The project management agreement is the agreement between the project manager and the employer or owner. The project manager acts as the agent of the owner and provides the services usually rendered by a contractor who performs the tasks.
A contract is needed for the agreement which obligates the project manager and even the contractor to provide the specified deliverables. It also obligates the project owner to pay for the rendered services. The agreement will never be legal without the contract. The task can be simple or complex depending on the nature of the product or services. For bigger organizations, a delegate is asked to sign the agreement on behalf of the organization it represents. This is called delegation of procurement authority.
The legally binding nature of the contract indicates that it is subjected to extensive approval processes so that the product or service will satisfy the needs identified in the contract language. The complexity of the review process of agreements also varies depending on the type of the organization. For large companies, the agreement may need to undergo public review but smaller organizations may only require the project manager and owner to review the project management contract.
This term is defined in the 5th edition of the PMBOK.