When you’re providing services for clients, it can be quite common to have your clients come back for ongoing or additional work.
In these circumstances, it may not be the most efficient option to have them sign the same contract every time they come back for more work.
As such, you might want to have a broad “head agreement” that your clients sign. They’ll then be bound to these terms for all future projects.
This is what you call a Master Services Agreement: a head agreement under which a business provides ongoing services to a client.
It is referred to as a ‘master’ agreement because it is intended to be a standard agreement that can be used for all kinds of services, and it is usually quite broad. Once Master Services Agreements are signed, they are usually followed by ‘Statements of Work’ which are specific to each job.
For example, an online eCommerce store might sign a Master Services Agreement with a web designer, which covers all work that the web designer will do for the eCommerce business over the next 12 months. This Master Services Agreement would address general matters, such as intellectual property, how payment is made, limitation of liability, and termination.
Then, each week, the eCommerce store and the web designer will agree to a ‘Statement of Work’ under which the web designer agrees to carry out specific projects for set fees. Within the Statement of Work will be a sentence that says ‘this Statement of Work is made under the Master Services Agreement’. This means that all the clauses in the Master Services Agreement will apply to each specific project.
Why Do I Need A Master Services Agreement?
Master Service Agreements are important for businesses that provide a range of services and would like to standardise their terms and conditions for easy use, particularly with recurring clients.
For service providers, a well-drafted Master Services Agreement will secure your revenue streams and protect your liability.
For customers, a robust Master Services Agreement can ensure that you are supplied with the right services at the right time. It’ll also ensure you have recourse in the event that your service provider does not perform to the standard you require.
What Is Included In A Master Services Agreement?
A Master Services Agreement will typically include clauses addressing the following:
- Intellectual property rights
- Payment terms
- Scope of services
- Liability protection
- Term and termination of the agreement
- IT-specific clauses
- Statements of work
What Other Contracts Do I Need?
Having a Master Services Agreement is a great place to start. However, you’ll probably need additional, more specific contracts depending on the kind of work that you do.
When you’re working in the IT industry, it can be easy to get confused between all the different types of contracts your business needs. So, we’ve walked through them for you below.
The additional contracts you may need include:
- A Statement of Work: If you have a client with specific expectations, timelines or requirements on a project, a detailed Statement of Work will spell out what you’ll do (and will be linked to your Master Services Agreement). You can include this in any Service Agreement.
- A Service Level Agreement: Sometimes, clients might ask that you have a Service Level Agreement to set out the minimum levels of required service. For example, a client might expect that you attend to a technical issue as soon as it is reported. Often, these requirements are set out in a proper Service Level Agreement, or in the ‘Schedule’ of your Service Agreement.
- A Managed Services Agreement: In the IT industry, it’s common for one business to take care of another business’ entire IT operations (from maintenance to technical support). In this case, a Managed Services Agreement will spell out the suite of services that business offers to its clients.
Why Choose Sprintlaw?
At Sprintlaw, our lawyers will have a discussion with you before drafting a Master Services Agreement to understand your concerns and unique business needs.
And, if you have bigger clients with specific needs, we can also assist in putting together a Statement of Work.
Our lawyers are highly experienced in drafting Master Services Agreements, and are experts in contract law.
Don’t hesitate to reach out to find out more! Our legal consultants are available for a free, no-obligations chat on 1800 730 617.
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