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In this video tutorial, Matthew explains how to create a memorandum of understanding using legal templates. He instructs viewers to click a link in the video description to access business forms, then use the search function to find the memorandum of understanding template. The process begins by identifying the first party as either a business or an individual and entering the corresponding details such as name, address, city, state, and zip code. The same information is required for the second party. Viewers must then specify the memorandum's effective date, project name, and objective. Additionally, Matthew notes that parties should outline the expertise and experience they will contribute to the project.