A Helpful Checklist for Negotiating Master Service Agreements

This post is a helpful guide to Master Service Agreements (MSAs)—a basic overview of everything you need to know about MSAs, including:

• What is a Master Service Agreement?
• What are the benefits of a Master Service Agreement?
• A Master Service Agreement Checklist
• Do I need a lawyer for a Master Service Agreement in Alberta?

Let’s jump right in.

What is a Master Service Agreement?

A Master Service Agreement is a legal contract typically used when a client hires a service provider for multiple projects. The MSA conveniently covers overarching terms and conditions like confidentiality and terms of payment that apply to all projects or service activities pertaining to the service relationship. 

A separate Statement of Work document details the specifics of each project or service activity.

What are the benefits of a Master Service Agreement?

The main advantage of a Master Service Agreement is that it saves time and money. When certain terms and conditions are the same for every project or service, an MSA allows you to re-use the same contract for each related project or service. This saves money on legal fees and the time it would take to create an entirely new agreement each time.

A Master Service Agreement sets expectations for the service relationship and clarifies details to avoid costly disputes or unintended liabilities. For example, details about payment calculations, due dates, and processes eliminate misunderstandings about when and how to pay. 

Master Service Agreement Checklist

Failing to draft or negotiate a Master Service Agreement correctly can lead to huge financial risk, project downtime, and lengthy litigation. It’s important to clearly and thoroughly detail all necessary terms. 

An MSA should detail the responsibilities of each party and the responsibilities the parties share. It anticipates potential issues and sets out resolutions in advance to avoid conflict. 

Use this helpful Master Service Agreement Checklist to know what should be included in an MSA. 

1. Parties: Who are the contracting parties? What are the requirements for anyone working on the project (e.g. background checks)? If a project requires the involvement of a third party, how do the terms of the MSA apply? 
2. Pricing: How and when is pricing determined? What are the taxes? How will tax expenses be split?
3. Payment Terms: What are the payment terms? Is there an early payment discount? Are there late fees?
4. Warranties: What warranties are being given? How long is the warranty period? If there is a breach, what is the remedy?
5. Indemnities: How is risk divided up? Is each party responsible for their own liabilities, or is it based on negligence? Are there any caps on liability?
6. Intellectual Property: Who owns any new intellectual property created during the contract?
7. Insurance: What insurance does each party need to carry?
8. Term/Termination: What is the term of the MSA? What are the termination provisions?

Do I need a lawyer for a Master Service Agreement in Alberta?

In Alberta, a lawyer is not required to negotiate a Master Service Agreement. However, consulting a lawyer to ensure your interests are protected can save you time, stress, and money in the long run. 

A corporate lawyer with industry experience is well-versed in drafting and negotiating agreements, understands what’s acceptable and standard in the industry, and can ensure you get the best possible MSA.

The lawyers at Getz Collins and Associates can give you practical advice and help you navigate the process of drafting and negotiating a Master Service Agreement in Alberta. Contact us today.