Explanation – A Letter of Arrangement (LoA) is a formal agreement outlining the terms and conditions for a future contract between two parties, in the context of international relations or defense procurement.

Letters of Arrangement serve as a precursor to a final contract, allowing the parties to negotiate and establish the framework for their future collaboration. A Letter of Arrangement typically includes provisions on pricing, delivery schedules, and other contractual terms that will be included in the final contract.

Source: Forum IAS