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What is the difference between a Lookup Relationship and a Master-Detail Relationship in Salesforce?
- In a Master Detail, when the master is deleted the child records are deleted. Whereas, in a Lookup the child records are not deleted when the parent is deleted.
- You can have roll up summary fields on a Master object in a Master-Detail relationship, whereas you do not have that ability in a lookup.
- You can use the Master-Detail relationship to create a Many:Many relationship between two objects by creating a junction object.
- Both Lookup and Master-Detail are 1:n (1:Many)
Source: http://www.salesforce.com/us/developer/docs/api/Content/relationships_among_objects.htm