Overview of a Master Service Agreement

What is a Master Service Agreement?

A Master Service Agreement is a contract between two parties, in which they have agreed to the terms for doing future transactions.

A Master Service Agreement outlines the roles and responsibilities, expectations, and requirements of involved parties for doing business.

It helps to save time and money for both involved parties as repeated negotiation is not necessary after doing a master service agreement.

What is the purpose of a Master Service Agreement?

Master Service Agreements are important for businesses that work on different dimensions of services to standardize their contract for the ease of use, saving time and money involved in drafting contracts repeatedly. Once master service agreements are signed, they are followed by a “Statement of Work” that specifies a detailed breakdown of tasks that needs to be performed. Generally, a master services agreement acts as a “head agreement” that may contain several other agreements written down on a statement of work.

For example, a business working in the digital marketing field can hire an SEO freelancer by signing a master service 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 basically describes the task that needs to be performed on a regular basis in a detailed manner. Within the statement of work, it should be made clear that this statement of work is made under the master service agreement.

What are the components of a Master Service Agreement?

These are the important things that should be included in a master service agreement.

Parties: The exact names of the parties or entities involved, who is the vendor, and who is the purchase.

Payment and deadlines: Clear information regarding the payment schedule, deadlines should be written down in the agreement.

Roles and responsibilities of involved parties: This explains the roles and responsibilities, expectations of involved parties for governing the business relationship.

Confidentiality: While doing business with any third party, it is very crucial for any organization to maintain confidentiality. So having a confidentiality clause In the MSA can help protect the official data from leaks.

Dispute Resolution: Having a master service agreement in place will protect the legal rights of both involved parties which also helps in settling down the disputes if it arises in near future.

Indemnification: It is a method in which one party safeguards the other party against the damage made by another party.

What is the difference between master service agreement and service level agreement?

A Master Service Agreement is a contract made between two or more service providers for governing their relationship and settling disputes in case it arises in the future. On the other hand, a service level agreement stipulates performance requirements for the delivery of the service.


A Master Service Agreement is a contract made between two parties for governing any future agreements or transactions in a simplified manner. Every master service agreement is followed by a statement of work that explains the key breakdown of tasks that needs to be done on a regular basis.

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