Calgary and Strathmore Oil & Gas Lawyers

The emergence of companies requiring in-depth Oilfield Service Agreements or Master Service Agreements has been a significant shift in how business is done in the oilfield sector. Master Service Agreements help avoid contractual disputes and reduce the risk of litigation by establishing the basic terms of the relationship between an oil and gas company and an oilfield services company for all future goods and/or services sold between the parties.

Getz Collins and Associates provides innovative legal solutions to clients in the oil and gas sector, including comprehensive advice on Master Service Agreements. The firm has extensive experience advising clients on the intricacies of these agreements and ensuring their interests are secured.

Master Service Agreements (MSA) in Alberta

A Master Service Agreement (MSA) is a legal contract typically used when a client hires a service provider for multiple projects. An 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.

Master Service Agreements permit quick negotiations of job-specific terms (or “commercial terms”) such as price in a work order/purchase order or a quote/Request for Proposal (RFP) without needing to re-negotiate the liabilities each time. Working without a Master Service Agreement can leave both parties open to risks they hadn’t thought through (or were exposed to by unknowingly agreeing to another party’s hidden terms and conditions), eventually resorting to the court system.

Benefits of a Comprehensive 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. Failing to draft or negotiate a Master Service Agreement correctly can lead to substantial financial risk, project downtime, and lengthy litigation.

Essential Terms in Master Service Agreements

A Master Service Agreement (MSA) should detail the responsibilities of each party and those the parties share. It anticipates potential issues and sets out resolutions in advance to avoid conflict.

Standard terms included in an MSA include, but are not limited to:

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?
Pricing: How and when is pricing determined? What are the taxes, and how will the parties split tax expenses?
Payment Terms: When do you get paid (or pay), and how? What if one side disputes the charges? Is there an early payment discount or late fees?
Liabilities & Indemnities: If something goes wrong on a job and people or property are hurt, who is responsible? Is each party responsible for their own liabilities, or is it based on negligence? Are there any caps on liability?
Insurance: How much insurance does each party have to carry, and what does it cover?
Quality Control, Inspections, Health and Safety Requirements: What standards must be met pertaining to drugs and alcohol, environmental and health and safety policies and compliance with inspection standards and codes? What happens if they aren’t met?
Ownership and Use of Intellectual Property: Who owns the rights to the ideas, techniques and processes used on the job?
Delays, Warranties, and Completion of Work: What warranties are given? How long is the warranty period? What is the cost and liability for non-productive time, delays, defective products, and equipment failure?
Management of Disputes: Where and how are disputes settled?
Confidentiality: What happens if the other party shares your confidential documentation, pricing, ideas or trade secrets?
Trade Compliance and Ethics: What are the rules for entertaining customers, giving gifts, dealing with government officials and selling goods and/or services in other countries?
Termination of Services: What is the term of the MSA? How can it be terminated? What happens if the relationship sours unexpectedly or one party hasn’t complied with the agreement?

Getz Collins and Associates: Providing Top-Tier Advice on Master Service Agreements in Calgary & Strathmore

One of the most challenging aspects of negotiating and drafting Master Service Agreements is understanding and preserving the relationship between the oil and gas company and the service company while balancing the risks for both parties. Getz Collins and Associates takes great pride in leveraging the firm’s industry experience to provide exceptional, innovative legal solutions to clients within the oil and gas sector.

Getz Collins and Associates is a beacon of excellence in the Alberta oil and gas landscape, combining innovative strategies with tradition. With convenient locations in Calgary and Strathmore, the firm serves communities across the province, including Airdrie, Cochrane, Okotoks, Drumheller, Chestermere, Hussar, and all surrounding areas. Please call 587-391-5600 or contact us online to schedule a confidential consultation with our skilled oil and gas lawyers.