An MSA, also known as a Master Service Agreement, is a contract between two or more parties, and it serves to establish the conditions and the terms that will govern all the present and future activities between the parties. MSAs are highly useful, as they allow the parties to plan the future and help ratify future agreements. MSAs also create a contract framework that helps establish the foundation of future actions. The basic terms of these contracts are confidentiality, dispute resolution, limitations of liability, warranty, intellectual property rights, etc.
Advantages of using a Master Service Agreement
The Master Service Agreement helps to simplify and streamline the contract negotiation process. It sets up the terms of the deal between both parties entering the contract and delineates their rights, expectations, and responsibilities. The other advantages of entering into an MSA contract are as follows.
- The MSA sets up the foundation of the business relationship and helps the parties to shift their focus to the specifics of the contract.
- It helps both parties in the business to plan for their future and adapt to changes in the business landscape.
- Having the MSA contract helps to alleviate the pressure of a deadline and helps the parties involved take time to adjust and respond.
- The flexibility offered by an MSA helps to solve business disputes and allows both parties to maintain their relationship.
Purpose of Master Service Agreements
Businesses generally use MSA to make their business negotiations simpler. The agreement allows both companies to discuss the terms of the deal quickly and helps them to process their work, given in the agreement, without wasting time. The contract helps companies to move quickly forward and get the job done instead of having to slow their progress to negotiate the business terms. The MSA contract mitigates the need for litigation and helps avoid contractual disputes. It also helps decide the responsibility of each group during the project’s lifetime.
Things to be Included in a Master Service Agreement
The MSA is considered to be the bedrock of long-term business relationships. As it covers all the contingencies and helps plan for unforeseen business issues, it should include the following components.
- A complete picture of the involved parties’ responsibilities as it helps to understand where conflict arises.
- Individual responsibilities of the assigned parties
- The MSA should address areas such as product and project management, employee management, and income and expense of the involved parties.
- Contract requirements and liabilities
- Third-party coverage and concerns
- Taxes involved in the contract.
- Information on who supplies that funding and payment for the project.
- Information regarding the termination of the business agreement.
Bottom Line:
The Master Service agreement is a legal game changer and must have a legal document for any business relationship. These contracts help establish a negotiation template and serve as a reference point that eliminates the need to recreate a new contract for all the actions t. It delineates a contract’s essential terms and conditions and lays the legal framework for the future business relationship. Business can get their MSA contracts prepared by effective and user-friendly web portals like MySetAside, even for contracts with the Federal and State governments, along with private entities.