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Memorandum of understanding template (Word & PDF)
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For two businesses, and their counsel, recording what is agreed before a contract. It covers the purpose, which clauses bind, confidentiality and the term. It does not incorporate a company or settle a dispute.
Sources: 6 official sourcesNot legal advice
What this template includes
Write which clauses bind
A free bilingual memorandum of understanding for two parties in the GCC. It does not decide, as a rule of law, which sentences bind. The parties write that choice into the document. A hire uses the employment contract template. A commercial or civil release uses the settlement agreement template. A filed case uses the statement of claim template.
Binding and non-binding, as a drafting choice
Article numbers are not pasted into the template clauses. The Saudi answer on whether the memorandum binds is in the questions below: formation, essential terms, and a promise to contract.[6] In the UAE the Civil Transactions Law is Federal Decree-Law No. 25 of 2025, in force on 1 June 2026. Its formation articles are under review, so this template states no article numbers from it.[2][3]
- In clause 3, name the clauses the parties intend to perform as obligations, and name the clauses that only record intent.
- If confidentiality has to bind on its own, use the non-disclosure agreement or keep a short confidentiality clause and mark it binding.
- If the parties are incorporating a company or sharing profits as partners, this memorandum is the wrong instrument. Use the two-party partnership agreement template or the memorandum of association template.
- If the text is a hire, stop and use the employment contract template. If it ends a dispute, use the settlement agreement template. If a claim will be filed, use the statement of claim template.
The template
Memorandum of understanding
A record of what two parties in the GCC intend to discuss or to do next. Clause 3 says which clauses they intend to perform and which only record intent. It does not incorporate a company, hire anyone, or settle a dispute. Replace every [placeholder] and delete the option that does not apply.
This memorandum is made on [date] between [Party A: name, ID/CR, address] and [Party B: name, ID/CR, address] (each a “Party”).
Drafting note
Use the name on the ID or in the commercial register.
The Parties are discussing [subject]. This clause records that discussion. It is an obligation only if clause 3 says so.
The Parties intend to be obliged only by the clauses marked “binding” in Annex 1, and only for the period written in those clauses. Every other clause records intent. It is not an offer that the other Party can accept by silence, and it does not require either Party to close the transaction.
A clause marked “binding” is performed as written. A clause marked “intent only” may be stopped, changed, or never done, and neither Party owes damages for that choice.
Option. For [●] months after this memorandum ends, each Party keeps confidential the non-public information the other shares for this discussion, and uses it only for that discussion. A Party may disclose it to a lawyer or an accountant who needs it, or where the law requires. Delete this clause if Annex 1 does not mark it binding. If the Parties need a standalone confidentiality contract, use the non-disclosure agreement.
Drafting note
If the information is personal data, the Saudi PDPL or the UAE PDPL may apply. This clause does not restate them.[4][5] See the GCC data-protection guide.
Option. For [●] days from the date of this memorandum, neither Party will negotiate the same subject with a third party. Delete this clause if Annex 1 does not mark it binding. Do not leave the number of days blank.
Each Party pays its own costs of this memorandum and of the discussion, unless Annex 1 marks a different split as binding: [●].
This memorandum ends on [date], or earlier when either Party writes to the other that the discussion has stopped. A clause marked binding in Annex 1 survives only for the period that clause states.
The clauses marked binding are governed by the laws of [country]. A dispute about those clauses goes to [the courts of ● / arbitration under ●].
- (a) This memorandum does not incorporate a company and does not share profits. Use the partnership agreement template or the memorandum of association template for that.
- (b) It does not hire anyone. Use the employment contract template.
- (c) It does not release a claim. Use the settlement agreement template. It does not commence proceedings. Use the statement of claim template.
Party A: name [●] · capacity [●] · signature [●] · date [●]
Party B: name [●] · capacity [●] · signature [●] · date [●]
Drafting note
Name the forum. For arbitration see arbitration.
Annex 1. Binding and non-binding checklist
Mark one status in the last column. Do not leave a row blank and do not mark both.
| Clause | Starting point in this template | Status the parties write |
|---|---|---|
| 2. Purpose | Intent, unless rewritten as an obligation | [binding / intent only] |
| 4. Confidentiality | Binding only if this row says so | [binding / intent only / delete] |
| 5. Exclusivity | Binding only for the days written in the clause | [binding / intent only / delete] |
| 6. Costs | Binding only if this row says so | [binding / intent only] |
| 7. Term | Binding only if this row says so | [binding / intent only] |
| 8. Governing law and forum | Binding only if this row says so | [binding / intent only] |
Checklist for counsel
Read each row and mark the clause in the memorandum. A blank row is an open point, not a silent default.
- Purpose (clause 2): a statement of intent, unless the parties rewrite it as an obligation.
- Confidentiality, exclusivity, costs, term, and governing law: binding only if clause 3 says so, and only for the period written there.
- Personal data, if any is shared, follows the Saudi PDPL or the UAE PDPL. This memorandum does not restate those laws.[4][5]
- Do not leave “binding” and “non-binding” both ticked for the same clause.