While the terms “master agreement” and “contract” are sometimes used interchangeably, there are subtle distinctions between the two. A master agreement is a broader agreement that sets the framework for future transactions or engagements between parties. It establishes the core terms and conditions that will apply to subsequent contracts. On the other hand, a contract is a specific agreement that is executed based on the terms outlined in the master agreement. Contracts address the specific details of a particular project, transaction, or engagement.
Think of the master agreement as the foundation or umbrella under which contracts operate. It sets the general terms, while contracts focus on the specific details and scope of each individual project. Master agreements streamline the negotiation process by eliminating the need to renegotiate common terms for every contract, saving time and effort.
