To start a new project or phase under your Master Services Agreement.
A Statement of Work (often called a “SOW”) is what you use to start new phases of a project or even whole new projects under a single Master Services Agreement. It’s a convenient way to describe the services and project specifics that will be done for a customer or client. The Statement of Work is then attached to the main legal agreement (the Master Services Agreement) and becomes a part of it.
The Statement of Work describes the services you will do in a phase of a project and may include:
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)
A Statement or Work is part of a Master Services Agreement.
A Statement of Work is part of a Master Services Agreement, which is the main contract with all the legal terms that apply to the services a company does for a customer or client.
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 Master Services Agreement you just need to write a Statement of Work and have it signed. The Statement of Work says that it’s subject to the already signed Master Services Agreement with the customer and becomes a part of the overall master agreement. So, all the legal terms from the Master Services Agreement apply to the Statement of Work, allowing the Statement of Work to focus mostly on the project details.
Who needs it
A company and client that have a Master Services Agreement
Website and software developers
Information systems and technology firms
... and other services companies
When you need one
You should have a Statement of Work before you start a project or new phase of an existing project with a customer or client that has already signed a Master Services Agreement with you. Check out our Master Services Agreement if you don’t already have one.
What's a Master Services Agreement? How does it work?
A Master Services Agreement is the main services contract between a company and a client. It describes the services that will be completed for the client and the conditions attached to those services. Here are the main topics in a Master Services Agreement:
Services will be done as 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
What's the difference between a Master Services Agreement and a Services Agreement?
The difference between the two is that a Master Services Agreement is meant for project-based work and includes a Statement of Work. Each new project you start or another phase of a larger project 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 and 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 production version 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 to be done, payment terms, and any obligations specific to that phase.
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 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.
