When a Signature Isn't a Promise: Why Memoranda of Understanding Don't Bind

By Michael J. Tyler

There is a comforting illusion that surrounds the signing of any official document. Pens are uncapped, hands are shaken, flags stand in the background, and cameras record the moment as though something irrevocable has just occurred. But not every signature carries the weight it appears to. The memorandum of understanding, or MoU, is the clearest example of a document that looks binding and, in most cases, simply is not.

What an MoU actually is

A memorandum of understanding is a record of intentions. It sets out what parties say they hope to do, the framework within which they hope to do it, and the direction they expect their relationship to take. What it generally lacks is the one ingredient that turns a document into a contract or a treaty: the intention to create legal obligations enforceable against the parties.

In contract law, agreements bind when there is offer, acceptance, consideration, and, crucially, an intention to be legally bound. In public international law, treaties bind because states intend them to and submit to the framework of obligation that international law provides. An MoU typically signals the opposite intention. It is the diplomatic and commercial equivalent of saying, "we are serious, but not yet committed." Courts and tribunals look to the substance and the intention behind a document rather than its title, but the very choice to call something a "memorandum of understanding" is usually evidence that the parties wanted flexibility instead of enforceability.

This is not a flaw. It is the point. Parties reach for an MoU precisely when they want to record progress without surrendering their freedom to walk away.

The Islamabad Memorandum: a case study in non-binding language

The recent agreement between the United States and Iran illustrates this perfectly. In June 2026, the two countries signed a memorandum of understanding to end the war, establishing a 60-day extension of the ceasefire to negotiate the final terms of a deal. Formally titled the Islamabad Memorandum, it was brokered by Pakistan and signed remotely by President Trump and Iranian President Pezeshkian.

Read past the ceremony, and the document tells on itself. The agreement was explicitly characterised as a framework rather than a settlement, an initial framework and not a final peace agreement. Its own structure builds in the expectation that the real obligations come later. The parties undertook to negotiate and reach a final agreement within a maximum period of sixty days, extendable by mutual consent.

Notice what that clause does. It does not resolve the dispute; it commits the parties to try to resolve it. An agreement to negotiate is the legal opposite of a binding settlement. The substantive questions, including Iran's nuclear program, its uranium stockpiles, sanctions, and the ballistic missile issue, were left open and parked for talks during the ceasefire window.

The most revealing provision sits at the very end of the document. According to the published text, the final deal would be endorsed by a binding UN Security Council resolution. The drafters reserved the word "binding" for a future instrument, the resolution, and pointedly did not apply it to the memorandum itself. The MoU is the scaffolding; the binding obligation is meant to be erected later, through a different legal instrument with the formal force the MoU lacks.

Why parties choose non-binding instruments

If MoUs don't bind, why sign them at all? Because non-enforceability is a feature, not a defect, when you need it.

They let adversaries de-escalate without conceding. A ceasefire framework lets both sides stop fighting while preserving their negotiating positions and their exit. They allow movement where a binding treaty would be politically impossible, since domestic ratification, legislative approval, and constitutional constraints can all be sidestepped because nothing yet obligates anyone. And they build trust incrementally. Each side performs, observes the other performing, and only then commits to the harder, enforceable terms.

The Islamabad Memorandum shows the shadow side too. Within days of signing, the limits of a non-binding instrument were on display. A fresh threat of military action surfaced over the Strait of Hormuz, despite the document's own pledge that the parties would refrain from the threat or use of force. A binding treaty breach triggers legal consequences and remedies. An MoU breach is, in the first instance, just a broken understanding. The remedy is diplomatic, reputational, or military, but rarely legal.

The lesson

The enforceability of an agreement is determined by the parties' intention to be bound, not by the solemnity of the signing or the title on the cover page. An MoU records a shared direction of travel. It is a statement of "we intend to," not "we are obligated to." Anyone relying on one, whether a government, a business, or a counterparty, should read it for what it is and not for what the ceremony suggests.

When the parties to the Islamabad Memorandum reserved the word "binding" for a future Security Council resolution, they told us everything we needed to know about the document they had just signed. The signatures were real. The obligation was deferred.

A signature, in the end, is only as binding as the parties intend it to be.