We have seen an increase in what is termed a Master Service Agreement or MSA and we thought it may be a great topic to discuss as it may be the type of contract your business needs to use to secure those valuable clients.
WHAT IS A MASTER SERVICE AGREEMENT?
This is one of the most common contractual agreements used in open-ended situations where one company is required to work on one or more projects or continuously order products with another company.
A master service agreement would often be signed in the event where two parties agree to adhere to most of the terms and regulations that govern a certain project or projects as deemed necessary.
Having and signing an MSA is a great option if your clients want you for projects rather than on a retainer. The reason it is so beneficial in this regard is because it eliminates the need for signing a new contract each time your client returns to you for your assistance on another project.
BECOME THE GO-TO FOR YOUR CLIENTS
The Master Service Agreement also means that your clients are more likely to treat you as the go to person for any project that they need completed purely because they know that you have all the necessary legalities in place.
If you’ve ever worked with public sector or larger organisations then you know the drill. You send your contract out, it gets passed between various people. Then lands on the desk of someone in the Legal Department. You then let out a big sigh as you know they are likely to pull it to shreds and negotiate on various clauses. This not only takes time but also delays the start of the project. We all know how extremely frustrating it is to deal with the back and forth in communication trying to get a contract signed.
Once the MSA is agreed and signed it will sit there in a filing cabinet or cloud storage. All that’s needed to agree a project or order products is a “booking/call off” form. This is usually a one-page document that refers back to the MSA to ensure it’s binding. It will include some really important points which are crucial.
Having the legal documents in place from the beginning is always important and at K&K Legal Consulting we cannot stress this point enough.
Always be sure to get legal advice and an outsider perspective before you commit to anything within the MSA.
WHAT TERMINOLOGY DO YOU FIND IN AN MSA?
An MSA is basically like any other contract. It should contain the boilerplate clauses. Whilst also tailored to the specific relationship between you and your client. These are some of the most common clauses:
- Business ethics
- Obligations of both parties
- Corporate social responsibility
- Dispute resolution
- Geographic location
- Intellectual property ownership
- Product warranties and general indemnities
- Payment terms
- Liability
- Jurisdiction
If you include these important clauses in the MSA then you and your client are covered, regardless of the type of project you work on together.
WHO IS MOST LIKELY TO US A MASTER SERVICE AGREEMENT?
Almost any organisation can use a Master Service Agreement. Do you have repeat clients that come back to you time and time again? Then you should consider whether an MSA is right for you.
Having an MSA in place is also ideal if you work with public bodies or much larger companies. Those organisations that are more likely to have an in-house legal team.
WHY WOULD YOU CHOOSE AN MASTER SERVICE AGREEMENT?
The main reason many businesses make use of a Master Service Agreement is purely for convenience. It saves time and money because less negotiations are needed. Everything is already agreed in the MSA.
A Master Service Agreement also means that you can add as much information and criteria in the contractual agreement but in broader terms and without too much overload and irrelevant details.
ALWAYS SEEK LEGAL ASSISTANCE
As with any contractual agreements, we always recommend you have a legal consultant or someone who knows the law to assist you in drafting of a Master Service Agreement.
At K&K Legal Consulting we have drafted Master Service Agreements for various industry sectors. We are able to assist you in drafting a bespoke MSA designed specifically for your business.
As your legal go-to we would walk you through how the Master Service Agreement works. Be there for you throughout the process and beyond for any questions that may crop up. We will also draft the “call-off/booking form” to use alongside the MSA. It is crucial to include certain elements in the form.
If you think an MSA would be beneficial to your business, get in touch with us and we will happily discuss your requirements.