Since the Memorandum of Understanding between the United States and Iran was made public on June 17, 2026, the mainstream press has ignored one of its major flaws. Because of the incompetence of the press, it is unclear whether this flaw is the result of bad policy-making or bad lawyering, or both. At the heart of this flaw is the question: What if no final deal is made? Paragraph nine of the MOU states:
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Pending the final deal, the United States of America and the Islamic Republic of Iran agree to maintain the status quo. The Islamic Republic of Iran will maintain the current status quo of its nuclear program, and the United States of America will not impose any new sanctions and will not deploy additional forces in the region.
Without a mutual extension of time, the parties have 60 days to make a final deal because paragraph three of the MOU states: “The United States of America and the Islamic Republic of Iran commit to negotiating and achieving the final deal in maximum 60 days, extendable with mutual consent.”
The major flaw in paragraph nine arises if neither party violates the MOU and no final deal is made. “Status quo” means the current situation. If no final deal is made, the United States and Iran “agree to maintain the status quo.” The MOU was signed by the parties on Sunday, June 14, 2026, in what appears to be a ceremonial electronic signing, with formal physical signing on June 17, 2026. The “status quo” cannot be referring to the situation as it existed on June 14 or June 17 because the MOU requires the situation to be drastically changed from those dates forward. The “status quo” of June 14 and 17 is gone and each day brings a new situation. The “status quo” only can be referring to a situation at a later date. But it is unclear what date that is. Because the MOU requires certain things to happen upon signing, the status quo that the parties “agree to maintain” includes substantial benefits for Iran.
As stated in paragraph nine, the status quo will include the absence of “any new sanctions” by the U.S. and the absence of “additional forces in the region.”
The status quo will include the absence of the U.S. naval blockade against Iran, as stated in paragraph four:
Immediately upon the signing of this MOU, the United States of America will begin the removal of its naval blockade and any disturbances or impediments against the Islamic Republic of Iran and will fully end the naval blockade within 30 days. During this period, the traffic of vessels will be in proportion to the numbers of pre-war traffic being restored by the Islamic Republic of Iran. The United States of America further undertakes to remove its forces from the proximity of the Islamic Republic of Iran within 30 days after the final deal.
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The status quo will include “immediate” U.S. “waivers for the export of Iranian crude oil, petroleum products and derivatives, and all associated services, including banking transactions, insurances, transportation, etc.,” as stated in paragraph 10:
The United States of America undertakes that immediately upon the signing of this MOU, and until the termination of sanctions, the U.S. Department of Treasury will issue waivers for the export of Iranian crude oil, petroleum products and derivatives, and all associated services, including banking transactions, insurances, transportation, etc.
Because of paragraph nine, if neither party violates the MOU and no final deal is made, the U.S. cannot impose “any new sanctions” upon Iran, cannot put “additional forces in the region,” cannot maintain the U.S. naval blockade against Iran, and must grant “waivers for the export of Iranian crude oil, petroleum products and derivatives, and all associated services, including banking transactions, insurances, transportation, etc.” There is no restriction in the MOU on how Iran can use the billions of dollars it will accumulate under these circumstances, except for the restriction on procurement or development of nuclear weapons. There is nothing in the MOU barring use of the billions for ballistic missiles or chemical or biological weapons or for payments to Hamas, Hezbollah, the Houthis, or any other Islamic terror organization. There is nothing in the MOU obligating Iran to allow unfettered inspection and monitoring of sites that can be used in the nuclear production cycle. If neither party violates the MOU and no final deal is made, Iran benefits and the United States suffers.
I don’t know the extent of any legal advice our diplomats may have received when drafting the MOU or the identity of any lawyers they may have consulted. But I know that at this point, they had better call Saul.
Allan J. Favish is an attorney in Los Angeles. His website is allanfavish.com. James Fernald and Mr. Favish have co-authored a book about what might happen if the government ran Disneyland, entitled “Fireworks! If the Government Ran the Fairest Kingdom of Them All (A Very Unauthorized Fantasy).”
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