Master agreements help set standard terms between two parties of a contractual, reciprocal agreement. The process of two parties having to repeatedly enter into a separate agreement of the same type can be tedious, time consuming and potentially detrimental to a business relationship, especially if the parties find themselves constantly revising and renegotiating agreement terms. Doing so can significantly slow down the time it takes to initiate sponsored research projects or productization of licensed inventions.
The master agreement specifically covers standard terms that apply to a particular type of transaction between two parties. These agreements set out the basic framework of the working relationship between the two parties. Emory University, specifically, negotiates master agreements that cover the terms of clinical trials, sponsored research, research tools, and confidentiality. By agreeing to standard terms upfront, the parties save a significant amount of time when a new project or engagement is initiated. With the umbrella agreement in place, a relatively short addendum, work order, or similar is executed for a specific item/project. There are some terms that need to be agreed upon for each project under a master agreement such as project scope of work, finances, and IP rights.
Master agreements themselves can cover a broad spectrum of terms; for example, indemnification, which is a part of an agreement that stipulates that one party in the agreement will absorb monetary costs for losses that a second party may incur. Other terms can be items such as termination, confidentiality, data ownership, publication and reporting.
Creating a large, comprehensive agreement is not without its pitfalls. Parties involved must be incredibly thorough and make sure that they can live with the terms, as once a master agreement has been signed off on, making changes can be difficult.
Master agreements are generally a benefit to both parties. Investigators are extremely supportive of master agreements, given they can significantly shorten the waiting time before a research project can begin. The university and company save on personnel time and resources by engaging in one extensive negotiation rather than multiple negotiations, which is a much more inefficient process. Putting several agreements under one master agreement saves time and effort while simultaneously establishing a working business relationship. Streamlining the process makes companies and institutions more willing to work with one another.
While the investment it takes to negotiate the initial agreement can be significant, once the master agreement is in place, individual agreements covering a research study or commercial license can be finalized within a matter of a few days. The time it takes to develop the initial master agreement can vary greatly and depends on the level of priority a company assigns to such an agreement, but one thing remains for sure: master agreements are almost universally appreciated and preferred in the industry.