Master Services Agreement (MSA)

What is a master services agreement (MSA)?

A master services agreement is a contractual arrangement between two parties outlining the agreed-upon terms for future transactions.

The MSA document delineates the roles, expectations, and responsibilities of all involved parties in conducting business dealings.

Utilising a master services agreement template can streamline the process, ensuring efficiency and consistency across all future transactions, effectively saving time and resources as repeated negotiations become redundant.

What is the purpose of a master services agreement?

Master services agreements play a crucial role for businesses operating across various service dimensions, providing a standardised contractual framework that promotes ease of use while saving both time and money in contract drafting.

A Statement of Work is typically introduced after establishing a master services agreement. The statement of work document provides a comprehensive breakdown of the specific tasks.

Essentially, the master services agreement is the overarching “head agreement,” encompassing various subordinate agreements detailed within the Statement of Work.

For instance, a digital marketing company may employ an SEO freelancer through a master services agreement, encompassing crucial aspects such as payment terms, deliverables, deadlines, and the safeguarding of intellectual property rights.

After initiating the work, both parties would sign a Statement of Work outlining the regular tasks to be undertaken in detail and affirming its creation under the terms of the master services agreement.

What are the components of a master services agreement?

A master services agreement should encompass the following key elements:

• Parties: Identifying the involved parties, specifying the vendor and the purchaser.
• Payment and deadlines: Providing explicit details regarding payment schedules and deadlines.
• Roles and responsibilities: Outlining the expectations and responsibilities of all parties in managing the business relationship.
• Confidentiality: Including a confidentiality or NDA clause to safeguard sensitive information and prevent data leaks.
• Dispute resolution: Establishing mechanisms for resolving potential disputes and protecting the legal rights of all parties.
• Indemnification: A provision ensuring that one party protects the other against potential damages.

What is the difference between a master services agreement and a supply of services agreement?

While a master services agreement governs the overarching relationship between service providers and sets the stage for dispute resolution, a supply of services agreement explicitly outlines performance requirements and delivery standards for the services provided.

Do master services agreements expire?

Master services agreements inherently do not have an expiry date; once established, the parties can continue their relationship for years without the need to renegotiate or revisit the agreement’s terms.

Create an MSA template with Zegal

A master services agreement, enhanced through an MSA template, facilitates a streamlined and efficient process for governing future agreements and transactions between parties.

By utilising a robust MSA template, you pave the way for smoother negotiations, more precise expectations, and a solid framework that safeguards the interests of all parties involved.

Don’t leave the success of your future business dealings to chance. Secure your position and protect your interests with a comprehensive master services agreement from Zegal. 

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About Author

Daniel Walker

Daniel Walker is the Founder and Chief Executive Officer of Zegal, the trusted legaltech firm. Prior to founding Zegal, Daniel practised at DLA Piper, Stephenson Harwood and Clyde & Co, in Hong Kong, Singapore, and the UK.

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