Even if the amount is small, it is important to have a treaty rather than a memorandum of understanding or no document at all. It is reasonable to assume that more professional partnerships, collaborations and other organizational and individual relationships are ruined by money issues than by the next ten cases. The reason is often that the parties have different interpretations of what is expected, or that one party simply ignores the agreement between the two, that the other thought has been set in stone. The biggest difference between a contract and a Memorandum of Understanding is that a contract is a legal document and is enforceable in court, whereas an agreement is neither nor an agreement. We will look at each person one after the other, and we will also look at places where the differences between them are blurring. The objective of a Memorandum of Understanding could be to show the goodwill of both parties or to help them keep an overview of what they have agreed. The agreement can help to clarify the relationship between two organisations and to clarify the services for which each is responsible in the Community. The process often begins with each party actually developing its own best-case scenario agreement. It considers its ideal or preferred outcome, what it believes it offers to other parties and what points on its side may not be negotiable. This is the starting position of each party for the negotiations. A contract may or may not be written, although a written contract is clearer and much easier to implement than an oral contract, because a written document facilitates proof of the existence of a contract. It is not necessary to characterize it as a contract if it is clear that both parties intend to have a formal document and that it is a reflection.
It can be extremely simple as long as the intent is clear. (For $500.00, Fred Smith will paint the exterior of John Jones` barn with all the coverings, window wings, doors and window and door frames and edges with two red varnishes.) A Memorandum of Understanding is not a legal document and is not applicable in court. In most cases, by calling a memorandum of understanding, the signatories show that they do not intend to enforce their conditions.