Using a “Master Agreement” Structure

I’ve occasionally worked on transactions involving parties who plan on engaging in discrete projects from time to time. Generally these transactions have been structured so that one contract governs unchanging aspects of the relationship—perhaps payment, delivery, dispute resolution, and plenty of other matters—and a separate contract governs each project and specifies what needs to be done, when, and for how much money. This structure means that the general terms of the relationship aren’t subject to renegotiation every time a new project comes along. I gather that such arrangements are referred to generically as “master agreement” structures.

Seeing as I haven’t worked on master-agreement transactions very often, I’d be interested to hear any information that you think relevant. For example:

  • Are there any kinds of transactions that you think are particularly suited to this structure?
  • Do you provide that the project-specific agreements are to be attached to the master agreement, or are they free standing?
  • What do you call the master agreement and the project-specific agreements?
  • Are there any particular advantages (beyond the obvious) or disadvantages to this kind of structure?

I’d be pleased to hear from you.

About the author

Ken Adams is the leading authority on how to say clearly whatever you want to say in a contract. He’s author of A Manual of Style for Contract Drafting, and he offers online and in-person training around the world. He’s also chief content officer of LegalSifter, Inc., a company that combines artificial intelligence and expertise to assist with review of contracts.