Vault, we look at the Memorandum of Understanding, an agreement being used with increasing frequency for research projects.]

Originally published August 1, 2012

A “contract” is a legally binding agreement that obligates parties to do or not do something.  It can be verbal or written, short or long, formal or informal, general or detailed.  It can fall under a variety of names (agreement, purchase order, letter of intent / commitment / authorization, award, grant) and a spectrum of possible remedies.  Regardless of its name, though, a contract should, at a minimum, identify the parties, the subject, and the “consideration” (motive or inducement); have mutual obligations; and evidence mutual agreement.

A Memorandum of Understanding (“MOU”) is a specific type of contract.  It is more than a handshake – it is a (relatively) brief written statement outlining the terms of the parties’ agreement or understanding of how they will proceed on a particular project or goal.  As a rule of thumb, if money is involved, a MOU is probably not the right vehicle.  At JHSPH, when money is involved, a formal, full-blown, detailed contract is developed to document the transaction and track and account for the funds.

A MOU is the agreement we use when no transfer of funds is involved but parties are doing such things as:

  • Collaborating on developing ideas and proposals
  • Pledging their resources to foster or facilitate knowledge or programs by co-hosting a conference or exchanging graduate students
  • Hosting another party’s intern or volunteer at a field project
  • Developing courses for another university or allowing another institution to access JHSPH classes or resources or
  • The parties, at the request of a mutual sponsor, are pledging funds from their respective projects/awards in order to collaborate on a task or undertaking for that sponsor.

The MOU functions more as a “gentleman’s agreement” than a structured research contract, as it is much more general in terms and obligations and the risk for a party’s failure to cooperate/perform is more to their reputation than to their wallet.  But make no mistake:  It is still a contract, and if, for example, it contains an arbitration provision, the losing party may be ordered to perform.

JHU takes great pride in its name and reputation, and thus we take MOUs very seriously.  They are viewed as legally binding contracts and reviewed by ORA to be sure they contain the appropriate provisions to protect the School in its undertakings, and ensure the parties’ understanding of their respective responsibilities and right.  Note also that, if the contemplated efforts involve development of courses or exchanges of academic resources, it also requires review and approval by the Sr. Associate Dean for Academic Affairs.