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.