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. The work itself arrives as statements of work or purchase orders underneath it. Read both in diligence. 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.