NZ Memorandum of Understanding Template: What to Include

If you’re about to start working with a new business partner, supplier, funder, or collaborator, it’s normal to want something “in writing” before you spend time (and money) moving forward.

That’s exactly where a memorandum of understanding (MOU) template can help. A well-drafted MOU gives you a clear, practical way to document the deal you’re discussing, without necessarily locking you into a full contract too early.

In this guide, we’ll break down what an MOU is, when it’s useful for NZ businesses, what to include, when it can create legal risk, and how to use an MOU template properly (without accidentally creating a contract you didn’t mean to enter).

Note: This article is general information for New Zealand businesses and isn’t legal advice. MOUs can have real legal consequences depending on the facts and drafting, so consider getting advice for your specific situation.

What Is A Memorandum Of Understanding (MOU)?

A Memorandum of Understanding (MOU) is a written document that records the key points two (or more) parties have discussed and broadly agreed on.

In plain terms, it’s often used to answer:

• Who are we working with?
• What are we trying to do together?
• What are we each responsible for (at least in principle)?
• What happens next?

For small businesses, an MOU is usually used at an early stage of a relationship where you want clarity and momentum, but you’re not ready for a full agreement (or you need to do due diligence first).

You’ll also hear MOUs described as “pre-contract documents” or “good faith documents”. But an important point is this: an MOU is not automatically non-binding. Whether it’s legally enforceable depends on how it’s written and what the parties intended.

If you’re weighing up whether you need an MOU or something more formal, the distinctions in an MOU vs contract discussion are often where the real risks (and benefits) show up.

When Should Your NZ Business Use An MOU (And When Should You Skip It)?

An MOU template is most useful when you’re aligned on the “big picture”, but there are still details to work through before you commit to a final contract.

Common Situations Where An MOU Makes Sense

• Strategic partnerships (e.g. two businesses planning a joint offering, referral relationship, or co-marketing arrangement).
• Early-stage collaborations where scope is still being defined (e.g. creative projects, events, pilot programs).
• Negotiations involving multiple steps (e.g. you’ll sign an MOU now, then finalise pricing, deliverables, and milestones later).
• Funding or investment discussions where you want to document key principles before detailed documents are drafted.
• Complex projects where parties need a shared roadmap before committing to a full legal framework.

Situations Where You Usually Need A Proper Contract Instead

An MOU can be the wrong tool if you’re already at the stage where:

• money is changing hands immediately (or significant costs are being incurred),
• you need clear legal remedies if the other party doesn’t perform,
• deliverables and deadlines are fixed,
• you need strong protections around liability, IP ownership, warranties, or termination.

In those cases, a full agreement (or at least a tighter framework like a Heads of Agreement) may be more appropriate.

As a general rule: if you’d be in serious trouble if the other party walked away, you want more than a lightweight document.

What Should A Memorandum Of Understanding Template Include?

A well-drafted MOU should be clear, structured, and tailored to the commercial reality of what you’re doing.

Even if you start with a memorandum of understanding template, you should treat it like a framework - not a “fill in the blanks and forget about it” document.

Below is a practical checklist of clauses and sections that NZ businesses commonly include.

1) Parties And Background

Start by clearly identifying:

• the full legal names of each party (company name, NZBN if relevant),
• addresses for notices,
• key contact people (optional but often helpful).

Then include a short background section explaining the purpose of the relationship. This helps avoid arguments later about what the MOU was “really” about.

2) Purpose And Objectives

Spell out what you’re trying to achieve together.

Be specific enough that everyone understands the outcome, but don’t overcommit if details are still under negotiation.

Example objectives might include:

• developing a pilot program,
• exploring a distribution relationship,
• co-hosting an event,
• jointly developing a proposal for a third party.

3) Scope And Roles (Who Does What?)

This is often the most valuable part of an MOU for small businesses: a clear division of responsibilities.

Consider including:

• what each party will contribute (time, staff, resources, introductions, materials),
• what each party is responsible for delivering (if known),
• any assumptions (e.g. “subject to approvals” or “subject to budget sign-off”).

If the project is complex, an attachment (like a simple project plan) can keep the main MOU clean while still giving everyone clarity.

4) Timing, Milestones, And Next Steps

If you don’t include dates, MOUs can become vague “someday” documents. Adding timelines keeps things moving.

• start date and intended end date,
• key milestones,
• a plan for negotiating the final contract (including who drafts first and by when).

5) Financial Principles (If Any)

Many MOUs avoid detailed pricing, but it’s still common to document financial assumptions, such as:

• who pays which costs during the exploratory phase,
• whether costs are shared (and in what proportions),
• whether a future commercial agreement will include fees, revenue share, or commissions (without locking in exact numbers yet).

If you do include numbers, be careful. The more commercial detail you include, the easier it is for a court to view the document as intended to be binding.

6) Confidentiality

If you’ll be sharing sensitive business information, confidentiality shouldn’t be an afterthought.

You can include a confidentiality clause in the MOU, or you can sign a standalone Non-Disclosure Agreement before discussions begin (which is often cleaner, especially if negotiations might stop and start).

Confidentiality terms typically cover:

• what information is confidential,
• how it can be used (and who can access it),
• exceptions (e.g. information already public),
• how long confidentiality lasts.

7) Privacy And Data Handling (If Relevant)

If part of the relationship involves sharing personal information (customer lists, mailing lists, patient/client details, employee information), you need to think about the Privacy Act 2020.

At a minimum, your MOU should clarify what data is shared, what it can be used for, and how it must be stored and protected. Depending on the scenario, you may need a more formal arrangement (and your external-facing Privacy Policy should line up with what you actually do in practice).

8) Intellectual Property (IP) And Ownership

IP is a common “surprise problem” in collaborations.

If you’re co-developing anything - designs, content, software, branding, training materials, systems - you should document:

• what IP each party already owns before the project starts (pre-existing IP),
• who will own anything created during the collaboration (new IP),
• whether either party gets a licence to use the other’s materials.

If IP is central to the deal, it’s often worth moving beyond an MOU to a more detailed contract.

9) Dispute Resolution And Communication

Even if the MOU is intended to be mostly non-binding, it’s still useful to agree on how you’ll handle issues.

Common inclusions are:

• good faith negotiation between senior decision-makers,
• mediation before court,
• a process for escalating issues quickly (so the relationship doesn’t stall).

10) Term, Termination, And Status Of The Document

This is where your MOU template can either protect you or cause confusion.

You should state clearly:

• when the MOU starts and ends,
• whether either party can walk away (and how much notice is needed),
• which clauses survive termination (often confidentiality and privacy).

Most importantly, you should clearly set out whether the MOU is intended to be legally binding, non-binding, or a mix (binding for some clauses only).

Is A Memorandum Of Understanding Legally Binding In New Zealand?

This is the question that catches many business owners off guard.

In New Zealand, whether an MOU is legally binding depends on standard contract law principles - particularly what the parties intended and whether the document contains sufficiently certain terms to be enforceable.

Sometimes businesses sign an MOU thinking it’s “just a formality”, but the wording (and the surrounding circumstances) makes it look like a final deal. That’s when disputes happen.

What Makes An MOU Look Like A Contract?

An MOU is more likely to be considered binding if it includes things like:

• clear obligations (e.g. “Party A must deliver X by Y date”),
• pricing and payment terms,
• language like “will”, “must”, “agree to”, “shall”,
• signatures and formal execution wording (especially if it reads like a complete agreement),
• limited “outs” (i.e. no clear statement that it’s subject to contract or subject to further negotiation).

This is closely tied to the general rules around what makes a contract legally binding - which is why it’s so important to be deliberate about your wording.

Can An MOU Be Partly Binding?

Yes. It’s common for NZ businesses to use a hybrid approach where:

• most commercial terms are stated to be non-binding (e.g. scope and intentions), but
• certain clauses are clearly binding (e.g. confidentiality, privacy, exclusivity, costs, or a “no poaching” clause).

This can be a smart middle ground - but only if it’s drafted clearly so there’s no confusion about what is binding and what isn’t.

What About “Subject To Contract” Wording?

“Subject to contract” wording can help signal that the parties don’t intend to be legally bound until a formal contract is signed.

However, it’s not a magic phrase, and it doesn’t automatically prevent legal obligations arising. A court may look at the whole document and the surrounding context to work out what the parties intended.

Practically, if you want the MOU to stay non-binding, the whole document should consistently reflect that intention - not just one line buried on page 5.

How To Use A Memorandum Of Understanding Template Safely (Without Creating Problems Later)

Templates are popular because they’re quick. But for business owners, speed is only helpful if it doesn’t create legal uncertainty.

Here’s how to use a memorandum of understanding template in a way that actually supports your business (instead of causing a messy dispute later).

1) Be Clear On Your Goal Before You Start Editing

Ask yourself:

• Are we documenting a discussion, or actually making a deal?
• Do we want any clauses to be binding right now?
• What are we not ready to commit to yet?

If you can’t answer those questions, it’s very easy for an MOU to turn into a confusing half-contract.

2) Keep The Document Consistent (Avoid Mixed Messages)

A common mistake is mixing non-binding language (“intend to”, “may”) with binding language (“must”, “will”) across the same topic.

If parts are intended to be binding, label them clearly and separate them from the non-binding terms.

3) Don’t Use An MOU To Avoid “Hard Conversations”

If you’re using an MOU because you’re uncomfortable negotiating key issues (money, IP ownership, timelines, exit rights), that’s a red flag.

An MOU is most useful when it supports negotiation - not when it replaces it.

4) Think About Misrepresentation And Overpromising

Even during negotiations, you should take care that what you put in writing is accurate. Overstated claims can create legal risk, especially in commercial discussions.

In NZ, the Fair Trading Act 1986 can apply to misleading or deceptive conduct in trade. So if your MOU includes statements about capability, exclusivity, funding, or product performance, keep it honest and properly qualified.

5) Use The Right Document For The Stage You’re At

Sometimes, what you actually need isn’t an MOU.

• If the deal is investment-focused, a Term Sheet may fit better.
• If you’re aligning on commercial headlines before detailed drafting, a Heads of Agreement might be the better tool.
• If you’re only sharing sensitive info to evaluate the opportunity, an Non-Disclosure Agreement could be the simplest first step.

Choosing the right tool upfront can save you time (and legal spend) later.

6) Get Legal Help Before You Sign (Especially If Money Or IP Is Involved)

Even a “simple” memorandum of understanding template can create real obligations if it’s drafted poorly or signed too early.

If the MOU involves:

• payment or cost-sharing,
• exclusivity arrangements,
• customer data,
• ownership of work created during the project,
• long timelines or significant reliance,

it’s worth getting legal advice so the document matches your commercial intent and protects you from day one.

If you want a starting point, having a lawyer draft or review a Memorandum of Understanding can help ensure it’s actually fit for your business (and not just a generic document that doesn’t reflect the deal).

Key Takeaways

• An MOU template is a practical way to record early-stage agreements and clarify expectations before signing a full contract.
• MOUs are commonly used for partnerships, collaborations, and negotiations where you want alignment on key principles but still need to finalise details.
• An MOU in New Zealand can be non-binding, binding, or partly binding depending on the wording, the parties’ intention, and whether the terms are sufficiently certain.
• A strong MOU usually covers the parties, purpose, scope/roles, timelines, financial principles, confidentiality, privacy, IP, dispute resolution, and term/termination.
• Templates are useful, but if your MOU includes money, exclusivity, customer data, or IP ownership, it’s smart to get legal help before signing.
• Using the right document for the right stage (MOU vs term sheet vs heads of agreement vs contract) can reduce risk and keep negotiations moving.

If you’d like help drafting or reviewing an MOU for your business, you can reach us on 0800 002 184 or email team@sprintlaw.co.nz for a free, no-obligations chat.