The essential difference between a treaty and a declaration of intent is applicability. Contracts occur when two or more parties intend to create a legally binding agreement. The parties enter into contracts after an offer has been made, based on what has been done. Contractors are legally required to comply with the terms of the agreement. If the contract is terminated, the parties may face legal consequences. (vii) Reform – the terms of the contract are amended to reflect what the parties actually intend to terminate. Under U.S. law, an agreement is often the same as a Memorandum of Understanding. Indeed, it is virtually impossible to distinguish between a Memorandum of Understanding, a Memorandum of Understanding and a Declaration of Intent on the basis of American jurisprudence. All communicate an agreement on a mutually beneficial goal and the desire to see it until completion. The applicability of a statement of intent therefore depends on the intent of the parties.
If the parties do not want to make their agreement legally binding, the courts will not apply the document. However, if the parties intend to make the agreement legally binding, the courts may decide that the parties have in fact entered into a contract. The title of the agreement/agreement should reflect the nature of the transactions between the parties. The Supreme Court found that, regardless of whether the protocol had been transformed into a full-fledged agreement, the parties had agreed to submit to arbitration all disputes arising from and relating to the MoU. Such an agreement would in itself constitute a separate and independent agreement. In the absence of a consensus on the appointment of a single arbitrator, it would be open to the parties to invoke Section 11 of the Act. For this reason alone, the Supreme Court overturned gujarat HC`s order and appointed a single arbitrator because of the existence of a valid arbitration agreement. However, unlike treaties, a declaration of intent is not intended as a legally binding agreement. As a result, the parties can generally avoid the agreement without legal consequences.