Framework Agreements

A framework agreement is an agreement that includes the general terms applicable to a certain category of agreements, such as delivery or service agreements. While a framework agreement sets forth generally the terms for cooperation, project or order specific terms are, on the other hand, agreed upon in the individual agreements. Where terms for cooperation have been agreed upon in a framework agreement, it is possible to keep individual project or order specific agreements simple, without need to renegotiate same terms for each delivery. A frame agreement does not commit a company to enter into any future agreements – instead, it is used to agree upon game rules for future purposes, and general terms used in individual agreements.

The terms of a framework agreement will automatically apply to individual project and order specific agreements between the parties that are within the scope of the framework agreement. There is no requirement of reference or other link between the agreements. However, often the agreements include a provision regarding application of a framework agreement between the parties. On the other hand, if the parties do not wish to apply the framework agreement, or any term thereof, to an individual agreement, a provision to such effect must be included in the agreement, if the framework agreement, pursuant to its terms, otherwise would apply to the said agreement.