Mou vs. Interlocal Agreement: Understanding the Differences

When it comes to legal agreements between organizations, two terms that are often used interchangeably are MOU and interlocal agreement. However, there are significant differences between these two types of agreements that are important to understand.

What is an MOU?

An MOU, or memorandum of understanding, is a non-binding agreement that outlines the terms of a relationship between two or more parties. MOUs are often used as a starting point for negotiations or as a way to establish a framework for future cooperation.

MOUs can be used in a variety of settings, from business partnerships to government agencies to nonprofit organizations. Unlike a contract, an MOU is not legally enforceable, although it can be used as evidence of a commitment to a certain course of action.

What is an Interlocal Agreement?

An interlocal agreement, on the other hand, is a legally binding contract between two or more government bodies. These agreements are used when multiple municipalities or government agencies need to work together to provide services or address a particular issue.

Interlocal agreements can cover a wide range of topics, from sharing resources like equipment or personnel to joint planning efforts or even the creation of a new governmental entity. Because interlocal agreements are legally binding, they are subject to the same requirements and oversight as any other government contract.

Key Differences Between MOUs and Interlocal Agreements

While both MOUs and interlocal agreements are agreements between two or more parties, there are several key differences to be aware of:

– Legal enforceability: MOUs are not legally enforceable, while interlocal agreements are. If a party fails to fulfill its obligations under an interlocal agreement, it can be sued for breach of contract.

– Applicability: MOUs can be used between any types of organizations, while interlocal agreements are specific to government bodies.

– Approval process: MOUs generally do not require formal approval or adoption by the parties involved, while interlocal agreements are subject to formal approval processes by each participating government body.

– Scope: MOUs are typically more general in scope and may not include specific details about how the parties will work together, while interlocal agreements are more detailed and include terms that must be adhered to by all parties.

In summary, while MOUs and interlocal agreements are both types of agreements between multiple parties, they serve different purposes and have different legal ramifications. It`s important to understand these differences when considering which type of agreement to use in any given situation.