Master Service Agreements
For ongoing client relationships, a well-drafted MSA creates efficiency and reduces friction. It establishes the framework once, letting you focus on specific SOWs for each engagement.
Key takeaways
- →Create MSA + SOW structure for flexibility
- →Negotiate liability caps tied to contract value
- →Define change order and escalation procedures
- →Include auto-renewal with clear termination rights
Structure for flexibility
The MSA contains your 'evergreen' terms: liability, IP, confidentiality, dispute resolution. Each Statement of Work references the MSA and adds project-specific terms: scope, timeline, pricing. This means you negotiate core terms once and adapt only what changes per project.
Liability caps should match risk
Standard practice ties liability caps to fees paid—often 12 months of fees or the SOW value. Negotiate carve-outs for willful misconduct, IP indemnification, and confidentiality breaches. Ensure caps are mutual. Avoid unlimited liability except for the most egregious conduct.
Change management prevents disputes
Projects evolve. Include a change order process: how changes are requested, how scope impact is assessed, how pricing adjusts, and who has authority to approve. Written change orders prevent 'I thought we agreed...' arguments later.
Termination rights on both sides
Include termination for cause (material breach with cure period) and convenience (with reasonable notice). Define what happens at termination: payment for work completed, deliverable handoff, return of confidential information. Survival clauses for ongoing obligations.
Got questions?
Every business is different. Let's discuss how these principles apply to your specific situation.