The Dividing Line: Master Agreement v. Statements of Work
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Given that organizations often enter into several similar commercial agreements over time, corporate counsel often seek efficient means to streamline the drafting and negotiation of these agreements. When a buyer will be purchasing goods or services over time from a seller, a familiar approach is to put in place a master agreement that contains global terms under which individual statements of work (commonly referred to as “SOWs” or, alternatively, as work or service orders) may be executed for specific goods or services as they are ordered.
This common document structure necessarily involves identifying which concepts are more appropriately addressed in the master agreement and which in a specific SOW. Allocating risk between parties across multiple documents—some of which are executed together and some of which might be negotiated and executed in the future—while also trying to avoid both leaving any significant risk unaddressed and creating any contradiction or inconsistency, can be a thorny task. The following are a few considerations for structuring deal documents across a master agreement with SOWs.
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