A Statement of Understanding is a legal document that defines and clarifies the business relationship between two parties. It outlines each party’s responsibilities and expectations, and serves as an agreement to ensure mutual understanding. This document establishes the terms, conditions and goals in order to prevent any future misunderstandings or disputes. By signing a Statement of Understanding, each party agrees to be bound by its terms. With this document in place, both parties can enter into a productive business relationship with confidence and clarity.