Use contract hierarchies to organize and view related contracts, to combine (or compound) pricing terms across selected contracts, and to roll up accumulated spend amounts throughout the hierarchy.

The hierarchical type of a contract indicates its role within a hierarchy. A standalone contract is not currently in a hierarchy, although it can be changed into a master agreement or subagreement.

Once a subagreement has been approved, you cannot change its parent.

After a release order, direct receipt or direct invoice has been made against a contract, its hierarchical type cannot be changed.

Each contract hierarchy starts with a single master agreement. It is the parent to the first level of subagreements in its hierarchy.

A subagreement can use a different supplier than its parent agreement uses.

If a standalone contract is added to a contract hierarchy as a subagreement, all previous release orders or reconciled invoice amounts will accumulate to the parent agreement as long as the accumulator settings are also set to do so in the contracts.

Ariba Contract Compliance lets users organize related contracts into hierarchies of individual agreements. At the top of each hierarchy is a master agreement.

When creating a contract, indicate whether it is part of a contract hierarchy by assigning it to one of three possible hierarchical types:

• Standalone - This contract cannot be part of any contract hierarchy.
• Master agreement - This contract is the top of its hierarchy. Accumulated amounts from its subagreements can be rolled up to the master agreement if set up to do so.
• Subagreement - This contract is a child contract underneath a parent agreement in the contract hierarchy.

Subagreements

If specifying a subagreement, you must choose an approved contract as its parent agreement. The parent agreement can be the master agreement at the top of a contract hierarchy or another subagreement, and it must be in the same partition, or be a global contract.

The subagreement must have a contract type that is the same or more specific than its parent agreement's contract type:

A subagreement always has one parent agreement directly above it in the hierarchy, but can itself be a parent to one or more subagreements below it in the hierarchy.