Shrink's understanding (8)
I believe the answer is:
contract
This clue is a double definition.
'shrink's' is the first definition.
(contracting is a kind of shrinking)
'understanding' is the second definition.
(contract is a kind of understanding)
(Other definitions for contract that I've seen before include "Arrangement to commit murder" , "Shorten" , "Shrink from the business agreement" , "settlement" , "Become smaller" .)