How to Create a Valid Memorandum of Understanding in Dubai

In comparison to formal agreements such as contracts, a Memorandum of Understanding (MOU) form is considered as less formal. However, it’s also more formal than mere handshakes. Among the common instances wherein it’s critical to have an MOU form in Dubai/UAE are the following:

  • You are running a business in UAE and you plan on partnering or merging with another business;
  • Another business approached you to work with them;
  • You’re the owner of a small business in Dubai or anywhere in UAE and you frequently partner with professionals and businesses;
  • Your company and a separate business will work on a particular project together;
  • You are entrusting certain processes to staff members

May be you are interested in reading: Why Object Clause Is Important In A UAE Memorandum Of Association

Steps to Create a Memorandum of Understanding in Dubai

Step 1: Find out if you have to create an agreement from scratch

If you do, you also need to determine the type of agreement that is appropriate for your situation and specific needs. Ask the other parties involved with a transaction if they already have an existing agreement. If there isn’t, move on to the next step.

If there is already an agreement ready for you to enter:

  • Determine whether the activities proposed fall under your existing agreement with other parties, either written or verbal. Otherwise, you need to make sure an existing agreement is valid and not expired.
  • Should the proposed activities in the memorandum of understanding fall under an existing agreement you have with other parties but it’s already expired, then have the MOU form amended or renewed.

Step 2: Create the introduction

The introduction section will help the parties involved understand the contents of the memorandum of understanding. It will describe the need for the agreement, which agencies are involved, and why it’s necessary for relevant parties to work together. This section has to be simple but with an explanation of what the agreement is and why it’s necessary. It doesn’t have to include all details regarding past efforts or state how parties reached the level of understanding or agreement.

Questions to help create the introduction of the MOU form:

  • For what resource or capability is the memorandum of understanding being created?
  • Who are participating in the agreement? Include agencies such as public safety agencies, any relevant governmental body and/or private services.
  • What are the agreements that are set forth with the MOU?
  • Why is the agreement necessary?

Also find more details about: Memorandum Of Association Objects Clause For UAE Real Estate And Construction

Step 3: State the purpose of the MOU

The purpose section has to be concise, but clearly discusses the intention for a new proposed capability which makes an MOU form necessary. The section should also explain how the involved parties are going to use a new capability, including the circumstances in which it applies.

What capability does your MOU form apply? Consider the following when answering the question:

  • What’s the intended level for command?
  • How is it going to be used?
  • When can it be used?

Step 4: Explain the scope of the MOU form

The scope section should list the parties and jurisdictions relevant to the agreement. Describe as well their relationship with each other. You can also discuss the level of government, command, end users, data, etc.

In this section, you can add the descriptions for technical and operational terms which are associated with a resource or capability for which your MOU is written. The definitions will help prevent both uncertainty and confusion.

You should know: Process Of Amending Memorandum And Articles Of Association UAE

Step 5: Expound the policy

The policy section of a Memorandum of Understanding has to briefly describe the circumstances in which a capability may be used. It is in this section where you also mention activation, authorized use, and all other circumstances. Outline as well the obligations of the agreement.

A great example is a memorandum of understanding on the sharing of an enhanced capability. The obligations can include user requirements, exercises, training, awareness, and the responsible parties that must ensure training.

The questions that will help you with this section are as follows:

  • When can a resource or capability be considered as for use?
  • Are there specific operating procedures that are associated with a resource or capability?
  • Can the procedures be referenced?
  • Who has the capability to authorize the use of a resource or capability?
  • Are there any additional requirements?
  • What are the requirements that are associated with participating on this MOU form?
  • Are there financial obligations which must be considered by a relevant party?
  • Are there maintenance requirements that are associated with participating on this MOU? If so, what are they?
  • Who will maintain requirements e.g. equipment?
  • Who owns the relevant licenses?
  • Is there a specific individual, agency or jurisdiction responsible for the maintenance?

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