Letter of Understanding Template – Format, Sample & Example

Letter of Understanding (LoU) or Memorandum of Understanding (MoU) is a formal letter that contains text which states an agreement between two parties. This is an official agreement on paper about the negotiation that has been made either verbally or just via an unofficial manner. It is a letter that sums up various terms that a contract has undertaken in some regard, which could be a project, service or a deal. A letter of Understanding not only contain about the words of agreement but also state about specific roles, responsibilities and other, if any, important detail (example, Compensation) that is involved during the agreement.

Format of Letter of Understanding

Any official letter always comes in a standard format that put its value to some standard and put it in an aligned manner. It is always convenient for people to understand and trust a note on paper if it is organized and in a well format that include all the necessary information and seal and signature.

The following format is recommended to write a letter of understanding:

Main heading stating ‘Letter of Understanding’

Name and address of the referred Person


Body of the letter [that explains all the statements that sums up the terms of the undertaking these two parties are agreeing on]

You can mention some important highlighted minutes of meeting as per the discussion earlier.

[State any condition, if any]

Signature and Seal

How to write Letter of Understanding?

This is such a letter that we don’t write every day and hence we understand your curiosity that how to write a letter of understanding? But no worries, like any other letter it is also just a matter of putting some good words in a well synched manner.

Here in this article, we are providing you with a few tips that can make this job easier for you. 

  • Put a title as main heading, i.e. Letter of Understanding
  • Include Name of concerned person, their address and Date of writing
  • Write body of the letter that explains the reason of you writing this letter
  • In a smart manner, explain the job to be performed
  • You can also identify milestones, benchmarks and various timelines, if any
  • Don’t forget to mention about the agreement upon revision, if required
  • You can mention how this agreement is in force by stating a government law or your company policy
  • Add a non-disclosure/ confidentiality promise statement, if required
  • Include signature and mark seal
  • Before finalizing, it is recommended that you send a rough draft the other party to check if they agree or not. 

Sample Letter of Understanding with Examples 

We hope that you are enjoying this article. After having given a few tips, we are putting a few examples of letter of Understanding just to make it easier for you. Also, more samples are available with us on our page. 

Letter of Understanding and Agreement

Mr. James Evam
Hanstem Zone, Manager
New York, USA

Dated: 11 Jan 2018

Dear Mr. Evam

This is to make the final and formal agreement upon the desire of working together that we showed in our previous meetings. As per this agreement, we are agreeing on providing you with facility of using our available hall on the 7th floor of our official building called Zoner Place, for the purpose of music and meditation activities. It is on condition that any damage in the available facilities in the hall will be your responsibility and you will be contacted in case of any discussion, if required.

We value your amazing foundation and hence are agreeing on this deal for the sake of welfare of our employee and people. 

We hope that you agree with our statement. If you still have some doubt, please make it clear to us before we finalize it on official paper. 

Thank you

Mr. Emmanuel Sean
Director, Zoner Place
New York City, USA

Letter of Understanding Between two Parties

Letter of Understanding for Partnership
[Contact detail]


University of XYZ
Main Street, 1234 Q
Ohio, USA

(Collectively called as the ‘Partners’)

For the Project entitled:  [abc] (‘Project’)

Date: [WXY]

The main purpose of this Letter of Understanding (“LOU”) is to state and confirm the together interest and belief from each partner organization to formally involve and work in the proposed Project as a team.

This LOU also state text about the agreement by the Partners with the various goals of the Project, its anticipated benefits, methodology, administrative structure, and this desire to foster an environment of frank communication and exchange of information. 

This LOU is, although not intended to be bind legally and so it does not create or provide any binding obligations or commitments between the Partners.

Attached is the copy of rules and terms and conditions that need to be followed from section AB to YZ. 

Thank You!

AGREED by the Parties through their authorised signatories:

Signatures with Date

Business Letter of Understanding

Mr. Mark
YT Steel Corporation

Dated: 23/01/2019

This is the letter of Understanding between YT Steel Corporation located at Ohio State of USA and Plannum Builders that state official terms of the undertaking that these two partners have decided upon. These parties have decided to work together on the terms based upon contracts with benefits divided in equal share that applicable from 15 September 2017.  

Following are the abiding rules and conditions that they have been agreed on to proceed with the business deal. 

This letter of understanding is bound to state an official statement about its legal association as well. Attached is a copy of the details on the partnership regulation and laws it is bind to. 

Signature and seal of both the Partners.

Letter of Understanding Template in PDF and Word Format

Letter of Understanding

PDF Word

Business letter of understanding

PDF Word

We hope that you find this article beneficial and useful. For more samples, please visit out page. 

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