Is an MOI legally binding?

It depends on the language. If the MOI expresses clear mutual assent to binding terms, courts may enforce those provisions. To avoid uncertainty, label binding clauses explicitly and separate non-binding provisions.

Can the MOI be signed electronically?

Yes. Under the ESIGN Act (15 U.S.C. §7001) and state UETA statutes, electronic signatures are legally valid if intent, consent, attribution, and record retention are satisfied.

When should I notarize the MOI?

Notarization is rarely required for MOIs but can strengthen evidentiary weight or meet internal policy. Use remote online notarization where permitted if you need added authentication.

How do I amend or update the MOI?

Execute a written amendment that references the original MOI, is signed by authorized parties, and records the effective date. Track versions and retain prior signed copies for audit purposes.

How do I revoke or cancel an MOI?

Follow any termination clause in the MOI; absent such a clause, revoke by mutual written agreement. For unilateral withdrawal, confirm whether any binding obligations (e.g., exclusivity) survive termination.

How long should I retain signed MOIs?

Retain during the active transaction and for at least three years thereafter for tax or audit purposes; longer retention may be required for industry-specific records such as HIPAA (six years).

Memorandum of Intent

This template is fully customizable. Edit the text, fill out the fields, and send it for signature. Give it a try!

Memorandum of Intent

Memorandum Date:

RECITALS

WHEREAS, Party A: with principal address at intends to explore entering into a definitive agreement for the matters described below; and

WHEREAS, Party B: with principal address at desires to negotiate in good faith toward a potential business arrangement as further described herein.

NOW, THEREFORE, and intending to be legally bound only as expressly provided in the binding provisions below, the parties agree to the following terms of understanding.

SCOPE OF WORK

Description of Proposed Activities

PAYMENT TERMS

Compensation: Party A shall pay Party B a total fee of USD for the services described in the Scope of Work.

Payment Schedule

Late Payment: Any undisputed amount not paid by the due date shall accrue interest at or the maximum rate permitted by law, whichever is lower. In addition, the non-paying party shall be responsible for reasonable costs of collection, including attorneys' fees.

TERM AND TERMINATION

Term: This Memorandum shall commence on Start Date: and, unless earlier terminated in accordance with this section, shall continue until End Date: .

Termination for Cause: Either party may terminate this Memorandum upon written notice if the other party commits a material breach and fails to cure such breach within days after receipt of written notice specifying the breach.

Termination for Convenience: Either party may terminate this Memorandum for convenience upon providing days' prior written notice to the other party. Upon termination, the parties shall cooperate to wind down work and settle amounts due for services rendered through the effective date of termination.

CONFIDENTIALITY

Definition: "Confidential Information" means non-public information disclosed by one party to the other that is designated confidential or that reasonably should be understood to be confidential given the nature of the information and the circumstances of disclosure, including business plans, pricing, technical designs, trade secrets, and customer lists.

Obligations: Each receiving party shall (a) hold Confidential Information in confidence using at least the same degree of care it uses to protect its own confidential information but no less than reasonable care; (b) use Confidential Information solely for the purpose of evaluating and pursuing the transactions contemplated herein; and (c) not disclose Confidential Information to any third party except to employees, contractors, or advisors who have a need to know and are bound by confidentiality obligations at least as protective as those herein.

Exclusions and Duration: Confidential Information does not include information that is (i) publicly known through no breach of this Memorandum, (ii) rightfully received from a third party without confidentiality obligations, (iii) independently developed without use of the disclosing party's Confidential Information, or (iv) required to be disclosed by law or valid order of a court or regulatory authority. The obligations in this section shall survive termination of this Memorandum for a period of years.

BINDING EFFECT; INTENT

Except as to the provisions explicitly stated to be binding in this Memorandum (including Confidentiality, Payment Terms relating to undisputed invoices, and Governing Law), the parties acknowledge that this Memorandum is an expression of current intent and is not intended to create binding obligations to consummate the contemplated transaction. No party shall be bound to any definitive agreement unless and until a definitive agreement has been executed and delivered by the parties.

GOVERNING LAW

This Memorandum shall be governed by and construed in accordance with the laws of the State of without regard to conflicts of law principles. The parties agree that exclusive jurisdiction for disputes arising from this Memorandum shall lie in the state and federal courts located within that state.

ENTIRE AGREEMENT

This Memorandum constitutes the entire understanding between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous discussions, proposals, agreements, and communications, whether oral or written, except that any executed definitive agreements will supersede this Memorandum to the extent they are inconsistent.

MISCELLANEOUS PROVISIONS

Notices: Any notice required or permitted under this Memorandum shall be in writing and delivered to the addresses set forth above or to such other address as a party designates by written notice to the other.

Expenses: Each party shall bear its own costs and expenses in connection with the negotiation and preparation of definitive agreements, unless otherwise agreed in writing.

PARTY CONTACTS

Party A Primary Contact Party B Primary Contact

Party A Printed Name:

By:

Date:

Party B Printed Name:

By:

Date:

What a Memorandum of Intent Is and when it’s used

A Memorandum of Intent (MOI) is a written statement that records preliminary understanding between parties about the main terms of a planned transaction or collaboration. It typically covers the parties, purpose, key commercial terms, and any conditions precedent while reserving the right to negotiate a final, binding agreement. MOIs are commonly used in business acquisitions, real estate negotiations, joint ventures, and financings to align expectations, record exclusivity or confidentiality commitments, and outline next steps without creating full contract obligations. Language determines whether it is binding or non-binding.

Why prepare a clear Memorandum of Intent

A clearly drafted MOI reduces misunderstandings, documents essential deal points, and creates a framework for final agreements. It can preserve negotiating leverage, set timelines, protect confidential information, and make due diligence more efficient while clarifying which provisions are intended to bind the parties.

Step-by-step: completing a Memorandum of Intent

Follow a short, logical workflow to complete an MOI so parties share the same expectations and any binding commitments are explicit.

01

Draft core terms: List parties, transaction summary, price or consideration, and exclusivity provisions.
02

Clarify intent: State expressly which sections are binding and which are not.
03

Add conditions: Include due diligence, regulatory approvals, and financing contingencies.
04

Sign and date: Have authorized representatives sign and record the effective date.

Who typically prepares and signs an MOI

The MOI is completed by parties entering a negotiated transaction and their advisors to document preliminary terms.

Acquirers and sellers in M&A, to summarize deal economics and exclusivity windows.
Real estate buyers and sellers, to outline purchase terms before a formal purchase contract.
Joint venture partners and investors, to record contribution and governance basics.

Counsel or experienced deal managers usually draft or review the MOI to ensure clarity on which provisions are binding and to minimize future litigation risk.

Roles who must sign and why

Authorized Executive

An officer or manager with authority to bind the entity should sign. That signer’s role and title must be recorded to show attribution and to support enforceability if the MOI contains binding commitments.

Outside Counsel

A legal representative often reviews and initials key pages. Counsel involvement demonstrates negotiation intent, clarifies obligations, and can attest to the parties’ understanding of binding versus non-binding provisions.

Essential sections to include in a professional MOI

A useful MOI is concise but contains clear, labeled sections so readers can find binding terms and next steps quickly.

Parties

Identify each party by full legal name, entity type, jurisdiction of formation, and a contact person for notices and communications.

Transaction overview

Summarize the transaction scope, assets or equity involved, and the intended legal structure (asset sale, stock sale, contribution, license).

Commercial terms

State price, payment method, escrow arrangements, earn-outs, or other economic mechanics with enough detail to prevent ambiguity.

Conditions precedent

List required approvals, inspections, financing, and due diligence items that must be satisfied before a binding agreement.

Binding clauses

Explicitly label confidentiality, exclusivity, and governing law clauses as binding if that is the parties’ intent to avoid inadvertent enforceability disputes.

Next steps and timeline

Include deadlines for due diligence, signing a definitive agreement, and termination if milestones are unmet to keep the deal on track.

Required factual details to capture

Full legal name: Exact registered name

Entity type: Corporation, LLC, individual

Address: Street, city, state, ZIP

Contact person: Name, role, email

Effective date: MM/DD/YYYY

Governing law: Selected state

Where the completed MOI goes and who receives it

Routing an MOI promptly ensures each party moves forward on agreed timelines and that confidentiality or exclusivity periods are tracked.

Primary recipient: Named counterparty or business development lead
Legal counsel: Outside or in-house counsel for review
Finance team: Treasury or accounting for consideration checks
Deal repository: Centralized contract storage or data room

Configuring an online MOI workflow

Set up fields, signer order, and authentication so the eSigned MOI meets your organization’s governance and audit requirements.

Field	Configuration
Signature fields	Place for each signer; require date stamps
Order of signing	Specify sequential or parallel routing
Authentication	Email link, SMS code, or stronger KBA
Notifications	Automatic reminders and completion alerts

Digital signing and eSubmission options

Choose an eSignature workflow that captures signer intent, provides an audit trail, and meets any industry compliance requirements.

File formats: PDF, DOCX accepted
Integrations: CRM and storage connectors
Authentication: Email, SMS, or two-factor

Ensure the chosen platform supports retention, tamper-evident signed copies, and any required attestations for enforceability and future audits.

Typical eSignature vendor options for signing an MOI

Compare common plan attributes relevant to signing and storing a Memorandum of Intent. signNow appears first to show an example of a competitively priced option.

	signNow	DocuSign	Adobe Sign	PandaDoc	HelloSign
Starting Price	$8/user/mo	$15/user/mo	$14/user/mo	$19/user/mo	$15/user/mo
Free Trial	7-day free trial	Varies	Varies	Varies	Varies
Bulk Send	Yes (premium tier)	Yes	Yes	Yes	No
Audit Trail	Yes	Yes	Yes	Yes	Yes
HIPAA Compliant	Yes	Yes	Yes	No	No

Key legal and commercial risks to avoid

Unintended binding: Vague language can create enforceable obligations

Confidentiality breach: Inadequate NDA terms expose sensitive data

Tax consequences: Payment terms may trigger withholding obligations

Invalid signatures: Poor authentication weakens enforceability

Missed deadlines: Expired exclusivity or due diligence windows

Record retention: Failure to retain supports adverse inferences

Common mistakes when preparing an MOI

Using broad phrases like 'subject to agreement' without specifying which terms are binding creates legal uncertainty and may lead to disputes.
Failing to identify authorized signatories or using initials without full signatures can make enforcement and attribution difficult in later litigation.
Omitting clear timelines for exclusivity, due diligence, or closing allows one party to delay indefinitely and impedes deal momentum.
Neglecting confidentiality or IP assignment language when sensitive information is exchanged increases the risk of competitive or regulatory harm.

Practical tips for accurate, efficient MOI completion

Adopt a concise template, label binding clauses, and use electronic workflows to reduce errors while preserving auditability.

Use explicit intent language

State clearly which clauses are binding and which are not. For example, begin binding sections with 'The parties agree that the following provisions are binding...' to avoid interpretive disputes.

Standardize signature blocks

Require printed name, title, and date below signatures. If an entity is signing, include the signer’s authority (e.g., 'By: Jane Doe, Chief Executive Officer') to establish authority.

Preserve audit trails

When using eSignature, ensure the platform provides timestamps, IP logs, and a certificate of completion to support attribution and admissibility.

Coordinate counsel review

Have counsel verify any governance, tax, or industry-specific requirements before finalizing to reduce downstream legal costs.

Frequently asked questions about Memoranda of Intent

Answers to common questions focus on enforceability, signature methods, notarization, amendment, and storage practices for MOIs.

Need help? Contact support

Is an MOI legally binding?
It depends on the language. If the MOI expresses clear mutual assent to binding terms, courts may enforce those provisions. To avoid uncertainty, label binding clauses explicitly and separate non-binding provisions.
Can the MOI be signed electronically?
Yes. Under the ESIGN Act (15 U.S.C. §7001) and state UETA statutes, electronic signatures are legally valid if intent, consent, attribution, and record retention are satisfied.
When should I notarize the MOI?
Notarization is rarely required for MOIs but can strengthen evidentiary weight or meet internal policy. Use remote online notarization where permitted if you need added authentication.
How do I amend or update the MOI?
Execute a written amendment that references the original MOI, is signed by authorized parties, and records the effective date. Track versions and retain prior signed copies for audit purposes.
How do I revoke or cancel an MOI?
Follow any termination clause in the MOI; absent such a clause, revoke by mutual written agreement. For unilateral withdrawal, confirm whether any binding obligations (e.g., exclusivity) survive termination.
How long should I retain signed MOIs?
Retain during the active transaction and for at least three years thereafter for tax or audit purposes; longer retention may be required for industry-specific records such as HIPAA (six years).

be ready to get more

Join over 28 million airSlate SignNow users

Sign Now