Uniform Commercial Code

The Uniform Commercial Code (UCC or the Code) is one of a number of uniform acts that have been promulgated in conjunction with efforts to harmonize the law of sales and other commercial transactions in 49 states (all except Louisiana) within the United States of America. This objective is deemed important because of the prevalence today of commercial transactions that extend beyond one state (for example, where the goods are manufactured in state A, warehoused in state B, sold from state C and delivered in state D). The UCC deals primarily with transactions involving personal property (moveable property), not real property (immovable property).

Memorandum of Understanding

A Memorandum of Understanding (MoU) is a legal document describing a bilateral or multilateral agreement between parties. It expresses a convergence of will between the parties, indicating an intended common line of action and may not imply a legal commitment. It is a more formal alternative to a gentlemen's agreement, but in some cases, depending on the exact wording, lacks the binding power of a contract.  Sometimes, a memorandum of understanding is used as a synonym for a letter of intent, particularly in private law. As such, a letter of intent expresses an interest in performing a service or taking part in an activity, but does not legally obligate either party.

Memorandum of Agreement

A memorandum of agreement (MOA) or cooperative agreement is a document written between parties to cooperatively work together on an agreed upon project or meet an agreed upon objective. The purpose of an MOA is to have a written understanding of the agreement between parties.  An MOA can be a document written as a result of dispute resolution. An MOA written in this context will clearly identify the dispute, the means of resolving the dispute and an agreement for cooperatively working as partners, or working as separate entities but with certain agreed and often legal recourse if the terms of the resolution is not met.  An MOA can also be used as a document outlining the cooperative terms of two entities to work in partnership on certain listed projects, or as a general partnership. The agreed responsibilities of the partners will be listed and the benefits of each party will be listed. As a part of the agreement there is usually a list of binding terms that makes the partnership a cohesive unit and often there is an obligation of funds attached to certain terms in the agreement.

Letter Agreement

Business, without the aid of legal counsel, often use a simple form of  contract known as a letter agreement, so named because it takes the form of a business letter, but includes the basic elements of a contract to make it binding under certain conditions.   The letter is generally signed by drafting parting, and includes includes a sentence indicating that if the other side agrees with the terms of the letter, that party can simply sign at the bottom of the letter on the "Agreed and Accepted" line and return it to the sender. It is a common practice to send two copies and have the other party sign both and return one.

Some businesses prefer this form of contract becuase its lack of formality and simplistic terms are less intimidating-looking than a formal contract, and thus it may be easier to get one signed.  But letter agreements, because they are not drafted by attorneys, tend to omit some important contractual terms.  Thus, these forms of contracts are best left for small insignificant matters.

Letter of Intent

A letter of intent or LOI is a document outlining an agreement between two or more parties before the agreement is finalized.  LOI's resemble written contracts, but are usually not binding upon the parties in their entirety. Many LOI's, however, contain provisions that are binding, such as non-disclosure agreements, a covenants to negotiate in good faith, or a "stand-still" or "no-shop" provision promising exclusive rights to negotiate. A LOI may also be interpreted as binding the parties if it too closely resembles a formal contract.  The purposes of a LOI may be:

1. to clarify the key points of a complex transaction for the convenience of the parties;
2. to declare officially that the parties are currently negotiating, as in a merger or joint venture proposal; or
3. to provide safeguards in case a deal collapses during negotiation;

A LOI may also be referred to as a memorandum of understanding (MOU), term sheet or discussion sheet. Although the terms refer to different documents, the differences are often formal in nature, reflecting different drafting styles or business customs, not a substantive difference in what these various documents accomplish.  In some jurisdictions, such as France, Letters of Intent are binding legal documents. This is true even if the LOI specifically states that it is non-binding. Thus, consulting a legal professional before signing a Letter of Intent, particularly in cross border transactions.

<< Previous   1 | 2 | 3 | 4 | 5 | 6 | 7 | 8

*Please note that the Sample Business Contracts are provided as a reference only to assist you in better understanding the types of business and commercial agreements.  These samples should not be utilized as templates to "draft" your own agreement because such the agreement or provisions thereof may be invalid, illegal, or not comply with the laws and regulations of a particular jurisdiction and therefore may be invalidated or unenforced by a court of competent jurisdiction.