Master Services Agreements

We understand that Master Services Agreements (MSAs) form the backbone of many business relationships. Whether you’re a service provider or a customer, having a well-drafted, clear, and comprehensive MSA is essential to ensure smooth operations, manage risks, and protect your commercial interests.

Our experienced commercial lawyers specialise in drafting, reviewing, and negotiating MSAs across a range of industries, including IT, professional services, manufacturing, and more. We work closely with you to tailor agreements that align with your business objectives while mitigating potential legal risks.

What is a Master Services Agreement?

A Master Services Agreement is a contract that establishes the terms and conditions governing future services between two parties. It serves as a framework for the relationship, allowing additional service-specific agreements or Statements of Work (SOWs) to be added without renegotiating the core terms.

An effective MSA:

• Clearly defines roles and responsibilities.
• Provides flexibility for ongoing projects or services.
• Reduces the need for repetitive negotiations.
• Manages liability, confidentiality, and intellectual property concerns.

The Relevance of Statements of Work (SOWs)

Statements of Work (SOWs) are critical documents that complement MSAs by detailing specific project requirements or deliverables under the overarching agreement. While the MSA sets out general terms, the SOW ensures clarity and precision at the project level.

Why SOWs Are Important

• Detailed Scope of Work: They outline exactly what will be delivered, including timelines, milestones, and responsibilities.
• Customisation: Each SOW can be tailored to the unique needs of individual projects while adhering to the overarching MSA.
• Flexibility: SOWs allow businesses to modify terms for individual projects without renegotiating the entire MSA.
• Avoiding Disputes: A well-drafted SOW minimises ambiguity, reducing the likelihood of misunderstandings and disputes.

Points to Note When Drafting SOWs

• Scope and Deliverables: Clearly define what is included in the scope of the project and any specific exclusions. This avoids disputes about additional work or “scope creep.”
• Timelines and Milestones: Include specific dates for deliverables, key milestones, and final project deadlines to ensure accountability.
• Payment Terms: State the payment schedule, whether based on milestones, time and materials, or a fixed fee, and link it to deliverables.
• Performance Standards: Specify measurable service levels or performance criteria that will be used to evaluate the work.
• Change Management: Outline a clear process for handling changes to the SOW, including how additional costs or delays will be addressed.
• Termination Rights: Define the circumstances under which either party can terminate the SOW independently of the MSA.

Key Clauses to Include in a Master Services Agreement

An MSA must address a wide range of potential issues to provide clarity and protection for both parties. Below are some of the most important clauses to include:

1. Scope of Services
   • Clearly define the services to be provided and any exclusions.
   • Reference how additional services will be governed through SOWs.
2. Payment Terms
   • Specify payment schedules, accepted methods, and consequences for late payments.
   • Include clauses addressing tax, VAT, and any additional fees.
3. Term and Termination
   • Set out the duration of the agreement and the terms under which it can be terminated.
   • Include provisions for early termination, notice periods, and associated fees.
4. Liability and Indemnification
   • Limit liability for certain types of damages (e.g., consequential losses).
   • Include indemnity clauses to protect against third-party claims arising from the agreement.
5. Confidentiality and Data Protection
   • Specify obligations for protecting sensitive business or personal data.
   • Ensure compliance with GDPR and other relevant data protection laws.
6. Service Level Agreements (SLAs)
   • Define performance standards, targets, and remedies for non-compliance.
7. Intellectual Property Rights
   • Address ownership and usage of IP created during the engagement (see more below).
8. Force Majeure
   • Include provisions for unforeseeable events (e.g., natural disasters or pandemics) that may impact performance.
9. Dispute Resolution
   • Outline methods for resolving disputes, such as negotiation, mediation, or arbitration.
10. Governing Law and Jurisdiction

• Specify which legal framework and courts will govern the agreement.

Intellectual Property (IP) Issues to Address in MSAs

Intellectual property is often one of the most contentious and critical aspects of a Master Services Agreement. Properly addressing IP issues ensures clarity on ownership, usage rights, and protection.

Key IP Issues to Address

1. Ownership of Deliverables
   • Clearly specify whether IP created during the course of the agreement (e.g., software, designs, reports) is owned by the service provider, the customer, or jointly.
   • Include clauses for assigning IP rights to the customer if they are paying for custom-developed work.
2. Pre-Existing IP
   • Define how pre-existing IP (e.g., tools, templates, or methodologies owned by the service provider) can be used in the project.
   • Specify whether the customer has a license to use such pre-existing IP and under what terms.
3. Licensing Rights
   • If the service provider retains ownership of certain IP, detail the scope of the license granted to the customer (e.g., usage rights, duration, sublicensing restrictions).
4. Confidentiality of IP
   • Include confidentiality clauses to protect sensitive IP, trade secrets, and proprietary information.
5. Infringement Indemnities
   • Include indemnity clauses requiring the service provider to protect the customer against third-party claims of IP infringement.
6. Future Use
   • Address whether either party has the right to reuse or repurpose deliverables created under the agreement for other clients or projects.
7. Moral Rights
   • Consider waiving moral rights (e.g., the right to be credited) if applicable, especially for creative works.
8. Post-Termination Use
   • Specify whether and how the customer can continue using the deliverables after the agreement ends.

Our MSA Services

We offer comprehensive legal services to support businesses at every stage of the MSA and SOW process:

1. Drafting Master Services Agreements and SOWs

• Creating robust, legally enforceable MSAs and SOWs tailored to your business needs.
• Ensuring alignment between the general terms in the MSA and the specific provisions in the SOWs.
• Addressing key areas such as payment structures, deliverables, dispute resolution, and IP issues.

2. Reviewing Existing MSAs and SOWs

• Conducting detailed reviews of MSAs and SOWs to identify gaps, ambiguities, or unfair terms.
• Ensuring compliance with applicable UK laws and industry-specific regulations.

3. Negotiating MSAs and SOWs

• Assisting clients in negotiating terms to ensure a balanced agreement that protects your interests.
• Managing discussions on contentious points, such as liability caps, service levels, and IP rights.

4. Advising on Disputes and Breaches

• Helping businesses resolve disputes related to non-performance, delays, or breaches of MSAs or SOWs.
• Advising on termination rights, damages, and other remedies available under the agreements.

Contact Us

Whether you’re setting up a new business relationship or need advice on an existing MSA or SOW, our team of commercial lawyers is here to help.

Contact us today to schedule a consultation and ensure your Master Services Agreement, Statements of Work, and Intellectual Property protections are working for you.

Let us help you create agreements that protect your interests and build the foundation for successful partnerships.