A memorandum of understanding (MOU) is an agreement between two parties in the form of a legal document. It is not fully binding in the way that a contract is, but it is stronger and more formal than a traditional gentleman's agreement. Sometimes, the term is used as a synonym for a letter of intent, particularly in private law. A letter of intent expresses an interest in performing a service or taking part in an activity, but does not legally obligate either party.
In international public law, a memorandum of understanding is used frequently. It has many practical advantages when compared with treaties. When dealing with sensitive or private issues, the document can be kept confidential, while a treaty cannot.
It can also be put into effect in a timelier manner than a treaty, because it doesn't require ratification. In addition, a memorandum of understanding can be modified without lengthy negotiations, which is especially useful, except in multilateral situations. Most transnational aviation agreements are this type of agreement.
An example of an international memorandum of understanding is the Oil For Food Program, which was created by the United Nations in 1995 and lasted until 2003. This agreement allowed Iraq to sell its oil to the world in exchange for humanitarian help, such as food and medicine for Iraqi civilians. It did not, however, allow Iraq to rebuild its military.
A national example is the Key West Agreement, also known by its official name, the Function of the Armed Forces and the Joint Chiefs of Staff. It was created in 1948 and outlined the division of air assets between the different branches of the military. While it has since been modified, this document continues to be the guideline for the division of these assets today.