ContractsCounsel Logo

Master Services Agreement

Clients Rate Lawyers on our Platform 4.9/5 Stars
based on 7,608 reviews
Home Types of Contracts Master Services Agreement

Jump to Section

Need help with a Master Services Agreement?

Create a free project posting

What Is a Master Services Agreement?

A master services agreement, or MSA, is a contract that two parties enter into during a service transaction. The agreement explains the expectations for both parties. A master services agreement is a broad contract that allows the parties involved to understand:

  • Major points of the deal
  • Expectations
  • How conflicts and other issues should be handled

What Are the Goals of a Master Services Agreement?

The MSA simplifies the negotiation process when drafting new contracts between the parties, allowing everyone to proceed with an overall understanding of how they should work together. It should state what each party must do to honor their side of the agreement. The overall goal of a master services agreement is to make the contract process faster and simplify future contract processes.

What Should a Master Services Agreement Include?

When you are drafting an MSA, you will want to focus on a few main points:

  • What will your company do?
  • What will the other company do?
  • What will both parties do together?
  • What are the responsible issues either party might face?

By listing these details, you will help both parties honor their side of the agreement. It is essential to decide potential issues in advance as there are many possible problems that could arise. For example, a third-party vendor could go bankrupt and derail your agreement. That's why it is so important that both companies in the MSA account for any potential pitfalls.

The MSA should include several key components depending on the details of your project, including:

  • Background checks: If you have any requirements for employees, the MSA should list this.
  • Confidentiality: The parties to the agreement can agree they will not share any company secrets with outside parties. Here is an article about confidentiality agreements between businesses.
  • Delivery/installation: State when a product will ship and who will be responsible for setting up the first shipment.
  • Dispute resolution: A master services agreement should outline how the parties will resolve a conflict should issues arise.
  • Escrow: If either party is placing money in a trust, you should use the MSA to explain the circumstances that will allow the other party to earn that money. Here is an article about escrow.
  • Geographic location and government requirement: Parties should agree upon where employees will do the job. Deciding where to work on a project has implications for city, state, and federal taxes.
  • Insurance: Agree ahead of time on how you will handle insurance expenses and coverage.
  • Intellectual property: The MSA can cover intellectual property rights. The parties can decide how they will handle regulation and ownership of things such as patents and other intellectual property. In some cases, the client will get all intellectual property, while in other cases, the vendor provides perpetual rights but keeps their own intellectual property and patents. Here is an article about intellectual property.
  • Liability: This contract should list which party is responsible in the event of a lawsuit should an incident occur. The master services agreement should state the party that will assume the risk.
  • Out clauses/causes for termination of the agreement: Businesses do split up, so the MSA should detail how the parties would handle this.
  • Project management: State who is in charge. Your project could easily go wrong if neither side decides who should be managing different aspects of the project.
  • Requirements for delivery: Detail who will deliver what and when these deliverables are due.
  • Security: Parties should agree on who will handle and pay for security to protect the product or project.
  • Standards for work: Define what each party considers acceptable work. When one party does not live up to work standards, it creates a common source of conflict, so clear expectations included in the MSA can help avoid future disputes.
  • Tax responsibilities: The business must decide how they will divide tax expenses and responsibilities.
  • Terms of payment: The MSA should state the estimated cost of a project along with the payment schedule. Include the projected cost as well as who is paying, when they will pay, how often they will pay, and how long payments will continue.
  • Third parties: If your project requires the involvement of more than the two parties that are creating the MSA, you should state in the MSA how the rest of the agreement applies to any third party.
  • Venue of law: A master services agreement should identify the location where a legal resolution will occur, for example, arbitration, a specific state, or federal court.
  • Warranties: Parties can use the MSA to agree upon scope and coverage of warranty.

Depending on your project, you can also use a master services agreement to cover some other areas, including:

  • Business ethics
  • Property and network access
  • Social responsibilities

Again, the goal of your MSA is to broadly explain as many details as possible. That helps your business to avoid wasting money and time in negotiations.

Advantages of Creating a Master Services Agreement

A master services agreement offers a few key advantages:

  • Faster process than standard contract negotiations: When businesses spend time creating a contract, it is often a lengthy and expensive process. Coming to a quicker deal is in both parties' best interests. A master services agreement allows you to agree to the main points, thus speeding up the process of negotiating. It's possible to write a thorough master services agreement in a few weeks or even days, which is significantly faster than most contract negotiations.
  • Protection for both parties: Even though you are not going through a typical contract negotiation, the MSA still puts an agreement in place. If a dispute happens, the agreement will decide who is at fault. It's easy to check a master services agreement, which makes the two parties less likely to take a dispute to court, again saving money and time.
  • Blueprint for future agreement: If you like the master services agreement you create, it is very easy to use as a template for negotiations in the future. Of course, each deal necessitates its own specifics, but you will have a blueprint that allows both parties to focus on important details of the discussion.

Image via Unsplash by cytonn_photography

Common Master Services Agreement Disputes

You MSA will lessen legal concerns during your negotiations, but issues can still occur between the parties. The most common disputes that happen when companies use MSAs include:

  • Failure to communicate: If one business requests updates but the other company does not respond in a timely manner, it can lead to disputes.
  • Injury or death of an employee: Unless this is clearly addressed in your MSA, parties are likely to debate who holds the blame for these kinds of incidents.
  • Missed deadlines: If one party misses deadlines, it will lead to disagreements between the parties.
  • Missed payments: This is one of the fastest ways to create conflict between parties.
  • Performance/service issues: If a product or service does not meet expected goals, conflict will likely arise.
  • Property damage: You will want to clearly address what happens in the case of property damages, as this is a common source of dispute between partner companies.

The more you plan for these potential conflicts in your master services agreement, the less likely conflicts will come up down the line.

That's why it's so important to work with an experienced lawyer when creating a master services agreement. A contract lawyer can help ensure your document covers all the necessary clauses and details.

Need help with a
Master Services Agreement?

Create a free project posting

Meet some of our Master Services Agreement Lawyers

Erdal T. on ContractsCounsel
View Erdal
5.0 (2)
Member Since:
September 15, 2022

Erdal T.

Owner, CEO and Managing Attorney
Free Consultation
New Jersey
17 Yrs Experience
Licensed in NJ, NY
New York Law School

Erdal Turnacioglu of Erdal Employment Law focuses on providing employment solutions to both employees and businesses, whether through litigation, review of employee handbooks, workplace investigations, or training seminars.

Luisa A. on ContractsCounsel
View Luisa
Member Since:
September 5, 2023

Luisa A.

Attorney
Free Consultation
Marietta, Georgia
2 Yrs Experience
Licensed in GA
Mississippi College School of Law

Luisa Alejos is the founder and owner of L.P.A. Law. She established her own firm to focus on providing clients with an exceptional level of personal service and support, trustworthy legal advice, and compassionate advocacy, consistent with her dedication to making service a cornerstone of her law practice and life. As a solo practitioner, her focus is personal injury, workers' compensation, and misdemeanor criminal defense but she also helps clients with contract drafting- particularly construction contracts and prenuptial agreements.

David B. on ContractsCounsel
View David
Member Since:
September 5, 2023

David B.

Senior Transactional Counsel
Free Consultation
SF Bay Area
27 Yrs Experience
Licensed in CA
University of San Diego

Seasoned transactional with extensive experience in the life sciences / medical device / pharmaceutical industries. Skilled at providing actionable legal advice that balances risk and reward.

Myanna D. on ContractsCounsel
View Myanna
Member Since:
September 5, 2023

Myanna D.

Business and traffic law attorney
Free Consultation
Los Angeles
15 Yrs Experience
Licensed in CA
University of Oregon School of Law

An award-winning legal researcher, attorney, and Fulbright Scholar, Myanna Dellinger, M.Sc., J.D., PhD candidate (Political Science, 2022), graduated at the top of her law school class, Order of the Coif in 2008. She then worked for state- and federal-level judges at the trial and appellate levels including the Ninth Circuit Court of Appeals. Myanna was a tenured law professor teaching business law and public international law for more than a decade. She is currently the Executive Director of the EinStrong Foundation in Pasadena, California. She assists the Foundation in identifying viable solutions to climate change and educational issues around the world. She also serves as a temporary judge for the Counties of Riverside and Los Angeles, presiding over both civil and criminal cases on an ad hoc basis. Myanna has published more than 500,000 words on climate change risks to people, corporations, governments, and ecosystems. She has been ranked at the top 10% of all authors by download on SSRN for four years consecutively. She won the “Best Legal Article of the Year” award in 2019 for an article analyzing electric utility liability for wildfires in California and EJ issues. More than 100 judges, attorneys, and scientists have cited to Myanna’s publications. See her at www.professordellinger.com.

Holly W. on ContractsCounsel
View Holly
Member Since:
September 5, 2023

Holly W.

attorney
Free Consultation
Tucson, AZ
19 Yrs Experience
Licensed in AZ
University of Arizona James E Rogers College of Law

I am a solo legal practitioner in Tucson, Arizona who focuses on Estate Planning, Probate, Business Formation and Mediation. I have expertise and experience in not only law but as a Registered Nurse and teacher. I use this background and knowledge to provide compassionate and individualized service for my clients.

Find the best lawyer for your project

Browse Lawyers Now
Business lawyers by top cities
See All Business Lawyers
Master Services Agreement lawyers by city
See All Master Services Agreement Lawyers

ContractsCounsel User

Recent Project:
Review Master Services & Subscription Agreement
Location: Colorado
Turnaround: Less than a week
Service: Contract Review
Doc Type: Master Services Agreement
Page Count: 15
Number of Bids: 3
Bid Range: $695 - $800

ContractsCounsel User

Recent Project:
MSA Review
Location: California
Turnaround: A week
Service: Contract Review
Doc Type: Master Services Agreement
Page Count: 8
Number of Bids: 9
Bid Range: $250 - $850
related contracts
See More Contracts
other helpful articles

Need help with a Master Services Agreement?

Create a free project posting

Want to speak to someone?

Get in touch below and we will schedule a time to connect!

Request a call

Find lawyers and attorneys by city