Master Services Agreement
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What it is
Use a Master Services Agreements for multi-phased projects or services.
Your Master Services Agreement is your services contract with your client. It describes the services that will be completed for the client and the conditions attached to those services. Having a Master Services Agreement makes your working agreement clear from the beginning, which not only helps to avoid disagreements or even formal legal disputes later, it also makes it easier to work together. Here are the main topics in a Master Services Agreement:
- Services that will be done, which are described in a Statement of Work
- Payment terms
- Insurance requirements (if any)
- Ownership of the services and intellectual property, like the copyright and other intellectual property rights to the work you create
- Confidentiality promises that you or your client may give
- Any non-competition promises you want to include
- Limits on your liability and who will be responsible for any claims that come up
A Standard Services Agreement or a Master Services Agreement?
What’s the difference? They’re very similar.
Services Agreements
A Services Agreement is meant for one-time deliverables or for longer term services relationships where the type of services stay mostly the same. For example, a content writer could be hired to write a single article or they could be hired to write ongoing blog, marketing, and other content for a company. In either case, the scope of the copy writer’s services – writing the content the client needs – generally stays the same over time.
Master Services Agreements
A Master Services Agreement is meant for phased project work and includes a Statement of Work. Each new phase of an ongoing project or any new project you start will have different services completed and different payment amounts, timelines, and other conditions. So, rather than signing up a whole new contract each time, the new project or phase gets a Statement of Work with the details specific to it. That Statement of Work then becomes part of the master terms and conditions in the (you guessed it) Master Services Agreement.
See an example
Master Services Agreement Example
A software developer might use a Master Services Agreement because the app being worked on will be developed over several phases. The first phase might be beta testing, the second a minimum viable version of the app for user testing, and the third phase the actual market launch with full features. Each phase will have different work to be done and so a new Statement of Work for each phase describes the work, payment terms, timelines, and other specifics of that phase. The first Statement of Work will cover the beta testing, and the second Statement of Work covers the minimum viable product version, and so on until all the phases are completed.
Standard Services Agreement Example
A standard format Services Agreement is designed for services that generally don’t change all that much and so there is a single description of the services to be done. For example, a consultant may be hired to write a market analysis report to understand demand for a product. Since the report is the only work product and there is no need for a project phase approach, a simpler standard Services Agreement makes sense.
Who needs it
When you need one
When you start your services for a customer or client.
You should have a contract with your client or customer anytime you start to provide your services to them. Having a contract helps to avoid problems and disputes that will get in the way of doing business. When there is a disagreement about the conditions attached to your work, you can point to your Master Services Agreement. Most importantly, the clarity from a contract gives you confidence in having a professional and good working relationship.
Pricing options
FAQs
What's a Statement of Work? How does it work?
A Statement of Work is a description of the services you will do in a phase of a project. Think of it as your project document and the Master Services Agreement as your legal document. The Statement of Work includes:
- A detailed description of the work that will be completed
- When the work will be done (e.g., milestones and timelines)
- The fees for the phase of the work
- Any dependencies and who is responsible for them
- Any client responsibilities, such as providing systems or network access
- Success criteria (e.g., what will make the project a success so it’s considered complete)
How does it work?
When you start a new phase of a project or even a new project with the same customer, rather than signing a whole new long Services Agreement you just need to write a Statement of Work and have it signed with the customer. The Statement of Work says that it’s subject to the already signed Master Services Agreement with the customer. So, all the legal terms from the Master Services Agreement apply to the Statement of Work.
What's the difference between a Master Services Agreement and a Services Agreement?
The difference is that a Master Services Agreement is meant for phased project work and includes a Statement of Work. Each new phase of an ongoing project or any new project you start will have different services completed and different payment amounts, timelines, and other conditions. So, rather than signing up a whole new contract each time, the new project or phase gets a Statement of Work with the details specific to it. That Statement of Work then becomes part of the master terms and conditions in the (you guessed it) Master Services Agreement.
Master Services Agreement Example
For example, a software developer might use a Master Services Agreement because the app being worked on will be developed over several phases. The first phase might be beta testing, the second a minimum viable version of the app for user testing, and the third phase the actual market launch with full features. Each phase will have different work to be done and so a new Statement of Work for each phase describes the work, payment terms, timelines, and other specifics of that phase. The first Statement of Work will cover the beta testing, and the second Statement of Work covers the minimum viable product version, and so on until all the phases are completed.
Standard Services Agreement Example
A standard format Services Agreement is designed for services that generally don’t change all that much and so there is a single description of the services to be done. For example, a consultant may be hired to write a market analysis report to understand demand for a product. Since the report is the only work product and there is no need for a project phase approach, a simpler standard Services Agreement makes sense.
What's the difference between a Master Services Agreement and Services Terms & Conditions?
They’re the same family of legal documents – both are contracts about the services you will do for your customer or client. A Master Services Agreement is more detailed and used for more complex, phased projects. Services Terms & Conditions are for simple, one-time services and are normally written in plainer language and are shorter overall since they’re attached to an order form (digital or paper), purchase order, or proposal that already describes the scope of the services you will be doing.
What's a non-competition clause?
A non-competition clause is a promise to not compete with another business. They’re not always easy to enforce, especially if the party agreeing to the non-competition clause wouldn’t easily be able to find employment or continue their business after agreeing to the clause. In short, the non-competition clause should be the minimum necessary to protect the party needing it. So, non-competition clauses are usually time-limited (e.g., 1 – 2 years), limited to a specific geographic area, and apply only to the business of the protected party.
What's a non-solicitation clause?
A non-solicitation clause is a promise to not hire the other party’s employees or contractors. It can also be a promise to not go after the party’s customers and clients. Non-solicitation clauses are generally easier to enforce than non-competition clauses but are still normally limited to a time period, like one or two years for example.