Master Services Agreement
A Master Services Agreement covers the terms to be applied for a range of work commissioned as part of an ongoing relationship between a supplier and a customer.
5.0 (3 reviews)
Last updated December 19, 2024
Under 30 minutes
Suitable for Australia
Written by
Edwin Montoya Zorrilla
Reviewed by
Damin Murdock
Document Overview
A Master Services Agreement (MSA) is a contractual document that outlines the terms and conditions governing future transactions or agreements between two parties. The intention of such an agreement is to expedite and simplify future transactions or service engagements, avoiding the need for lengthy negotiations every time.
An MSA outlines the general legal terms such as dispute resolution process, payment terms, intellectual property rights, confidentiality, and liability issues among others. It provides a comprehensive, standardised framework for future business interactions, while leaving enough flexibility for the specifics of each individual project or transaction (like precise scope of work, delivery timelines, etc.) to be separately outlined, typically separate agreements often known as Statements of Work, that will be subject to the provisions of the MSA.
Creating an MSA can be beneficial to parties that anticipate an ongoing business relationship. It can save time, simplify business operations and service delivery, and reduce uncertainties resulting from legal complexities. For businesses in industries like technology, consulting, and professional services, an MSA serves as a framework that streamlines their workflow and strengthens their client relationships.
Why do I need a Master Services Agreement?
Why can’t I just have a different contract each time I provide a service, you ask.
Well, the short answer is you can. However, the benefits of having a Master Service agreement for ongoing work outweigh writing up a new contract each time.
Still not convinced? Here are the benefits
- The term ‘master’ intends to be a standard agreement, covering all different kinds of services you provide to your clients
- The Agreement is broad so that you can cover adhoc and unique services
- A Master Services Agreement is efficient and will save you the hassle of drafting a new contract if you have an ongoing business development with an existing client
- If you provide a range of services, it will be a good idea to standardise your terms and conditions for use
- You can simplify future agreements and future contracts
- It will secure revenue streams
- It will protect your liability
- It helps prevent disputes arising throughout the term of the entire Agreement as an early form of dispute resolution
- It will simplify the contract negotiation process with your client
The Legal Risk Score of a Master Services Agreement Template
Our legal team have marked this document as low risk considering:
- Changes in the scope or execution of the agreed services require formal amendments through a Change Order, which may delay project timelines or increase costs if not managed promptly.
- The document allows the Supplier to assign or transfer its rights under the agreement without the Customer's consent, potentially introducing new parties that the Customer has not vetted.
- The Supplier's liability for data protection breaches is capped, which might expose the Customer to higher risks and potential losses if the Supplier's actions lead to significant data breaches.
Overall, this document provides a structured framework for service delivery but places considerable reliance on formal procedures for changes and problem resolution, which could introduce delays or administrative burdens. Users familiar with such agreements might find this document to provide clear expectations and responsibilities, though the flexibility in Supplier's rights and capped liabilities could introduce some risk considerations.
Master Services Agreement Checklist
Complete your free Master Services Agreement with our checklist
Ensure Proper Execution
Ensure that the document is signed by authorised representatives of both parties to legally bind them to the terms of the agreement.
Verify Details and Compliance
Review all schedules and annexures to ensure that they are complete and accurate as per the agreed terms, and comply with applicable laws and regulations.
Manage Change Orders Effectively
Establish a clear process for initiating and approving Change Orders to manage scope changes efficiently and keep the project on track.
Maintain Open Communication
Set up regular communication channels and meetings to discuss project progress, potential issues, and compliance with the agreement to ensure smooth execution and adherence to contractual obligations.
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