What Are Common Client Concerns in Master Services Agreements?
If you need to define the scope of work between parties, you might want to draft a Master Services Agreement (MSA) for long-term business relationships. When doing so, it’s common for businesses to express some concerns.
In this article, we cover the most common client concerns when reviewing Master Services Agreements, based on authentic project data from ContractsCounsel, where people connect with lawyers for contract review. These concerns include limitation of liability, intellectual property ownership, payment terms, exclusivity and non-compete clauses, compliance, and termination rights.
Note: Our analysis comes from ContractsCounsel’s real, anonymized Master Services Agreement review postings.
Limitation of Liability and Insurance Requirements
Concern 1: Clients usually worry about risk allocation. They seek clarity on liability restrictions, exclusions, and insurance.
How lawyers help: Your attorneys will check all liability and insurance terms in the agreement. These need to be clear and in line with risks.
Intellectual Property Ownership and Licensing
Concern 2: It’s common for clients to query deliverables and how intellectual property can be used.
How lawyers help: All ownership rights need to be clearly defined, and in sync with business or project goals. Lawyers will see to this and review licensing.
Payment Terms and Consequences of Non-Payment
Concern 3: If there are ambiguous payment terms, clients worry. They want to know how to handle late or missed payments and their consequences.
How lawyers help: Attorneys review how invoicing occurs, payment terms and processes, and what happens in the case of non-payment.
Exclusivity and Non-Compete Clauses
Concern 4: Our data shows that one of clients’ biggest concerns is terms that could hamper their working relationships with vendors and other markets.
How lawyers help: Lawyers will check the exclusivity and non-compete clauses in the agreement so that they’re fair and reasonable. They shouldn’t heavily limit future business relationships or opportunities.
Compliance and Data Protection Obligations
Concern 5: It’s common for clients to want to ensure that the agreement is compliant with industry regulations and data protection rules.
How lawyers help: Lawyers will check the agreement aligns with laws such as HIPAA and others. All legal responsibilities outlined need to be appropriately allocated between parties.
Termination Rights and Breach Scenarios
Concern 6: Clients usually want to know that they have the chance to terminate the agreement. Clarity over giving notice and what happens in early breach or termination situations is required.
How lawyers help: Lawyers will check all termination clauses. There should be mutual-exit rights in place, as well as reasonable post-termination responsibilities.
Non-Circumvention and Indemnification
Concern 7: Clients want to know that unfair practices won’t harm them or leave them responsible. They need protection from third-party claims.
How lawyers help: The lawyers will review the agreement, checking that language is clear about indemnification. They’ll look at covered claims and ensure protections are in place against circumvention.
Flexibility for Project-Specific Addendums
Concern 8: We’ve found that clients usually want to be able to expand upon their Master Services Agreement with Statements of Work or other agreements, depending on the projects or services.
How lawyers help: Lawyers will include clauses allowing this without re-negotiation processes being required.
Key Takeaways
- Our data shows clients’ main concerns include IP ownership, agreement termination, and clear payment schedules.
- A review checks legal compliance to support business growth and foster healthy work relationships.
- A lawyer checks that the Master Services Agreement is reasonable, clear, and fair for all parties.
Need help with your master services agreement?
You can post your MSA review project for free on ContractsCounsel. Every day, vetted business lawyers draft and review these agreements for clients.
