At a glance
- A framework agreement sets the baseline terms for repeat orders between businesses.
- It creates no purchase commitment unless the contract says so.
- This guide covers private agreements under Finnish law; public procurement follows separate rules.
What is a commercial framework agreement?
A framework agreement sets the terms for future transactions between businesses: prices or the pricing method, delivery and payment terms, liability, and who may place orders. Individual orders can then be handled by email or through an ordering system without negotiating the same terms again. Whether the framework itself creates a purchase commitment depends on its wording.
In Finnish, you may see the terms puitesopimus, runkosopimus or kehyssopimus. In English, “framework agreement” and “master agreement” are common; service businesses also use “master services agreement” (MSA). The agreement’s effect depends on its content, not simply its title. There is no separate Finnish act governing commercial framework agreements.
Does a framework agreement create an obligation to buy?
Not necessarily. A framework can set the terms for future orders without requiring the buyer to place any. Individual transactions are then agreed through the ordering and acceptance process set out in the contract, against the background of the Contracts Act’s rules on offer and acceptance. A supplier should check the buyer’s actual commitments before offering prices based on expected sales volumes.
A framework can include a purchase commitment, but it needs clear wording. A minimum-purchase term can commit the buyer to a defined quantity or value over a specified period. An exclusivity term can restrict purchases from competing suppliers within an agreed scope. These commitments affect the buyer’s freedom, so the parties should negotiate their limits and commercial benefit, such as a lower price. A price concession is not itself a legal requirement for a binding commitment.
Key terms: pricing, liability and managing the relationship
A workable framework agreement has three layers.
Pricing
A price list or pricing principle is the easy part; change is the hard part. Set out why the price may rise, how often, with what notice, and to which index or cost factor an increase is linked. Without a mechanism, every cost spike becomes a negotiation in which each party has its own view.
Risk
This layer covers delivery dates, the consequences of delay, defects, complaint deadlines and liability. An agreed delay penalty can reduce the need to prove the amount of loss, while a clear complaints procedure helps avoid uncertainty about timing. A liability clause should specify which losses are covered, any monetary cap and the exceptions to it. A cap linked to a defined period’s fees is one possible approach, not a statutory default. Address deliberate misconduct and gross negligence expressly; do not assume that a broadly worded limitation will protect a party in every situation. The clause must also be assessed against applicable law and the circumstances of the agreement.
If confidential pricing or volume information will be shared during negotiations, put suitable protection in place before disclosing it. A separate NDA can do this before the framework is signed. The framework can also contain confidentiality terms, including appropriate obligations that continue after it ends.
Managing the relationship
The third layer keeps the arrangement coherent over time. Agree its duration, renewal and termination rights. Set a document hierarchy: which prevails if the framework, order, annex and general terms and conditions (guide in Finnish) conflict. Also agree the dispute forum and governing law. Where the Finnish Sale of Goods Act applies, it generally fills gaps unless the agreement, established practice or binding trade usage provides otherwise (section 3). International sales may instead fall within the UN Convention on Contracts for the International Sale of Goods, so the applicable rules should be checked separately.
How do standard terms become part of the agreement?
A supplier’s general terms are often intended to be included through one sentence: “X’s general terms in force from time to time apply to this agreement.” The case law of the Supreme Court shows that the sentence alone does not decide the issue.
In KKO 2001:126, a retention-of-title clause in standard terms formed part of the contract even though those terms had not been attached to the order confirmation. The buyer signed three weeks after receiving the document, had a sufficient opportunity to review the industry terms referred to, and could not regard the clause as surprising in light of the payment terms. The decision also refers to KKO 1993:45 as a contrasting case. The lesson is not that any reference will suffice: the opportunity to review the terms and the circumstances in which the agreement is made matter.
The practical conclusion fits in one sentence: attach the terms, or provide them demonstrably before signature, and include an order-of-precedence clause for conflict between the framework and the standard terms.
How is a public-procurement framework different?
A framework arrangement (puitejärjestely) governed by section 42 of Finland’s Act on Public Procurement and Concession Contracts follows a separate procurement regime. It sets terms for contracts to be awarded during a specified period. The framework is generally limited to four years, unless its subject matter justifies a longer duration, and the procurement documents must identify the participating contracting entities and the maximum quantity or value. Different procurement regimes, such as utilities procurement, have different duration rules.
For a supplier, the important distinction is that the parties cannot freely renegotiate the framework as they might a private commercial agreement. Material changes are generally prohibited without a new procurement procedure unless a statutory ground permits the change. The stated maximum is not, by itself, a promise to buy that amount.
The Finnish word puitesopimus has three uses
In search results and everyday speech, the term occurs in three senses. Only the first is the subject of this article.
A business-to-business framework agreement is the trading structure described above.
Employment arrangements need separate assessment. Under chapter 1, section 11 of the Employment Contracts Act, a variable working-hours term includes an arrangement in which an employee undertakes to work when separately called. An employer may not initiate such an arrangement where the labour requirement it covers is fixed. A genuinely non-binding arrangement for discussing future work may instead be followed by separately agreed employment contracts, but the title “framework agreement” does not decide the issue. The actual obligations and employment-law requirements, including those governing fixed-term contracts, must be considered. The guide to zero-hours contracts (in Finnish) discusses the distinction.
The third use is the European social partners’ Framework Agreement on Telework of 2002. It concerns employment, not a framework for commercial orders. An employer and employee should clarify their own telework arrangements (guide in Finnish) in light of the applicable employment terms.
When I do not recommend a framework agreement
For a one-off project, a service agreement (guide in Finnish) or a sale agreement may be more suitable. A commercial framework should not be used to bypass employment obligations. Agreeing a long-term framework too early can also commit both parties to terms before they understand what the relationship will require.
The right moment is usually clear in practice: several orders have already been placed, both parties want to continue, and terms scattered across email threads have started to take on a life of their own. That is when it is worth building the framework—before the first disagreement, not afterwards.
Framework agreement drafting: fees and scope
I draft framework agreements from €450 plus VAT. We agree on a fixed fee once the scope is clear, and confirm the timetable before work begins. Drafting includes one agreed round of comments and the finalised document. During the initial assessment, I will also explain if a simpler agreement would suit your needs. See the contract services page for the available services and starting prices.
Frequently asked questions about framework agreements
What is the difference between a framework agreement and a master agreement?
They can describe the same document. In Finnish, puite-, kehys- and runkosopimus are used. The English equivalents are framework agreement and master agreement. Legal effect comes from the content, not the heading.
How long should a framework agreement last?
An open-ended agreement with a notice period of three to six months is one option for an ongoing commercial relationship. The appropriate term depends on the commitments and investments involved; it is not a statutory default. Frameworks governed by section 42 of the Public Procurement Act are generally limited to four years, unless the subject matter justifies a longer term. Other procurement regimes have their own rules.
Can an individual order depart from the framework agreement?
In a private commercial relationship, the parties can agree a departure. The framework should explain how this is done and who has authority to approve it. An express approval requirement and a clear document hierarchy help prevent accidental departures and later disputes.
What if one party does not comply with the framework agreement?
Depending on the agreement, applicable law and nature of the breach, remedies may include requiring performance, a price reduction, damages or termination. Not every remedy is available for every breach. The guide to breach of contract (in Finnish) covers remedies in more detail.
Is a separate NDA needed in addition to a framework agreement?
Not always. Confidentiality terms in the framework may be sufficient and can continue after it ends. If confidential information will be shared before signature, put suitable protection in place first: a separate NDA is one way to do that.
Sources
- Act on Public Procurement and Concession Contracts (1397/2016), Finnish text, sections 42 and 136 — framework arrangements and contract modifications. See also the Finnish Public Procurement Advisory Unit’s framework-arrangement guidance (in Finnish).
- Contracts Act (228/1929), Finnish text, section 1 — binding effect through offer and acceptance; section 36 — adjustment of an unreasonable term.
- Employment Contracts Act (55/2001), Finnish text, chapter 1, section 11 — variable working-hours terms and limits on their use at the employer’s initiative.
- Sale of Goods Act (355/1987), Finnish text, sections 3 and 5 — freedom of contract and separate rules for certain international sales.
- KKO 2001:126 (in Finnish) — incorporation of standard terms assessed in light of the opportunity to review them and the circumstances of the agreement; the decision compares KKO 1993:45.
- UNCITRAL: CISG status and declarations — international sales and Finland’s participation in the convention.
- European social partners’ Framework Agreement on Telework, 16 July 2002 — an employment-context use of the term.
Finnish source last updated: August 2026. This guide provides general information and is not a substitute for advice on your specific situation.
