What is the book of the covenant that Moses read? Clearly Moses is talking about reading the Torah. But not all of the Torah, for most of the events written in the Torah had not come to pass.
Parshat Mishpatim contains one of the most pivotal statements in the entire of Torah: "Naaseh v’nishma - we will do and we will hear." The phrase is spoken as a response by the children of Israel after Moses had read the book of the covenant before them:
And he took the Book of the Covenant and read it within the hearing of the people, and they said, “All that the Lord spoke we will do and we will hear.” (Ex. 24:7)
The Torah refers to the "Book of the Covenant." Of course, the "Book of the Covenant" is none other than the Torah. However, of the 613 commandments given at Mt. Sinai, only a fraction of those mitzvoth had been received by the Jewish people by the time the reader gets to chapter 24. A total of 53 mitzvoth are contained in parshat Mishpatim, and a few more were given even before the fledging nation arrived to Mt. Sinai e.g. New Moon (Rosh Chodesh), Shabbat, and circumcision (B'rit Millah). Despite not having a comprehensive understanding of the Torah as a whole, the Jewish people obligated themselves to the instructions of God come what may. Hence their response to Moses in the doubly imperfect: "Naaseh v’nishma - we will do and we will hear. It is noteworthy that Israel did not say, "we will hear and we will do" i.e. "we will act when we understand." Rather, the implication of the response is that the Israelites will act first, and then understanding will follow.
The response of the people represents a very basic principle in Jewish thought: Loving God means that we do what he asks. We may not understand the commandment, neither may we understand the covenant. Regardless, we follow his commandments although we may not understand them initially. Thus, one comes to understanding through the doing of mitzvoth.
The observance of the mitzvoth is always imperative whether we understand them or not. In doing them, there in lies two implicit components of observance: First, the commandment must be done by the nation of Israel, properly. In order for the doing of the commandment to be valid, it must be done with all Israel. Not doing the commandment with all Israel nullifies the command. It is called pasul, i.e. the observance is invalid. Second, the commandment must be performed with the right heart. Not performing the commandment with the right heart makes the observance pigul, also invalid. (There is a distinction in Hebrew, between the two different types of invalidity - Pasul is invalidity by incorrect observance, pigul is invalidity due to wrong motivation in the observance).
The doing of the commandments does not require understanding. Rather, understanding comes through the observance of the mitzvot and through study. The level of understanding the mitzvot will vary between people. A young child may understand less, and an elder sage may understand more. The understandings in each case do not affect their observances so long as the observance is neither pasul nor pigul. It is not necessary to be a Torah scholar to observe the mitzvot. People with learning deficits may certainly observe the mitzvot as fully and is completely as any sage. It is always good to strive to understand the mitzvot, but the understanding is not a requirement of the observance: "We will do and we will hear."