Master Service Agreement (MSA) Provisions

A Master Service Agreement (MSA) is a contract that outlines the terms and conditions governing the relationship between a party who is engaging a second party to provide a service. MSAs are used when the parties anticipate an ongoing business relationship that will likely span multiple projects. MSAs are common in IT support, cloud services, or software development, where ongoing services are delivered over time. Parties involved in software development or maintenance projects and technology consulting services also commonly use MSAs as part of their engagement. Here are some of the important provisions typically included in an MSA:

1. Scope of Services - Defines the nature of the services to be provided. It often refers to detailed statements of work (SOWs) that will outline specific tasks or deliverables for individual projects.

2. Payment Terms - Specifies the pricing structure, invoicing methods, payment schedule, and any late payment penalties. It may include details on how costs will be calculated, such as fixed fees or time and materials and whether travel costs are reimbursable.

3. Responsibilities and Obligations - Outlines the roles and responsibilities of each party, ensuring clarity on who is responsible for various tasks or deliverables.

4. Confidentiality - Establishes how confidential information exchanged during the relationship will be handled, including non-disclosure agreements (NDAs) and restrictions on sharing sensitive data.

5. Intellectual Property (IP) Rights - Specifies who retains ownership of any intellectual property created during the term of the agreement. This provision addresses whether the client or service provider will own the IP associated with the work product, software, or any other deliverables.

6. Liability and Indemnification - Defines the extent of each party’s liability in the event of damages, losses, or claims. It also includes indemnification clauses, where one party agrees to compensate the other in the event of specific claims (including third-party claims), liabilities, or losses arising during the contract's performance.

7. Warranties - Provides assurances that the services or products will meet specified quality standards. It can include performance guarantees, service level agreements (SLAs), or remedies if services are unsatisfactory.

8. Term and Termination - Defines the duration of the agreement, renewal terms, and conditions under which either party can terminate the contract. It also details the obligations of the parties after termination, such as payment for services rendered up to the termination date.

9. Assignment or Transfer - Provides clarification on whether and under what conditions either party can assign or transfer their rights or delegate their duties under the MSA to third parties.

These MSA provisions help to provide clarity, reduce misunderstandings, and protect both parties throughout their long-term working relationship, particularly in complex, ongoing service arrangements. For questions about MSAs, please email Wei Wei Jeang at wjeang[at]fultonjeang.com.