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PLAYBOOK TEMPLATES

Memorandum of Understanding (MOU)

An MOU establishes the foundational understanding between parties prior to definitive agreements. This playbook reviews negotiation of commitments, timelines, and governance structures.

Payment & Pricing

Why This Matters: Unclear payment terms can lead to cash flow issues and disputes over amounts due. Well-defined pricing and payment provisions protect the client's financial interests and reduce collection risks.

Negotiation strategy

If you're the Party A:

Negotiate for a payment schedule that aligns with your cash flow needs and includes clear milestones. Ensure that any pricing adjustments are capped and require mutual agreement.

If you're the Party B:

Secure a payment schedule that ensures timely cash flow and includes remedies for late payments. Advocate for pricing adjustments to reflect changes in costs.

Essential elements

1

Payment Schedule

Aligns with deliverables and milestones.
2

Pricing Adjustments

Mutual agreement on cost changes.
3

Remedies for Late Payment

Interest and suspension rights.

Action framework

ACCEPT

Propose edits if payment terms are unclear or misaligned with deliverables.

EDIT

Reject if terms impose unreasonable financial risks or lack clarity.

ADD

Add clauses for non-payment remedies and pricing adjustments.

PRO TIP

Always ensure payment terms are consistent with your financial policies and risk management strategies.

Example clauses

FAVORABLE

Preferred Payment Terms

"The Buyer shall make payments to the Seller in accordance with the payment schedule set forth in Exhibit A. All payments shall be made in U.S. dollars via wire transfer to the bank account designated by the Seller. Payments shall be due within thirty (30) days of receipt of an invoice from the Seller, unless otherwise specified in Exhibit A."
NEUTRAL

Pricing Adjustments

"The pricing set forth in this Agreement is subject to adjustment in the event of any changes in the cost of raw materials, labor, or other production costs. Any such adjustments shall be mutually agreed upon in writing by the parties and shall become effective as of the date specified in such written agreement."
UNFAVORABLE

Unclear Payment Terms

"Payments shall be made as agreed upon by the parties without a specified schedule or method."

Fallbacks

High-Risk Projects

In high-risk projects, ensure payment terms include advance payments or escrow arrangements to mitigate financial exposure.

International Transactions

For international deals, specify currency and account for exchange rate fluctuations in the payment terms.

Long-Term Contracts

In long-term contracts, include periodic reviews of pricing and payment terms to adjust for inflation and market changes.
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