Writing Terms of Reference

Note: Want to skip the guide and go straight to the free templates? No problem - scroll to the bottom.
Also note: This is not legal advice.

Introduction

Creating terms of reference for any business or transaction is essential to provide clarity and direction for all parties involved. Not only will it help to ensure that roles and responsibilities are understood, but it can also protect those involved from potential disputes and misunderstandings. Moreover, having a set of terms of reference can ensure that the objectives of all parties are clearly defined, helping to reduce confusion and increase the chances of success. Finally, by having clear terms of reference in place, all parties are able to remain compliant with applicable law throughout the process.

At Genie AI, we recognise how important these documents are; our team has developed the world’s largest open source legal template library – allowing anyone to draft high quality legal documents without needing the expertise or resources associated with engaging a lawyer. By leveraging millions of data points on market-standard terms of reference documents, our users can quickly create bespoke agreements tailored precisely to their requirements. We offer simple step-by-step guidance on how to access our template library today – no Genie AI account required - so you can start creating your own terms of reference without delay! Read on below for more information about how Genie AI’s library can help you create successful business transactions, confidently and conveniently.

Definitions (feel free to skip)

Stakeholder - A person or group with an interest in a particular project or outcome.
Terms of Reference - A document that outlines the purpose, scope, roles and responsibilities, key performance indicators, timeline, budget, reporting mechanism, and process for resolving disputes for a project.
Plain language - Clear, easy to understand language, without jargon or technical terms.
Concise - Short and to the point.
Ambiguity - Unclear or uncertain meaning.
Scope - The range of a project, including tasks, timeline, and objectives.
Roles and Responsibilities - The specific actions or duties that are assigned to each person or group involved in a project.
Decision-making authority - The power to make decisions on behalf of the project.
Key Performance Indicators - Metrics used to measure the performance of a project.
Schedule - A timeline of deadlines necessary to complete a project.
Budget - The amount of money allocated to a project.
Reporting mechanism - The format and frequency of reports on the progress of a project.
Resolving disputes - The process of resolving conflicts between stakeholders.

Contents

• Establishing the Purpose of the Terms of Reference
• Writing a clear statement of purpose
• Identifying who is involved
• Defining the Scope of the Terms of Reference
• Outlining the tasks to be completed
• Identifying the timeline
• Identifying Roles and Responsibilities
• Assigning roles and responsibilities to individuals or groups
• Establishing decision-making authority
• Establishing Key Performance Indicators
• Identifying the necessary criteria for successful completion
• Defining the metrics to measure performance
• Establishing a Schedule
• Identifying the deadlines for each task
• Establishing a timeline for completion
• Establishing a Budget
• Assessing the cost of the project
• Allocating resources
• Developing a Reporting Mechanism
• Defining the format and frequency of reports
• Identifying who should receive the reports
• Establishing a Process for Resolving Disputes
• Identifying potential conflicts
• Establishing a mechanism for resolving conflicts
• Finalizing the Terms of Reference
• Reviewing and revising the Terms of Reference
• Obtaining sign-off from all relevant stakeholders
• Reviewing and Revising the Terms of Reference as Needed
• Scheduling regular reviews of the Terms of Reference
• Identifying changes to the Terms of Reference
• Implementing any necessary revisions

Get started

Establishing the Purpose of the Terms of Reference

• Identify the project or task the Terms of Reference refer to, and the desired outcome
• Determine the scope of the project or task and who will be involved
• Consider the objectives, deliverables, timeline and budget
• Draft an overview of the project or task that outlines these elements
• Check with relevant stakeholders to ensure the overview is complete and accurate

You’ll know you can check this step off your list when you have a comprehensive overview of the project or task that includes the desired outcome, scope, objectives, deliverables, timeline and budget.

Writing a clear statement of purpose

• Brainstorm the purpose of the Terms of Reference and write it down
• Ask yourself questions such as: what is the purpose of this document, who is the intended audience, what are the expected outcomes and how will they be measured
• Draft a statement of purpose that is concise and clear
• Ensure that the statement of purpose is measurable and achievable
• Check the statement of purpose against the list of questions used to brainstorm to make sure that all elements are covered
• Once the statement of purpose is finalized, you can check this step off your list and move on to the next step.

Identifying who is involved

• Identify who will be responsible for creating the Terms of Reference
• Identify who will be responsible for reviewing the Terms of Reference
• Identify who will be responsible for approving the Terms of Reference
• Ensure all parties are aware of their roles and responsibilities
• When all roles and responsibilities have been identified and all parties have been made aware of their roles, this step is complete and you can move on to the next step of defining the scope of the Terms of Reference.

Defining the Scope of the Terms of Reference

• Identify the purpose and objectives of the project
• Determine the expected outcomes of the project
• Describe the geographic area, target population and any other relevant parameters of the project
• Identify any assumptions that may impact the project
• Describe the timeline for the project

You can check this step off your list when you have a clear description of the scope of the project that outlines the purpose, objectives, expected outcomes, parameters, assumptions and timeline of the project.

Outlining the tasks to be completed

• List the tasks that need to be completed as part of the Terms of Reference
• Consider any activities or deliverables that need to be included in the Terms of Reference
• Ensure the tasks are achievable within the timeline and scope of the project
• Identify any resources or personnel that need to be allocated in order to complete the tasks
• When you have an accurate list of tasks, you can move on to the next step: Identifying the timeline.

Identifying the timeline

• Establish a timeline for the project that outlines key milestones, including a start date, major deliverables, and the projected end date.
• Consult with stakeholders to determine the feasibility of the timeline and make any necessary adjustments.
• Confirm the timeline with the project team and document it in the Terms of Reference.
• Once the timeline is finalized, the Terms of Reference can be completed and distributed.

Identifying Roles and Responsibilities

• Identify the roles and responsibilities of each individual or group who will be involved in the project.
• Describe each position, the tasks associated with that position, and any special qualifications that would be beneficial for the role.
• Identify the roles and responsibilities of individuals or groups outside of the project, such as stakeholders, who may have a vested interested in the outcome of the project.
• Outline the reporting structure for the project and specify who is responsible for providing progress reports and updates.
• When all roles and responsibilities have been identified and assigned, the step is complete and the document can be checked off your list.

Assigning roles and responsibilities to individuals or groups

• Assign specific roles and responsibilities to each individual or group
• Create a list of tasks each individual or group needs to complete
• Clearly define the scope of work and expectations for each individual or group
• Ensure that all roles and responsibilities are agreed upon by all parties involved
• Document the roles and responsibilities in the Terms of Reference
• When all roles and responsibilities have been assigned, this step can be checked off the list.

Establishing decision-making authority

• Establish a decision-making authority for the project.
• Consider who has the authority to make decisions during the project.
• Write down the decision-making authority in the Terms of Reference.
• Check that the decision-making authority is clear and unambiguous to all parties involved in the project.
• Acknowledge that the decision-making authority has the right to make decisions that override the contribution of any other party.
• Confirm that the decision-making authority is accepted by all parties involved in the project.
• When the decision-making authority is established and accepted, you can check this off your list and move on to the next step of establishing Key Performance Indicators.

Establishing Key Performance Indicators

• Define and agree upon the KPIs that need to be tracked to measure the success of the project
• List out the performance indicators that need to be monitored on a regular basis
• Identify the criteria that will be used to assess progress on each performance indicator
• Develop a system for tracking and reporting on the performance indicators
• Agree upon the frequency of reporting on the performance indicators
• When the KPIs have been defined and agreed upon, the step has been completed and you can move on to the next step.

Identifying the necessary criteria for successful completion

• Brainstorm and identify the criteria that need to be met in order for the project or task to be considered successful
• Consider any external factors or conditions that must be present for success
• Identify the necessary resources required to complete the task
• Develop a timeline for the completion of the task and any milestones within that timeline
• Make a list of all the criteria that need to be met in order to ensure success
• Once all criteria have been identified, review the list to ensure it is comprehensive and feasible
• Once the criteria have been established and reviewed, you can move on to the next step: Defining the metrics to measure performance.

Defining the metrics to measure performance

• List out the performance metrics that will be used to measure the success of the project
• Decide what the goals are for each metric, such as a target number to reach or an acceptable range of performance
• Identify how the metrics will be measured and tracked
• Test the measurements to make sure they are accurate and valid
• When the metrics are established, the step can be checked off the list and the next step can be started.

Establishing a Schedule

• Establish a timeline for the project, allowing for flexibility and adjustment as needed
• Identify key milestones and deadlines for each task
• Prioritize tasks and schedule them according to importance and urgency
• Determine the resources needed for each task and the time required to complete it
• Take into account external factors such as holidays, working hours, and other commitments
• Consider the availability of the team members involved
• Create a timeline for the project and assign tasks to each team member
• Regularly update the timeline to ensure that tasks are completed on schedule
• When the timeline is complete, you can check off this step and move on to the next.

Identifying the deadlines for each task

• Identify and document the timeline of tasks involved in the project.
• Set realistic, achievable deadlines based on the scope of the project.
• Ensure all stakeholders are aware of the deadlines and are in agreement with them.
• Create a timeline document that can be shared with stakeholders to track progress.
• Assign ownership of tasks and record the responsible party in the timeline document.
• Monitor progress and adjust deadlines as needed.
• Once all deadlines are set, check this off your list and move on to the next step.

Establishing a timeline for completion

• Set out an overall timeline for the project, including when the project will start and finish
• Map out the individual tasks that need to be completed and set out deadlines for each
• Ensure that the timeline is realistic and achievable, taking into account the availability of resources
• Agree on a timeline with the other stakeholders, and document the timeline in the Terms of Reference
• Check off this step when the timeline has been agreed and documented in the Terms of Reference.

Establishing a Budget

• Estimate the budget for the project
• Identify the resources available to complete the project within the given budget
• Determine if the resources are sufficient to complete the project within the given timeline
• Consider the need to hire additional resources, if necessary
• Compare the project costs against the expected benefits
• Once the budget is established, document it in the Terms of Reference
• Make sure the budget is approved by all stakeholders
• When the budget is approved and documented, this step is complete and you can move on to the next step.

Assessing the cost of the project

• Create an accurate estimate of the financial resources needed for the project
• Consult with stakeholders and subject matter experts to determine the potential cost of the project
• Take into account the cost of the personnel, materials, and other resources that will be necessary to complete the project
• Identify any potential risks to the project and estimate the cost of risk mitigation
• Establish a timeline with approximate costs associated with each milestone
• When you have a comprehensive cost assessment, you can check this step off your list and move on to allocating resources.

Allocating resources

• Identify the resources needed for the project and determine the cost associated with each.
• Consider recruiting additional staff, subcontracting, and/or outsourcing.
• Create a budget for the project and confirm that it is approved by all parties.
• Once the resources have been allocated, you can move on to developing a reporting mechanism.

Developing a Reporting Mechanism

• Identify the information that needs to be reported and the stakeholders that need to receive it
• Outline the format that the report should take and how regularly it should be issued
• Establish the process for collecting, analyzing, and distributing the report
• Ensure the report is compliant with any existing laws and regulations
• Set up a timeline for delivering the report
• Determine what data needs to be tracked and how it should be collected
• When all the above steps have been completed, you can move on to the next step of defining the format and frequency of reports.

Defining the format and frequency of reports

• Determine how often reports should be generated (daily, weekly, monthly, etc.)
• Decide the format of the reports (PDF, Word document, Excel spreadsheet, etc.)
• Outline the specific information that needs to be included in each report
• Establish a timeline and frequency for when reports should be generated
• When all the decisions are made, document them in the Terms of Reference

Once all of the decisions are made and documented in the Terms of Reference, you can move on to the next step of Identifying who should receive the reports.

Identifying who should receive the reports

• Identify the key stakeholders who should receive reports
• Prepare a list of the stakeholders and their contact information
• Confirm the list with the key stakeholders
• Check off this step when all stakeholders agree to the list of those who will receive reports.

Establishing a Process for Resolving Disputes

• Establish a process for resolving disputes. This should include protocols for addressing potential conflicts, the methods of communication to be used, and the timescale for resolving any disputes.
• Identify who should be included in the dispute resolution process, such as stakeholders and representatives of the parties involved.
• Consider what methods should be used to communicate during the dispute resolution process, such as meetings and email.
• Decide on a timeline for resolving any disputes, such as a set amount of time for each party to respond before a decision is made.
• Draft a document outlining the dispute resolution process.
• Once the document is drafted, review and revise as needed.
• When the document is finalised, distribute it to all relevant parties.

You’ll know when you can check this off your list and move on to the next step when the document outlining the dispute resolution process has been reviewed, revised, and distributed to all relevant parties.

Identifying potential conflicts

• Review existing documents such as the charter, bylaws, and mission statement to identify any potential conflicts of interest
• Brainstorm with the relevant stakeholders to identify any issues or potential conflicts that may arise
• Consider the roles of each stakeholder and identify any areas of overlap between them that could lead to potential conflicts
• When all potential conflicts have been identified, discuss and agree on how to handle them
• Document the agreed upon plan for handling potential conflicts in the Terms of Reference
• Once all potential conflicts have been identified and a plan is in place to handle them, this step can be marked as complete.

Establishing a mechanism for resolving conflicts

• Agree on a process for resolving disputes, such as through negotiations or a third-party mediator
• Decide how decisions regarding the resolution of conflicts will be made
• Outline how the parties will keep informed of the process of resolving conflicts
• Include possible consequences for failure to comply with the agreed resolution
• Determine the process for modifying the mechanism for resolving conflicts
• When all parties have agreed on the mechanism for resolving conflicts, this step can be checked off and the Terms of Reference can be finalized.

Finalizing the Terms of Reference

• Carefully review the draft Terms of Reference
• Ensure that all the necessary considerations have been taken into account
• Make any necessary revisions and additions
• Make sure all stakeholders agree on the content and format
• Obtain the necessary approvals
• Determine the final format for the document
• Finalize the Terms of Reference
• You will know you have completed this step when you have a finalized version of the Terms of Reference that has been approved by all stakeholders.

Reviewing and revising the Terms of Reference

• Review the Terms of Reference for accuracy and completeness
• Ensure that all requirements, objectives, and deliverables are clearly stated
• Ensure that all stakeholders are represented and their roles and responsibilities are adequately defined
• Check that the deliverables and timelines are realistic
• Ensure that the Terms of Reference is aligned with the overall project plan
• Make any necessary revisions
• Obtain sign off from all relevant stakeholders
• Once all revisions are complete and the Terms of Reference are signed off, you can move on to the next step.

Obtaining sign-off from all relevant stakeholders

• Identify all stakeholders who need to approve the document and make sure they are included in the review process
• Contact each stakeholder and provide them with the Terms of Reference document
• Explain the importance of their input and the role they play in the project
• Follow up with each stakeholder to ensure they have received the document and understand their role
• Request a signed approval of the Terms of Reference from each stakeholder
• Once all stakeholders have signed off, you can move on to the next step.

Reviewing and Revising the Terms of Reference as Needed

• Review the Terms of Reference document and ensure that all the requirements have been met
• Consult with relevant stakeholders to identify any areas that need to be changed or updated
• Revise the document as needed to reflect any changes
• Once all changes have been made, you can check this step off the list and move on to the next step.

Scheduling regular reviews of the Terms of Reference

• Set a timeline for reviews of the Terms of Reference with clear, realistic goals
• Determine how often the Terms of Reference should be reviewed (eg. annually)
• Assign responsibility for reviews to a specific individual or team
• Make sure to set reminders or notifications to ensure that the Terms of Reference are reviewed on time
• After each review, update the Terms of Reference, if needed
• Once the timeline and responsibilities have been determined and set in place, you will know that you can move on to the next step.

Identifying changes to the Terms of Reference

• Review the Terms of Reference regularly and identify any changes that need to be made.
• Consider any feedback from stakeholders, the business requirements, any changes to the project scope or timeline, and any changes in the external environment that may have an impact on the project.
• Create a list of changes that need to be made, if any.
• Once you have identified the changes that need to be made, you can check this off your list and move on to the next step.

Implementing any necessary revisions

• Review the changes to the Terms of Reference identified in the previous step
• Decide whether the changes should be implemented or not
• If changes should be implemented, make the necessary revisions to the Terms of Reference
• Have other stakeholders review the revised Terms of Reference
• Make any necessary modifications based on the review of the revised Terms of Reference
• Once the revised Terms of Reference have been approved, finalize the document
• You will know that you have completed this step when the revised Terms of Reference have been finalized and approved by all stakeholders.

FAQ:

Q: What is the difference between Terms of Reference and a contract?

Asked by Ariana on March 4th, 2022.
A: A contract is legally binding document, whereas Terms of Reference (ToR) is a document providing details and directions for a project or an appointed body. A contract outlines obligations and expectations of each party, and what will happen in the event that one or both parties do not comply. On the other hand, ToR outlines the objectives, scope and outcomes of a project or body, and can be used as a tool to ensure that all stakeholders are on the same page.

Example dispute

Suing a Company for Breach of Contract

• Identifying and citing the relevant terms of reference (TOR) in the contract
• Establishing that the company has breached the agreement by not performing their obligations as defined by the TOR
• Demonstrating the financial or other losses incurred by the plaintiff as a result of the breach
• Seeking an injunction or other court order requiring the defendant to adhere to the TOR
• Seeking damages or other financial remedies for the losses incurred by the plaintiff as a result of the breach
• Seeking legal costs associated with bringing the suit and any appeals if necessary

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