Master Agreement Between Contractor and Subcontractor
AIA Document A421–2018, Master Agreement Between Contractor and Subcontractor, is used when a subcontractor and contractor anticipate working together on multiple projects over an extended period. Instead of starting over with each new subcontract, the parties sign a master agreement that governs all subsequent subcontracts. That one agreement sets the overall terms of their relationship, and the details of each particular project are handled through individual work orders.
How It Works
The master agreement does not include a scope of work on its own. That’s where AIA Document A422–2018, Work Order for Use with Master Agreement Between Contractor and Subcontractor, steps in to cover the gap. Each work order—paired with the master agreement—creates a stand-alone subcontract that covers both the terms and the specific scope of the project. This structure makes it easy to create multiple subcontracts quickly while ensuring consistency across all transactions.
Attaching to General Conditions
Like AIA Document A401–2017, AIA Document A421–2018 incorporates, by reference, the AIA Document A201–2017, General Conditions of the Contract for Construction. If another general condition is utilized—say, AIA Document A232–2019 (Construction Manager as Adviser Edition)—the master agreement is correspondingly adjusted. The same applies if non-AIA work orders are employed; coordination is necessary to prevent inconsistency or gaps.
Benefits and Drawbacks
The largest benefits of AIA Document A421–2018 are speed and predictability. When the master agreement is signed, there’s no need to negotiate the basic terms for each future scope of work, reducing the risk of conflicting provisions. This is especially useful for contractors who share the same subcontractor on a number of different projects or phases.
Still, the approach isn’t perfect. Having to handle multiple active work orders simultaneously can produce its own administrative challenges. And since the form isn’t designed for design-build projects, it may not be suitable for situations where risk allocation differs significantly.
Customization Is Essential
As with all AIA contracts, AIA Document A421–2018 is not a ready-to-use, one-size-fits-all solution. Subcontract law varies widely by state, with issues such as lien rights, prompt payment statutes, indemnity caps, and insurance requirements often requiring adjustments. Beyond legal compliance, project-specific circumstances—unusual scopes of work, special scheduling needs, or distinctive owner needs—also need to be addressed. Close scrutiny and tailored adjustments are always necessary.
A Flexible Framework
Ultimately, AIA Document A421–2018 is a sturdy and adaptable template for contractor–subcontractor arrangements over multiple projects. It is an effective and standardized tool; yet, its real strength lies in how it can be customized to the governing general conditions, local laws, and the specific conditions of each project.
Need Help Navigating the A421 Master Agreement?
Whether you are a contractor looking to streamline repeat projects or a subcontractor concerned about fair terms, we can help you adapt the AIA Document A421–2018, Master Agreement Between Contractor and Subcontractor, to fit your needs. Reach out today for personalized guidance and legal support to ensure your agreements are fair, compliant, and tailored to your projects.
