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Child Contract: In procurement, a child contract is a subordinate agreement derived from a parent or master contract. It inherits terms and conditions from the master contract but can contain additional specific provisions tailored to a particular transaction or project. This structure is used to simplify contract management by maintaining consistency while allowing flexibility to address specific needs or changes in scope.
Key Benefits
– Streamlined Contract Management: Child contracts facilitate seamless management by creating dependent agreements from a master contract, ensuring consistency and compliance across multiple agreements.
– Enhanced Compliance: They ensure that all sub-agreements adhere to the terms outlined in the master contract, significantly reducing the risk of errors or non-compliance with overarching contractual terms.
– Simplified Amendments: Adjustments or amendments to the master contract automatically cascade to all child contracts, simplifying the update process across related contracts.
– Centralized Contract Control: Enables centralized monitoring and control of all related agreements, providing better oversight and coordination within complex contracts.
– Flexibility in Negotiations: They allow organizations to tailor specific terms and conditions at a more granular level across different child contracts, catering to the unique needs of each sub-agreement while maintaining alignment with the main contract.
Related Terms
– Streamlined Contract Management: Child contracts facilitate seamless management by creating dependent agreements from a master contract, ensuring consistency and compliance across multiple agreements.
– Enhanced Compliance: They ensure that all sub-agreements adhere to the terms outlined in the master contract, significantly reducing the risk of errors or non-compliance with overarching contractual terms.
– Simplified Amendments: Adjustments or amendments to the master contract automatically cascade to all child contracts, simplifying the update process across related contracts.
– Centralized Contract Control: Enables centralized monitoring and control of all related agreements, providing better oversight and coordination within complex contracts.
– Flexibility in Negotiations: They allow organizations to tailor specific terms and conditions at a more granular level across different child contracts, catering to the unique needs of each sub-agreement while maintaining alignment with the main contract.
References
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