Master Service Agreement

Master Service Agreement is an agreement or contract between two or more parties that underlines the basic terms of the contract or agreement. One of the main differences that govern this form of agreement from other forms of agreement is that the Master Services Agreement will have major clauses that will gov..

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Master Service Agreement - An Overview

An MSA is an abbreviation for Master Service Agreement. Such an agreement or contract will be between two or more parties where the parties mutually agree that the terms of the MSA will govern future or prospective agreements.

Objectives of a MSA (Master Service Agreement)

The following are the objectives of a Master Service Agreement:

Objectives of a MSA (Master Service Agreement)
  • Simplifies the Contract
  • Advanced Negotiations
  • Less Time
  • Simplifies the Contract

    Through usual negotiations in a MSA, the parties would not have to go back on the terms of the agreement. These terms and major clauses can be utilised from the agreement.

  • Advanced Negotiations

    The parties would have negotiated in advance related to the terms and conditions of the Master Service Agreement.

  • Less Time

    By negotiating the terms and conditions in advance, the parties can prioritise their time in other areas of the law.

Is it Necessary to Have a Master Service Agreement?

  • A master services agreement is drafted in advance by the parties in order to avoid any form of negotiations between the parties of the contract.
  • If one party makes a breach of the agreement, then that party would only have to indemnify the other party.
  • Through the master service agreement, both the parties would not be liable to the breach that is caused. Hence this offers some form of legal indemnification to the parties.
  • It also delineates and separates the risk of the parties in the contract. Both the parties agree on respective terms in a MSA.

Benefits of having a Master Service Agreement

There are different forms of benefits of having a Master Service Agreement:

  • Helps Avoiding different form of disputes between two or more companies.
  • Reduces the Amount of Litigation
  • Improves the Negotiating process between parties
  • However, the MSA protects both the parties in the agreement
  • If there is a dispute between the parties then the MSA would come into handy
  • Future negotiations can be carried out through the Master Service Agreement
  • Usually through this agreement, both the businesses can save lot of time and money.

Clauses in a Master Service Agreement

The following clauses are present in the Master Service Agreement:

  • Confidentiality
  • Dispute Resolution
  • Jurisdiction
  • Geographic Location
  • Payment Clauses
  • Intellectual Property
  • Venue of Law
  • Warranties and Guarantees
  • Standards of Work
  • Confidentiality

    Confidentiality is one of the main provisions which have to be present in the MSA. This will include the provision that the companies would not share any confidential information with other parties. This will include any form of trade secrets and intellectual property which belong to the company.

  • Dispute Resolution

    In this clause it will include the method of dispute resolution chosen by the parties. If the dispute wants to be settled the method of dispute will also be mentioned in the MSA.

  • Jurisdiction

    This clause would contain which courts would handle the agreement if there is some form of dispute. Usually the agreement will have a clause that the dispute would be subjected to the courts of a particular region.

  • Geographic Location

    In the MSA the tasks which have to be carried out would be stated here.

  • Payment Clauses

    Here the agreement would stipulate what payment is required to be carried out by the companies as per the requirements of the contract.

  • Intellectual Property

    This clause would deal with the aspects related to possession of the intellectual property which is dealt by the parties.

  • Venue of Law

    Venue of Law would be the same clause such as the jurisdiction of the dispute or the suit or proceedings. This clause would be similar to the jurisdiction clause.

  • Warranties and Guarantees

    For a particular type of product and service, there will be particular different forms of warranties and guarantees. Warranties would be related to the products which are offered or the services offered. Guarantees would be in the form of a third-party assurance for the services provided or the products delivered during the MSA.

  • Standards of Work

    Usually in the Master Service Agreement, there would be specific standards of work which has to be carried out in the agreement. If the standards of work fall below the particular standards, then it would lead to some form of disputes. However, if the standards are maintained by the parties then there will be no disputes.

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Frequently Asked Questions

Master Service Agreement is an agreement or contract between two or more entities to agree on the terms for future agreements. By entering into a master services agreement, the parties would agree on major terms.

The MSA would be the same as a contract. However, there are particular stipulations which do not allow future litigations to occur through the MSA.

The main purpose of a MSA is to ensure that the terms of the contract have been agreed on by the parties. It basically avoids any form of misunderstandings.

Usually the parties of the master service agreement would start with negotiating the terms. It is important to contact a lawyer while drafting the same. However, reviewing the agreement is crucial before coming to the final draft.

Usually drafting a Master Services Agreement would take about a week. The main intention of this form of agreement would depend on the negotiation.

The Master Service Agreement is called an MSA or a Service Level Agreement (SLA).

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