What is a Deal Memo?

A deal memo or deal memorandum is a summary of the important points of a contract. It is a written document that is usually short. Deal memo is an American term. It is a precursor before having a contract. Usually, it is written because both parties do not have enough time yet to make the contract and they need to write their terms in a hardcopy that they can use. They can use a deal memo temporarily before the contract. It can make their legal agreement documented. A deal memo is a little different than an ordinary memo because of its key elements and use. But a deal memo is an example of a memo. Usually, a deal memo is used in the film industry or in the music industry.

A cast or actor can have a deal memo with the producer. Writers and the workers in video production can also be given a deal memo. Some example of deal memo are actor deal memo, crew deal memo, cast deal memo, producer deal memo, and talent deal memo. You can write a deal memo in a memo notepad or a memo pad. Unlike the typical memo, a deal memo contains the signatures of the two parties. A deal memo is so useful, because you can make an agreement by using it if you still do not have the time or the opportunity to have a contract. It will do for the mean time. You can be at ease that your agreement will be working just by a deal memo.

Key Elements of a Deal Memo

Are you going to write a deal memo but you do not know what to put in it? Here are elements that you need to include in a deal memo.

Company Vision: Whatever the company is trying to achieve, you must include it as the company vision. Maybe you are a director with a company that wants to give the best films to people. Or maybe you just own a business that wants to intoduce an investment to many. Whether you are a contractor who is having a freelance, you must ensure that the deal memo has a company vision that will introduce your company in a good way. It will provide a good information for the reader and will make it easier for the other party to sign the deal memo. Write a company vision in 2-5 sentences. Make this vision as impressive as you can.Statement of the Problem: You must put the specific problem that your company is trying to give a solution. If your company wants to produce good films that are wholesome to the young people, you must put it and your reasons for it. Tell everyone that you want the children to watch good things instead of films that have violence and can suggest bad morals to them. With your films, you can mold them better to become good people that can help the society. That you want to set an example. If you will put a statement of the problem, the deal memo will be easier to be understood by anybody. They will know your purpose.The Founders: The person or the people who are going to solve the problem must be included in the deal memo. Include their names and the reasons why they are qualified to solve the problem. If the problem is how to provide good films to people, the founders may be the producer or the director. They are the ones who are going to provide solution to the problem. With the project that they have in mind, the problem will get the solution that it deserves.Business Product: This is the intended solution for the problem. It is your product that can solve the problem. If the problem is violent films, you can provide good cartoons as a solution. In other words, if you are going to introduce your product, be sure that you can provide reasons how it can affect any problem. Introducing your product in this way can tell that your product has a specific purpose and that it is good. Your product is one great element in the deal memo. Write it with benefits and purposes. It can give a good reputation for your product.Business Description: This states the tractions and metrics of your company. It tells who you are. You should include this in the deal memo as you have to tell everyone things about you. It can tell what the deal memo is all about because it will state where it came from. The person who is reading it will have an idea about the project. Describe your company in 4-8 sentences. This description will inform the readers how good you are in doing your projects. They will not be questioning where the deal memo came from if you will include the business description.The Deal: The most important part is the deal. Explain this in the best possible way that you can. Tell what are things that are included in your deal. Explain its main points and put all the details about it. You should tell how big is the deal. Include the name of the investors and the past investors. Ensure that the scope of the deal is well-written and that nothing will be questionable. This deal is that something that you and the other party have agreed upon. You simply just have to put in paper. But in doing it, be accurate and concise. Write what the other party is expecting and do not put alterations. If you will do that, they may not sign the deal memo. So to make the deal memo successful, write everything properly.Price of the Deal: This states the cost that is related to the deal. A deal memo cannot have the price, but there are deal memos that have the prices pf the deal. You must be also accurate in writing the price that you have in your deal. This price is final and it is what you are going to pay the party that will give the service. Or if you will have a common profit, the percentage will be given.

Benefits of a Deal Memo

There are reasons why a deal memo is vital. It has certain benefits that is why it is used in any kind of business. They are the following:

It can validate costs. A deal memo can contain the cost that both parties will have an agreement. Since they are not making a contract yet, the price that they have to agree upon can be validated in the deal memo. They can have their initial agreement with the deal memo.You can know the affordability of your scheme. Because you are just going to use a deal memo first, you can know what works and what do not work. You can assess the costs of all the projects that you will have. A deal memo makes everything easier for you. You can work without having a contract. You can manage the costs without you having a contract. It will benefit both you and the other party.You can know the market trends. As you are writing the deal memo, analyzing the market trends is one thing that you should do. You should know all the comparables. This will give you a good understanding of the market. You will know how it works recently. Looking at all the planning portals, you can know how your project can hit the market.You can have an exit strategy. Just by making a deal memo, you can have strategies on doing your business. You will know how to solve a problem if ever it comes. If your plans do not work, you can think of other plans that you can use to save your project. The deal memo can help you.Your project will start sooner. Maybe you cannot find time to draft a contract. A deal memo is very useful because you can start your projects just by having it. You do not need to spare some time to make a contract before your project will begin. You can start your project anytime. You just have to make a simple deal memo and you can begin to work as soon as possible. You can save time and a lot of efforts. Your work will have a continuous flow without disruption.It is cheaper to begin with. A contract may cost a hundred of dollars. Sometimes thousands. If you will use a deal memo momentarily, you can save money for the meantime. It will be good for business partners that do not have much capital yet. They can use a deal memo to keep their agreement without them spending any money. They can save when the project begins.You can understand all assumptions. A contract is final. But if you will use a deal memo first, you can know everything about your business without you risking on so many terms and conditions. You can decide on things that could matter to you. If you want to alter something in the way that you do business, you can have it because you only have a deal memo. It will be easier for you to change things that you think you have to. A deal memo makes things more simple and possible.The project will run smoothly. Using a deal memo from time to time can make the project to keep its pace better. You and the other party or parties can decide on the things that you should do on the project and all of you can adjust from time to time. A deal memo will be advisable to all of you. To add the fact, that it is so much easier to write. Just a simple piece of a deal memo, can set all of you to work. No need to be tensed with long contracts that needs to be amended for a span of time.

How to Write a Deal Memo

Is it your first time to write a deal memo? First times are hard sometimes, so to make things easier for you, you can use the following steps which can help you how to write a memo.

Step 1: Begin with a header.

A header tells that you are communicating in a memorandum. It contains the name of the recipient, the name of the sender, the date, and the subject of the deal memo. Be accurate in writing this details, because you can refer to the deal memo when the two of you are going to make a contract. Be sure to input the date correctly and choose the right subject that can describe your agreement.

Step 2: Start writing an introduction. 

Use declarative sentence in giving the main topic of the deal memo. The introduction will be a short summary of what your deal memo is all about. Be clear about the introduction. It should emphasize the contents of the deal memo. Use 3-4 sentences that can describe your agreement, defining the very important infornation of the deal memo. The introduction somehow is the executive summary, so write effectively for it. Do not miss on the important information that you should give.

Step 3: Write the body paragraph.

Then the most of your content should be written. They are the information on the deal memo. Write the key elements or all the data that you should include in the deal memo. Elaborate main ideas and write in short paragraphs. Make each paragraph using 2-4 sentences only. Make your deal memo as easier to read as possible. Include subheadings and have lists using bullets so the deal memo will be easier to comprehend when the recipient scans it. By using that, the recipient will have an initial understanding of the deal memo even at a glance.

Step 4: Make a conclusion.

After the body paragraph, have a conclusion. This is another summary of the deal memo. Only, it includes ideas on how to take action for the deal memo. If an action is required, tell it at the conclusion.

Step 5: Close with the signatures.

Your signatures are needed in the deal memo. You can put your names, with your email address and contact number. Then signature blocks that are alloted for the signatures of the parties that would enter the agreement.


Is a Deal Memo Binding?

A deal memo signifies your agreement with another party. It is a document that both of you can adhere but a deal memo is not binding. To make a binding agreement, you should make a contract. A deal memo just serves its purpose. It is not binding and cannot be brought in the court of law.

Where Can I Find a Deal Memo Example?

A deal memo sample is easy to find. Just type “deal memo template” in Google, and diffrent websites who offer templates can be shown to you. You can choose a template that you like and start writing your deal memo. Examine each template first, so you can choose the best one for you.

Making a deal memo is much easier than making a contract as we start a project. It will save us time and cost. It is useful, although, it is not binding. But still, a deal memo is something to be accounted for. We can use it every time that we are making a project. It is beneficial for everyone or for all parties that are involved. It is more simple and is so much easier to write. If you cannot make it to have a contract, and your project should start as soon as possible, you can try making a deal memo first. Make a deal memo in your notepad and you can start your project without sweating for a contract.