The parties should include any preferences they would like to have included in the agreement, as well as any items they consider to be non-negotiable. Ways in which they believe the other stakeholders will benefit from the memorandum of understanding. Any areas in which they are unable to compromise.This is done by having each party draft their own version of the memorandum, which should include the following details: The first step in creating an MOU between two construction companies is to begin negotiating the terms of the agreement.How Does an MOU Between Two Construction Companies Work?Īn MOU between two construction companies typically looks like this: You may see a memorandum of understanding referred to by a variety of different names, including: Other Names for Memorandum of Understanding In this case, the MOU will be a one or two-page document that outlines the general terms of the agreement, allowing the parties to determine the specific details at a later date. Often, if the parties are on a tight timeline, a memorandum of understanding may be used as a type of placeholder agreement. What Is MOU in Construction?Īn MOU between two construction companies is a preliminary document used to note the approach of the granting of a contract to a party.Īn MOU is typically drawn up between a general contractor and subcontractor or a project owner.Īn MOU between two construction companies is frequently used to begin the relationship and set the tone between contractors before the issuing of a formal contract. Automate all the necessary documents in a payment applicationĬonsider Flexbase your all-in-one construction invoice software.Our platform is easy to navigate and completely automates the entire billing process.įlexbase’s goal is to reduce human error and accelerate your payment process. Let Flexbase help evaluate any contractual agreements you might make with another construction company.įlexbase is an app designed specifically for construction companies just like yours. Flexbase Auto-Generates Your Forms and Houses All of Your Documents in One Place We’re going to look at what an MOU is, whether it’s legally binding, how to use one in construction, and what needs to be included in the agreement. It’s used prior to creating a construction contract, and creates an atmosphere of “good faith,” paving the way for the future working relationship.īut have you ever wondered what other industries use an MOU and if it is legally binding? This MOA may be terminated by mutual agreement of the parties, and shall automatically terminate upon completion of all responsibilities as stated herein, unless otherwise amended.You know the basics about a memorandum of understanding. This MOA may be amended from time to time by mutual agreement of the parties in a written modification signed by both parties.Ĥ. It is the intention of the parties that, where fault is determined to have been contributory, principles of comparative fault will be applied.Ģ.Each party, at its sole cost and expense, shall carry insurance or self insure to cover its activities in connection with this MOA, and obtain, keep in force and maintain, insurance or equivalent programs of self-insurance, for general liability, workers compensation and business automobile liability adequate to cover its potential liabilities hereunder.ģ. Each party agrees to indemnify, defend and hold harmless the other to the fullest extent permitted by law from and against any and all demands, claims, actions, liabilities, losses, damages, and costs, including reasonable attorney’s fees, arising out of or resulting from the indemnifying party’s acts or omissions related to its participation under this Memorandum of Agreement, and each party shall bear the proportionate cost of any damages attributable to the fault of such party, its officers, agents, employees and independent contractors. Each party takes legal and financial responsibility for the actions of its respective employees, officers, agents, representatives and volunteers. It is mutually understood and agreed by and between the parties that:ġ.
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