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What is an MSA Agreement?
A Master Service Agreement (MSA) is a legal contract that defines the basic terms and conditions that will govern future transactions or agreements between a service provider and another entity. MSA agreements are helpful to parties to the contract, including clients, because they make it easy to do business together by providing a clear pathway and structure to create new agreements.
In this article, we will go over why an MSA agreement is important, what it should include, and how it is different from a statement of work. Then, we’ll offer some helpful advice that you can you if you still need help.
Why Use an MSA Agreement?
Master Service Agreements (MSAs) are legally binding agreements between two or more parties that lay the groundwork for future agreements or transactions. When companies have ongoing relationships with clients or other entities, MSAs make it easier to enter contracts and can also speed up contract negotiations.
Here are some of the benefits master services agreements offer:
- Makes the contract process straightforward
- Sets a foundation for expectations of all parties
- Allows companies to plan for the future
- Gives parties more time to respond to contract proposals since the basic details are already in place
- Saves time and money
- Allows for more flexibility in long-term business relationships
- Gives specific instructions on what to do in the event of a missed deadline, property damage, missed payment, and more.
Check out this article to learn more about why MSA agreements are useful.
What Should an MSA Agreement Include?
When you create a Master Service Agreement (MSA), several major areas must be addressed. Ensuring that your agreement is as complete as possible will help streamline business processes, maintain healthy relationships between all parties to the agreement, and set a solid foundation for an ongoing partnership.
Here are the top areas that must be covered in any successful MSA:
Management of Products and Projects
Master service agreements should state who is responsible for delivering and receiving products, who will take care of them, and how they will be handled. Project management information determines who will make sure any project stays on track to meet deadlines and what steps can be taken if anything goes awry.
Financial Guidelines
An essential part of any project is what makes the world go round: money. An MSA should clearly state when payments are due, how they will be taken, and what happens if a late payment occurs. This portion of the contract should also state who is responsible for keeping track of payments.
Insurance Information
Insurance is a vital part of project protection and cannot be overlooked. Remember to include details about who provides insurance, who pays for it, and what the coverages are in your MSA. Don’t forget to mention what the penalties are if insurance premiums are not paid.
Project and Product Protection
No matter how well you plan, things can go wrong. Having a process set up for backup funding and escrow is a great way to protect all parties to the contract. Make sure your agreement has specific details about who is responsible for these.
Scope of Work
Including details about the scope of work such as what work is to be done, who will do it, and how long it will take is a great way to keep everyone informed and on the same page. Placing information about this in the master service agreement clearly defines party responsibilities, which will make the relationship more productive in the long run.
Subcontractors
From time to time, you may need the help of a third party, such as an independent contractor , to complete a project, so it is a good idea to include this in the MSA. Make sure all the rules and guidelines regarding how this type of individual will be hired, what standards they are held to, and who is responsible for keeping the project in check.
Indemnification Clause
An indemnification clause is a liability clause that serves to shift the potential of liability from one party to another. Make sure it is clear who is liable for things like damages, penalties, and lawsuits.
Non-Solicitation Clause
A non-solicitation clause makes it illegal for one company to steal employees or partners from another. Including this in your MSA protects your workforce from being poached by a competitor. It is worth noting that the enforceability of a non-solicitation clause may vary based on jurisdiction.
Force Majeure Clause
If a natural or unavoidable event happens that causes damage or would otherwise cause parties to violate one or more terms of a contract, the force majeure clause removes liability from parties. This is essential to protecting businesses when unforeseen circumstances arise that cannot be prevented, like an act of nature such as a hurricane or a tornado.
Dispute Resolution Clause
Dispute resolution clauses provide important details about processes and requirements needed to resolve disputes between parties. They help make it easier to resolve conflicts, paving the way for stronger business relationships.
Change Orders
There are times when the scope of work on a project must be modified. This could be due to requests from a client or other unforeseen circumstances. A change order gives specific instructions and processes to be filed if the scope of work must be modified.
Termination Clause
A termination clause tells parties what actions could result in termination, who is responsible for payment and how much, penalties for early termination, and more. Termination clauses are important to ensure that all parties receive fair treatment at the end of their working relationship.
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Master Services Agreement vs. Statement of Work
Although a master service agreement (MSA) and a statement of work might sound the same, there are several key differences that you should be aware of. Luckily, the list of differences is short and easy to understand.
Master Service Agreement
A master service agreement is a comprehensive contract that includes most of the important basic details that govern contracts and is meant to govern ongoing relationships. It includes high-level details about business relationships and serves as an overview for business partners to base their relationships on.
However, an MSA is not as detailed as a statement of work.
Statement of Work
A statement of work is a meticulously detailed contract between parties that are completing a project together. Unlike an MSA, a statement of work only governs the terms of an agreement on a single project at a time. Statement work contracts are supplemental to master service agreements since they provide all the details that an MSA does not.
Who Writes an MSA Agreement?
If you need help with writing an MSA agreement, business lawyers can help. Don’t risk going into a project unprotected with no foundation for a healthy ongoing business relationship. Post a project on ContractsCounsel today to get connected with business lawyers who specialize in master service agreements. All lawyers in the CC network are vetted and peer reviewed for you to explore before hiring.
Meet some of our MSA Agreement Lawyers
Amber M.
Amber Masters has over 9 years of experience as a contracts attorney, helping small businesses with an array of agreements, such as purchase agreements, master service agreements, and employment contracts. She has an extensive background in employment agreements for dentists, doctors, and other health care professionals. She is a highly rated and acclaimed estate planning attorney and personal finance expert, who has been featured on CNBC, NBC, and Yahoo Finance. She successfully launched and sold a fintech startup and can empathize with the issues small and mid-size businesses face. Licensed in Oklahoma and Arizona.
Michael M.
www.linkedin/in/michaelbmiller I am an experienced contracts professional having practiced nearly 3 decades in the areas of corporate, mergers and acquisitions, technology, start-up, intellectual property, real estate, employment law as well as informal dispute resolution. I enjoy providing a cost effective, high quality, timely solution with patience and empathy regarding client needs. I graduated from NYU Law School and attended Rutgers College and the London School of Economics as an undergraduate. I have worked at top Wall Street firms, top regional firms and have long term experience in my own practice. I would welcome the opportunity to be of service to you as a trusted fiduciary. In 2022 I was the top ranked attorney on the Contract Counsel site based upon number of clients, quality of work and top reviews.
Rhea d.
Rhea de Aenlle is a business-savvy attorney with extensive experience in Privacy & Data Security (CIPP/US, CIPP/E), GDPR, CCPA, HIPAA, FERPA, Intellectual Property, and Commercial Contracts. She has over 25 years of legal experience as an in-house counsel, AM Law 100 firm associate, and a solo practice attorney. Rhea works with start-up and midsize technology companies.
Kimbrelly K.
Attorney Kegler has been licensed to practice law in the State of North Carolina since 1998. Over the years, she has worked in firms that focused on small business financing, initial startup formation, to starting several businesses of her own with bootstrap financing to venture capital funding. As a Certified Dream Manager, she couples the skills of listening to understand the big picture to get to solutions that not only fit today's needs but also the long term needs of her entrepreneurial clients.
Karl D. S.
Karl D. Shehu, has a multidisciplinary practice encompassing small business law, estate and legacy planning, real estate law, and litigation. Attorney Shehu has assisted families, physicians, professionals, and people of faith provide for their loved ones by crafting individualized estate and legacy plans. Protecting families and safeguarding families is his passion. Attorney Shehu routinely represents lenders, buyers, sellers, and businesses in real estate transactions, researching and resolving title defects, escrowing funds, and drafting lending documents. To date, Attorney Shehu has closed a real estate deal in every town in Connecticut. As a litigator, Attorney Shehu has proven willing to engage in contentious court battles to obtain results for his clients. While practicing at DLA Piper, LLP, in Boston, Attorney Shehu represented the world’s largest pharmaceutical companies in multidistrict litigations filed throughout the United States. He has been a passionate advocate for immigrants and the seriously injured, frequently advising against lowball settlement offers. He is willing to try every case to verdict, and he meticulously prepares every case for trial. Attorney Shehu began his legal career as a consumer lawyer, utilizing fee-shifting statutes to force unscrupulous businesses to pay the legal fees of aggrieved consumers. For example, in Access Therapies v. Mendoza, 1:13-cv-01317 (S.D. Ind. 2014), Attorney Shehu utilized unique interpretations of the Trafficking Victims Protection Act, Truth-in-Lending Act, and Racketeer Influenced and Corrupt Organizations Act (RICO) to obtain a favorable result for his immigrant client. Attorney Shehu is a Waterbury, Connecticut native. He attended Our Lady of Mount Carmel grammar school, The Loomis Chaffee School, and Chase Collegiate School before earning degrees from Boston College, the University of Oxford’s Said Business School in England, and Pepperdine University School of Law. At Oxford, Karl was voted president of his class. Outside of his law practice, Attorney Shehu has worked to improve the world around him by participating in numerous charitable endeavors. He is a former candidate for the Connecticut Senate and a parishioner of St. Patrick Parish and Oratory in Waterbury. In addition, Attorney Shehu has written extensively on the Twenty-fifth Amendment and law firm retention by multinational firms.
November 4, 2022
Cherryl M.
I am a U.S. lawyer (licensed in California) and have recently relocated to London. I hold a bachelor’s degree in Political Science from the University of California, Berkeley and a Juris Doctor law degree from the University of California, Hastings College of the Law. I have extensive experience in providing legal services and support in areas of business, labor & employment, IP enforcement (patent infringement, copyright & trademark), and other litigation matters; Reviewing, drafting, and editing business and legal documents/contracts; Conducting legal research and analysis, drafting memorandums, pleadings, discovery, document review, various motions, mediation briefs, and other litigation related activities; Reviewing and preparation of templates, policies, and processes for compliance with laws and regulations; educating and advising on legal and compliance issues.
November 3, 2022
Myron M.
For over 20 years Myron E. Mims Esq. has provided legal and consulting services to small and medium sized businesses. Mims served as regional counsel for a real estate investment and development firm where he managed the Company’s contract execution and management, and dispute resolution affairs. Mims was responsible for oversight and risk management of all legal affairs, including management of a robust litigation docket consisting of a seven figure, multi-party construction lawsuit, and multiple vendor and tenant disputes. Mims prepared new contract docs and implemented execution and management processes that lead to the reduction of litigation. As a managing partner of Nixon Mims, LLP Mims provided legal and consulting services to clients of that consisted of real estate, construction, telecommunications, media and food industry businesses. Mims routinely assisted clients with developing corporate governance and management protocols, strategic planning initiatives, and advised clients in the negotiation and execution of complex business transactions. Mims routinely provided operational oversight and technical analysis for management. During this period Mims obtained firsthand experience of the access to capital impediments and challenges that growth-stage businesses face.
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