Sunday, February 17, 2013

Memorandum of Understanding Sample

DRAFT: Memorandum of Understanding

This Memorandum of Understanding (“MOU”) has been entered into on this the ____ day of____________2013 (the “Effective Date”)

by and between

1.      ____________a company incorporated under the laws of  [name of the emirate/DAFZA/JAFZA/RAKIA] acting through its [Director] duly authorised in this behalf by a Board Resolution dated [ ] (“ABC”, which expression shall be deemed to mean and include its successors in interest and permitted assigns), of the first part.


2.      [ ], a company incorporated under the laws of the State of Singapore, having its principal place of business, acting through its [ ], Mr. ____________, duly authorised in this behalf by a Board Resolution dated [ ] (hereinafter referred to as ‘XYZ’ which expression shall unless repugnant to the context or meaning thereof shall mean and include its subsidiaries, successors and assigns), of the other part.

(ABC and XYZ are hereinafter collectively referred to as the “Parties,” and singularly as a “Party,” as the case may be).

WHEREAS ABC is engaged in the business of, inter alia, [],

AND WHEREAS XYZ is in the business of manufacturing and distributing [  ] and other items (“Products”) all around the world,

AND WHEREAS based on the representations and warranties made by XYZ, ABC has requested XYZ to work with ABC to explore the possibility of opening outlets offering Products in Pakistan in joint collaboration between the two concerns.

Now therefore the Parties agree as under:

1.      Scope of MOU

1.1.            The term of the MOU shall be six (06) months commencing from the effective date.

1.2.            This MOU shall renew automatically for additional periods of one (01) month unless either Party gives written notice to the other, prior to the expiration of the MOU, stating that it does not wish this MOU to renew, or till the negotiation of a franchise agreement (“Franchise Agreement”) between XYZ and ABC.

1.3.            The terms of this MOU shall be subject to the negotiation of the Franchise Agreement between XYZ and ABC.

1.4.            This MOU is applicable only to the entire territory of Pakistan.

2.      Nature of RIGHTS

XYZ shall grant ABC [exclusive] rights to distribute its products subject to the terms and agreements of a franchise agreement to be negotiated by both parties in due course of this arrangement.


3.1.   XYZ and ABC will jointly formulate a mutually agreed upon business plan as a first step in this arrangement.

3.2.   Subject to the aforesaid, XYZ and ABC shall negotiate the Franchise Agreement for the provision of Products in Pakistan.

3.3.   The broad framework for the Franchise Agreement to be negotiated between ABC and XYZ shall be as under:

3.3.1.      XYZ shall provide ABC with the Products as required by ABC which shall decide what Products are to be sold in Pakistan in its absolute discretion.

3.3.2.     XYZ agrees, acknowledges and undertakes that the franchise fee, if any, will not exceed ++++++Singapore Dollars one-time payment only.

3.3.3.     [other terms ]


4.1.            This MOU may only be terminated prior to its expiration by ABC exclusively by advance notice in writing of fifteen (15) days prior to such envisaged date of termination, with or without cause.

4.2.            This MOU shall stand automatically terminated and succeeded by the Franchise Agreement upon successful negotiation of the same.


5.1.            This MOU shall be governed by and construed in accordance with the substantive laws of England and Wales without any regard for the conflict of laws provisions contained therein.

5.2.            Any and all disputes or controversies arising out of or in connection with the interpretation, performance or non performance, or termination of this MOU, shall be finally settled by arbitration conducted in accordance with the International Chamber of Commerce (“ICC”) Rules of Arbitration. The place of the arbitration shall be Kuala Lumpur, Malaysia, and proceedings shall be conducted in the English language. The award shall be final and conclusive and judgment thereon may be entered in any court having jurisdiction for its enforcement.


6.1.            All notices required or contemplated under this MOU and any correspondence shall be given in writing and by hand delivery, registered mail, courier, fax or email and shall be addressed:

If to ABC





If to XYZ





6.2.            Any notice required or permitted herein may be hand delivered, cabled, mailed, couriered, faxed or emailed properly addressed to the Party to be notified at the address set forth above or at the last known address given by such Party to the Party, and shall be deemed delivered when so transmitted.

6.3.            Each Party will hold in confidence the terms of the MOU and will not disclose publish or make copies of any such confidential information without the written consent of the Party to which the information relates, unless required by law to do so.

6.4.            Neither Party shall have the right to assign its rights and obligations under this MOU without the prior written consent of the other Party hereto.

6.5.            The inability or the omission of ABC in insisting on the performance of any particular obligation on part of XYZ shall not amount to a waiver thereof or of any other obligation of XYZ under this MOU.

6.6.            Any clause herein which is in fundamental conflict with the governing law shall be deemed automatically severed and the rest of the MOU shall be performed as closely as possible to the original intent of the Parties.

6.7.            References to ‘person’ or ‘persons’ include individuals, incorporate and unincorporated bodies or partnerships and include reference to that persons legal representatives, successors and permitted assigns.

6.8.            References to ‘include’ and ‘including’ shall be construed without limitation.

6.9.            Headings are for convenience only and shall not affect the interpretation of this MOU.

6.10.        Words importing the singular include the plural and vice versa. 

6.11.        Words importing the masculine gender include the feminine and neuter and vice versa.

6.12.        All words or phrases which are not specifically defined shall be construed in the normal context and meaning assigned to them generally and most commonly.

Signed for and on behalf of ABC:

Signed for and on behalf of XYZ:


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