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Contractual jargon

A contractual lexicon.

Contractual documents

The contract flow can be seen as such:

Contract chart

  • NDA (Non-Disclosure Agreement)
    Before signing a contract, a NDA (Non-Disclosure-Agreement) is needed in most cases in order to save both sides interests.

  • MSA (Master Service Agreement)
    Defines how the two companies will do business together.

  • SOW (Statement of Work)
    Describes the work to be performed for the client. Note that the MSA defines the “how” and the SOW defines the “what” of the work.

  • CO (Change Order)
    Documents any changes in scope, budget, timeline, assumptions or any other deviation from the current SOW.

  • OF (Order Form)
    Describes the licensed software components to be provided to the client, normally sold as a 12 month license period.

  • PR/PO (Purchase Request/Purchase Order)
    Usually for bigger companies this is how they reconciliate internally between the working team, procurement, finance and legal. A PR is emitted (usually containing information coming from the SOW as well as cost justification e.g. detailled timesheet for T&M) and after validation a PO is received which allows us to emit the invoices.

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