In the course of drafting a master agreement, you should always consider including a provision that allows for the termination of a statement of work (“SOW”) separate from the termination of the master agreement.  Since a master agreement allows you to commence several projects under one agreement through the issuance of SOWs, the ability to terminate any SOW without actually affecting the master agreement itself is ideal.  In circumstances where a termination of SOW provision is not included in the master agreement, unless otherwise addressed by the parties in the master agreement, termination of the master agreement will also terminate any SOW issued under such agreement (potentially, jeopardizing outstanding projects under other SOWs).  Overall, a termination of SOW provision provides you with the flexibility to terminate a specific SOW without having to terminate the master agreement and undertake the monetary expense and time required to the draft and/or renegotiate a new master agreement.

This entry was posted on Wednesday, March 18th, 2009 at 4:21 pm and is filed under Agreements, Contracts, Procurement. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.