Table of Contents
What are the steps?
- Create a Master Services Agreement
- Issue a Statement of Work
If you are looking to hire a consultant for a series of projects, the process is different to simply hiring a consultant and drafting a consultancy agreement. In this case, you need a master services agreement, which is a contract between two parties agreeing to the terms for doing future transactions without repeated negotiation.
What is the purpose of a Master Services Agreement?
A master services agreement helps save time for both parties. It’s a useful contract to simplify work contracts as it details the expectations of both parties and settles most details and expectations up front. The master services agreement will detail the services and state what each group has to do to honour its end of the deal.
In general it deals with:
- Delivery requirements
- Dispute resolution
- Intellectual property rights
- Payment terms
- Work standards
- Indemnification: Where one party safeguards the other party against the damage made by another party.
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Why do I need a Statement of Work?
Once master services agreements are signed, they are followed by a “Statement of Work” that specifies a more detailed breakdown of tasks that need to be performed.
Items that should be included in a statement of work include:
Purpose of the project: This includes the overall purpose of starting the project, end goals, opportunities, and threats.
Scope of work: A well-defined statement of work should contain a detailed scope of work that explains what work needs to be done in order to complete the project on time. Breakdown of processes and work schedules can increase productivity inside an organization.
Location of work: This includes the location or physical workplace where the work should be done.
Detail about the task: This includes explaining more detail about the task which has already been identified in the scope of work.
Deliverables: This includes the outcome of the project which is also known as deliverables. List down every single detail about the deliverables like due date, quantity, size, etc.
Price and Payments: This includes the price and payments that are associated with the project. The payment plans, the total price of the project, and the final value of the project should be answered properly in a statement of work.
Deadlines: This is the final or due date to finish the project.
Governing law: As conflicts may arise between parties regarding the statement of work, a clause that set out the governing law that will be applicable to the dispute can help in informing the parties on their rights and the possible legal actions that can be taken to settle any dispute that may arise between them.
For example, a business working in the digital marketing field can hire an SEO freelancer by signing a master services agreement, which covers all the aspects like payment terms and deadlines, deliverables, protection of intellectual property rights, etc. After starting the work, both parties can sign a “Statement of Work” which describes the task that needs to be performed on a regular basis in a detailed manner. Importantly, within the statement of work, it should be made clear that this statement of work is made under the master services agreement.
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Client case study
Richard Hobbs from Brand New Vision uses Zegal to appoint a consultant for a series of projects. Zegal helped him simplify the process of negotiating new contracts between parties.