Can this document be e-signed?

Yes. Electronic signatures are enforceable under the federal ESIGN Act (15 U.S.C. ch. 96) and UETA in most states provided intent, consent, attribution, and record retention requirements are met.

Do I need a notary or witnesses?

Generally no for a Business Statement of Understanding unless state law or the subject matter (e.g., real estate conveyance) requires notarization or witnesses. Verify requirements for the specific transaction and jurisdiction.

Who is authorized to sign on behalf of a company?

An officer, authorized manager, or other person with delegated authority should sign. Document the signer's title and confirm their corporate authority to bind the entity before execution.

What if terms change after signing?

Prepare a written amendment or replacement Statement and secure signatures from authorized parties. Avoid informal emails as sole evidence of material changes without signed confirmation.

Can I revoke or cancel a signed Statement?

Revocation depends on contract language and applicable law. For mutual agreements, execute a signed termination or rescission document; unilateral revocation may not be effective without the other party’s consent.

How should I store the signed document?

Store the final signed PDF and its audit trail in a secure, access-controlled archive. Follow applicable retention rules (IRS, HIPAA, etc.) and ensure the record is reproducible on demand.

Electronic Signature
Templates
Miscellaneous
Business Statement of Understanding

Business Statement of Understanding

This template is fully customizable. Edit the text, fill out the fields, and send it for signature. Give it a try!

BUSINESS STATEMENT OF UNDERSTANDING

This Business Statement of Understanding (the Statement) is entered into as of Effective Date: by and between:

Parties

Client Name: Client Entity Type:

Individual Corporation LLC Partnership Other

Client Address: Service Provider Name: Provider Entity Type:

Individual Corporation LLC Partnership Other

Provider Address:

WHEREAS

WHEREAS, Client Name: seeks to obtain certain services and business cooperation from Service Provider Name: ;

WHEREAS, the parties desire to set forth a mutual understanding concerning the scope, payment, confidentiality obligations and termination conditions governing their relationship prior to execution of a definitive agreement.

Scope of Work

The Service Provider shall perform the services and deliverables described below in a diligent and professional manner in accordance with industry standards:

Payment Terms

Total Compensation: $ payable in accordance with the schedule below.

Payment Schedule and Invoicing:

Invoices shall be payable within days of receipt. Overdue payments shall accrue interest and late fees as specified below.

Late Fee: . The late fee is intended as liquidated damages for administrative and collection costs and not as a penalty.

Term and Termination

Term Commencement: Term Expiration:

Either party may terminate this Statement without cause upon written notice delivered at least days prior to the effective termination date. Termination for cause may occur immediately upon written notice if the other party materially breaches any obligation and fails to cure within thirty (30) days after receipt of written notice specifying the breach and the proposed cure.

Post-Termination Obligations:

Confidentiality

Each party (the Receiving Party) shall hold in strict confidence all non-public proprietary information disclosed by the other party (the Disclosing Party) that is designated as confidential or that reasonably should be understood to be confidential given the nature of the information and the circumstances of disclosure (Confidential Information). The Receiving Party shall (i) use Confidential Information solely for the purposes of performing obligations under this Statement, (ii) restrict access to Confidential Information to employees and permitted advisors with a need to know, and (iii) not disclose Confidential Information to any third party without prior written consent of the Disclosing Party, except as required by law. Confidential Information does not include information that is or becomes publicly available without breach, is rightfully received from a third party without restriction, or is independently developed without use of the Disclosing Party's Confidential Information.

Representations and Warranties; Indemnity

Each party represents that it has the right and authority to enter into this Statement and to perform its obligations. Each party agrees to indemnify, defend and hold harmless the other party from and against any claims, liabilities, losses or expenses arising from the indemnifying party’s gross negligence or willful misconduct in connection with this Statement, subject to any limitations agreed between the parties.

Governing Law

This Statement shall be governed by and construed in accordance with the laws of the State of , without regard to principles of conflict of laws.

Entire Agreement

This Statement, together with any exhibits or attachments expressly incorporated by reference, constitutes the entire understanding between the parties with respect to the subject matter hereof and supersedes all prior oral or written agreements, negotiations and understandings. Any amendment or modification must be in writing and signed by authorized representatives of both parties.

Miscellaneous

If any provision of this Statement is found to be invalid or unenforceable, the remaining provisions shall remain in full force and effect. Neither party may assign its rights or delegate its obligations under this Statement without the prior written consent of the other party, except to a successor in interest by merger or acquisition.

Client

Printed Name:

By:

Date:

Service Provider

Printed Name:

By:

Date:

What a Business Statement of Understanding Is and When to Use It

A Business Statement of Understanding is a concise written agreement that documents the parties' shared assumptions, responsibilities, and key terms before or alongside a formal contract. It typically clarifies scope, deliverables, timelines, payment terms, and who will perform specified tasks. Organizations use it to reduce miscommunication, set expectations for project phases, capture negotiated exceptions, and provide a reference for later contract drafting or dispute resolution. The document can be standalone or attached as an exhibit, and it often precedes final legal review and execution of a definitive agreement.

Why a Clear Statement of Understanding Matters

A well-drafted Business Statement of Understanding reduces ambiguity, aligns stakeholders, and documents what both parties intended at a given stage of negotiations. It shortens review cycles and helps avoid downstream disputes by recording agreed facts before detailed contracts are prepared.

Who Typically Prepares and Signs This Document

The Business Statement of Understanding is used by commercial teams, project managers, and legal or procurement personnel to capture agreed terms quickly before full contracting.

Project managers and program leads who need a written summary to guide delivery and onboarding.
Procurement and sourcing teams documenting preliminary commercial terms and supplier responsibilities.
In-house counsel or contract administrators preparing a transitional record prior to drafting the definitive agreement.

It is useful across company sizes and industries whenever parties want a clear, written record of mutual expectations without creating a final, long-form contract.

Step-by-step: Completing a Business Statement of Understanding

Follow these steps to create a clear, enforceable Statement of Understanding that can be reviewed, signed, and retained with other contract records.

01

1. Identify Parties: Enter full legal names and entity types for each party.
02

2. Summarize Scope: Describe deliverables, key milestones, and acceptance criteria.
03

3. Record Commercial Terms: State payment amounts, schedules, and invoicing procedures.
04

4. Sign and Date: Have authorized signatories sign with dated signature blocks.

How to set up an online review and signature workflow

Configure a simple review flow so each party receives, reviews, and signs the Statement of Understanding in sequence or in parallel as required.

Field	Configuration
Document Upload	Upload as PDF or DOCX with final formatting
Place Fields	Add signature, date, and initial fields where required
Authentication	Use email link or SMS code for signer verification
Routing	Set signing order or parallel signing per agreement

Typical online signing flow for this document

This sequence describes the usual sender and signer steps when completing the Statement of Understanding electronically.

Upload and Prepare: Sender uploads, adds fields, and sets authentication.
Send to Signers: Platform emails signing links or shares a secure link.
Signer Authentication: Signer verifies identity using chosen method.
Completion and Archive: Signed PDF and audit trail are generated and stored.

Technical considerations for eSubmission and storage

Ensure the chosen platform supports secure eSigning, tamper-evident PDFs, and an auditable completion certificate before sending the document for signature.

File Formats: PDF and DOCX
Access Methods: Email link, shared URL
Integrations: CRM and cloud storage compatible

Essential elements to include for a professional document

Include these components to make the Statement of Understanding operationally useful and legally clear for both parties and future contracting steps.

Parties and Roles

Clearly identify each party using full legal names, addresses, and the role or responsibility assigned to each to avoid disputes about who must perform which obligations.

Scope and Deliverables

Provide a concise but specific description of work, milestones, deliverables, and performance criteria so acceptance and change control remain straightforward.

Commercial Terms

State the exact payment amounts, billing milestones, currency, invoicing requirements, and any retainers or deposits to clarify cash-flow expectations.

Timeline and Milestones

List key dates, phased delivery expectations, and dependencies so project managers can coordinate resourcing and avoid missed deadlines.

Confidentiality and Data

Note any confidentiality obligations, data handling rules, and reference applicable controls if the parties will exchange sensitive or regulated data.

Signatures and Authority

Include signature lines with printed names, titles, and dates to confirm each signer's authority to bind their organization and to establish execution timing.

Security and compliance checklist

Encryption: TLS 1.2/1.3 in transit; AES-256 at rest

Audit Trail: Capture IP, timestamp, and signer actions

HIPAA Options: BAA available where PHI is present

Authentication: Email, SMS, or advanced methods supported

Retention Controls: Export and archive per policy

Accessibility: WCAG 2.0 Level AA support

Key legal risks and consequences to watch for

Name Mismatch: Can invalidate payment or trigger re-execution

Missing Authority: Unsigned or unauthorized signature may be unenforceable

Incomplete Scope: Leads to disputes or scope creep claims

Improper Retention: May violate regulatory recordkeeping obligations

Data Breach: Could trigger HIPAA or state breach reporting

Failure to Disclose: Consumer-facing items may require ESIGN disclosures

Common preparation mistakes to avoid

Using shorthand or informal names instead of full legal entity names that appear on formation documents can create enforceability questions.
Leaving dates or milestone windows vague (for example, 'within a reasonable time') creates interpretation disputes and delays.
Failing to state payment currency and invoicing procedure causes payment processing delays and can trigger penalty clauses.
Not verifying signer authority before circulation can mean completed documents are unenforceable and require costly re-signature.

Typical timing and review expectations

Set clear internal timelines for review, execution, and distribution to keep projects on schedule and reduce administrative delays.

Provide on Request:

Statement supplied when a contracting party requests written confirmation

Internal Review:

Allow 3–10 business days for legal and procurement review

Execution Window:

Sign within the effective-date window specified in the document

Distribution:

Deliver signed copies to all parties within 1 business day

Recordkeeping:

Archive signed record per retention schedule immediately

eSignature vendor comparison for signing and storing this document

Basic capability comparison and starting prices for common eSignature providers. signNow is listed first as the reference vendor in the table below.

	signNow	DocuSign	Adobe Sign	PandaDoc	HelloSign
Starting Price	$8/user/mo	$15/user/mo	$14/user/mo	$19/user/mo	$15/user/mo
Free Trial	7-day free trial	Varies by plan	Varies by plan	Varies by plan	Varies by plan
Bulk Send	Yes (Business Premium)	Yes	Yes	Yes	No
Audit Trail	Yes	Yes	Yes	Yes	Yes
HIPAA Compliant	Yes	Yes	Yes	No	No

Frequently asked questions about the Business Statement of Understanding

Answers to common questions about execution, electronic signing, authority, and recordkeeping for this document.

Need help? Contact support

Can this document be e-signed?
Yes. Electronic signatures are enforceable under the federal ESIGN Act (15 U.S.C. ch. 96) and UETA in most states provided intent, consent, attribution, and record retention requirements are met.
Do I need a notary or witnesses?
Generally no for a Business Statement of Understanding unless state law or the subject matter (e.g., real estate conveyance) requires notarization or witnesses. Verify requirements for the specific transaction and jurisdiction.
Who is authorized to sign on behalf of a company?
An officer, authorized manager, or other person with delegated authority should sign. Document the signer's title and confirm their corporate authority to bind the entity before execution.
What if terms change after signing?
Prepare a written amendment or replacement Statement and secure signatures from authorized parties. Avoid informal emails as sole evidence of material changes without signed confirmation.
Can I revoke or cancel a signed Statement?
Revocation depends on contract language and applicable law. For mutual agreements, execute a signed termination or rescission document; unilateral revocation may not be effective without the other party’s consent.
How should I store the signed document?
Store the final signed PDF and its audit trail in a secure, access-controlled archive. Follow applicable retention rules (IRS, HIPAA, etc.) and ensure the record is reproducible on demand.

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