While not a legally enforceable document, the agreement is an important step because of the time and cost of negotiating and developing an effective document. To reach an agreement, the participating parties must reach mutual understanding. Each party learns what is most important to the others before moving forward. A Memorandum of Understanding (MOA) is a written document describing a cooperative relationship between two parties wishing to work together on a project or achieve an agreed goal. An MOA serves as a legal document and describes the terms and details of the partnership agreement. An MOA is more formal than an oral agreement, but less formal than a contract. Organizations can use an MOA to conclude and draw cooperation agreements, including service partnerships or technical assistance and training agreements. An MOA may be used regardless of whether or not funds should be exchanged under the agreement. But even in international situations, the CEECs are not binding. They are seen as a kind of soft law, which means they are weaker (less applicable) than traditional „hard“ laws, but always provide evidence of the intention of both parties to abide by an agreement.
Flexible laws such as the CEECs offer an attractive possibility of cooperation instead of binding treaties that can have serious international consequences if violated. Since it is not a legal document and is generally not about money or other exchanges, a Memorandum of Understanding leaves a little more leeway than a treaty. On the other hand, the more concrete you can be, the better, for a number of reasons: a Memorandum of Understanding is generally different from a treaty. It is probably not full of legalese, it is probably shorter, and it generally contains few conditions, if any, that are not directly related to the agreement itself. This often makes it easier to read and understand than a contract. Explain the consequences if one of the parties does not respect what it has agreed to. It is especially important to include those who participated in the initial discussions with the contractor – to see if he is saying what you intend to do and if it clearly covers all the specifics you want to address. In the United States, the Securities Exchange Commission has increasingly relied on companies to investigate individuals and companies working abroad in an attempt to prevent U.S. financial laws from flouting. CEECs help regulators avoid tedious contractual procedures and provide faster and more flexible means for international securities regulation. Not everyone agrees on the benefits of an agreement.
During trade negotiations with a Chinese representative in Washington in April 2019, a reporter asked President Donald Trump how long he expected the U.S. and China`s declarations of intent to continue. „I don`t like MOUs because they don`t mean anything,“ the president replied. After some discussions, it was decided that any document from the discussions should be qualified as a trade agreement and never agreed.