3 Things Every Master Services Agreement Must Have

150 150 Abe Wehbi

By Abe Wehbi
abe@jayaramlaw.com

Founders, we have now reached that wonderful time where your Company has launched, and is the services you provide are sought after. Now, a potential Customer contacts you, and it requests a Master Service Agreement (MSA), and you are scratching your head wondering what that is, and why that is important. No worry, here are a few pieces of information that you should know:

A MSA is when you and the Customer agree to a contract that will settle most details of the relationship, and all expectations that come with. The MSA will state what you and the Customer have to do to honor the arrangement, and will also show which services apply, generally. Overall, the goal of the MSA is to make the contract process faster, and make future contract agreements simpler.

Accordingly, every MSA must touch on the following 3 things (of course, there are plenty more provisions that are required, but these are really important):

  1. Reference to Statements of Work

As discussed above, the MSA governs your entire relationship with the Customer. With that said, and since each service provided to the Customer may differ in scope, payment terms, and timelines, your MSA should reference an applicable Statement of Work (SOW) to be governed by the MSA, which will set forth all of the terms that change service to service (scope, cost, time lines, etc…). It is important for your MSA to point to these SOWs so that as new work orders come in, you do not find yourself back at square one revisiting an already agreed upon MSA.

  1. Who owns the Intellectual Property Rights in the Deliverables and/or Service

Since you are providing services or implementing something that the Customer will be using in its day-to-day activities, it is incredibly important to clearly lay out which party owns the rights in the IP of such Deliverables and/or Services, and how those can be used. This will eliminate any confusion down the road with regard to you offering similar services or deliverables at a later time.

  1. Limitations on Liability

Since the Customer will be using the Services and/or Deliverables, it is especially important to clarify, in the event of a lawsuit, which party is responsible for what actions.

With this in mind, it is important to have a lawyer draft an MSA that fully encompasses the terms above, among others, so that you can go out and grow the business without being bogged down by issues that could and should be dealt with at the outset of the relationship.

 

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