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Master Service Agreement: The What and The Why

Updated: Jun 15, 2022

Organizations looking to increase output and strengthen business relationships should have their own Master Service Agreement.

What is an MSA?

A Master Service Agreement (“MSA”) is a document that governs the relationship between a Service Provider and a Customer, and outlines terms and conditions between the parties to the MSA by:
  • setting out details and expectations of both parties;

  • stating each party’s obligations and responsibilities; and

  • outlining the terms and conditions of the provision of services.

What value does an MSA bring to your organization?

  • Cost effective and time efficient by eliminating the need to negotiate the legal terms that govern the relationship between the parties.

  • Limits contractual disputes and promotes dispute resolution through risk allocation and division of responsibilities between the parties.

  • Reduces confusion caused by conflicting legal terms in other documents, as the MSA governs in the event of a conflict.

  • Provides sales people the vehicle through which to scope out opportunities, projects and deals without having to negotiate general terms of engagement for every new opportunity.

What are some important terms that should be in the MSA?

  • Warranties and Disclaimers. This section details the responsibilities and remedies of the parties should there be an issue with the performance of services or deliverables. Consider whether your organization is comfortable providing warranties.

  • Indemnification. This section details which party is responsible in the event of a dispute and the obligations of that party in rectifying the loss or harm to the other party. Consider the parties, the obligations, the scope of the indemnity, the subject matter, and the limitations.

  • Limitation of Liability. This section details how liability is triggered and the scope of liability of the parties. Consider how much liability your organization can sustain.

  • Governing Law. This section holds more weight than meets the eye as it is important to ensure that the jurisdiction chosen will be the most advantageous to your organization in the event of a dispute.

  • Intellectual Property Ownership. This section is critical to ensure protection of organizational assets, and should parallel the organization's intellectual property framework and strategy. This section will be further explored in Misasi Legal’s next blog post; stay tuned!

If you have any questions about MSAs, or would like assistance incorporating this guidance into your organization’s MSA, please contact Erika Misasi at Misasi Legal by email, or by phone at 647-297-5007.

For more information on Misasi Legal check out and follow us on all social media platforms @MisasiLegal.


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