Master service agreement

Definition

The umbrella contract customers sign once, with each job added under it.

Why It Matters

Two layers decide the revenue: the master agreement carries the legal terms, including the assignment and change-of-control language that decides whether the book transfers in a sale at all, while the work itself arrives as statements of work or purchase orders underneath it. Read both in diligence, because a friendly master agreement over expired statements of work is a customer relationship, not a contract, and the reverse is a book that dies at closing.

In numbers: A commercial account doing $250,000 a year under a master agreement whose change-of-control clause requires consent is $250,000 that needs a signature before it is yours.