Master Service Agreement for IT Services: 2021 Template (2024)

Imagine that you’ve found a suitable IT outsourcing vendor. You have a complex product that requires multiple phases of development, and your companies need to collaborate for an extended time. Maybe you already finished a project with the developer on a high note, and you’re positive about partnering up for next ventures. With the Master Service Agreement, companies can streamline software development by simplifying general contract regulations for ongoing projects, while still being able to make decisions during development.

With MSA, you can make the regulations clearer for both parties in advance to eliminate confusion. It also reduces legal expenses and bureaucracy associated with developing new documentation.

Let’s take a wild guess and assume you’ve already browsed the web for a high-quality MSA template. I wouldn’t be surprised if you didn’t find a good example so far. If so, you don’t need to worry, because below you’ll find the MSA template tailored for software development by outsourcing development organizations.

Master Service Agreement for IT Services: 2021 Template (1)

Table of Contents

What is a Master Service Agreement in software development?

Master Service Agreement (MSA) defines as a contract between IT-vendor and a client that outlines project expectations, responsibilities, roles, provided services, terms, and other essential agreements between parties.

What makes this document stand out from other agreements, like NDA, DPA, and SOW? The key difference is in the goal. MSA in software development can help the IT vendor and the client if they plan to work together repeatedly. Do you want to learn how exactly it boosts the firm’s collaboration in the IT field? Or do you want to know how to successfully outsource software development? Stick with the article to find out.

How to Choose a Software Development Company?

Download the ebook

What is MSA needed for?

When a company and software vendor decides to work on a project over a prolonged period, the Master Service Agreement will make the process cleared out. It also helps to cut costs and save a lot of nerves for involved parties by removing the need to renegotiate and re-review most of the already approved conditions. MSA in software development is a complex document that takes a lot of time to draft. However, after sides reach consensus on it, it can be used as a template for the subsequent ventures.

It allows organizations to focus on essential concerns, like goals, objectives, and timetable of a separate project. Additionally, MSA helps software developers (outsourcing companies) and their clients to avoid contractual disputes or potential legal action. It can state who is going to be responsible for failures, unexpected costs, or intellectual damage, thus providing guarantees and indemnification for both sides. If some disputes do arise, meticulously outlined MSA aids in determining the guilty party faster, which helps with the risk allocation.

Given the importance and complexity of this document, your next question can be…

Read also about best countries for software outsourcing.

Who provides the Master Service Agreement?

In software development, MSA is usually written by an outsourcing vendor and then given to the client for a review. It’s a typical practice for the industry because software companies specialize in nuances and specificities of the project’s development. Additionally, an outsourcing company can compile a Master Service Agreement with other necessary agreements as a part of a documentation package.

It’s possible for the customer’s team to write the MSA and give it to the software company for examination, but there’s a high chance that the revision process can drag on for far too long. Outsourcing vendors, on the other hand, specialize in working with other companies and have more expertise compiling proper documentation.

For example, at Relevant Software, we have collaborated with more than 200 customers from over the world and provided most of them with all the necessary paperwork, including SOWs, NDAs, and MSAs.

Therefore, an experienced software company can effectively write the first draft of the Master Service Agreement in the course of days instead of weeks, and then present it to the client for examination. Outsourcing firm is also going to be swift with editing and adjusting the document to reach mutual consent faster.

How to Tap Into Global Talent Pool to Fill Tech Positions Faster

In this ebook, you'll learn how to solve your tech talent shortage by tapping into the global talent pool.

Download the ebook

What does the MSA consist of?

Simply put, a high-quality Master Service Agreement must state every important and minute detail to convey business expectations and provide financial guarantees to both parties. It should also be clear and understandable to guide project managers. For that reason, the MSA document is typically structured into the following sections.

Provision of services

After an introduction section with names of the participating parties, official contact information, and legal addresses, comes one of the most critical parts of the document with general conditions.

Provision of Services section of the MSA must contain:

  • Overall goals and objectives for future projects.
  • Client’s expectations.
  • Services provided regarding individual SOW.
  • Clauses, fees, and processes associated with order adjustments or SOW changes.
  • Regulations for progress reporting.
  • Description of the work model and weekly working hours standards with reference to the time zone under which the outsourcing agency operates.
  • Rules and limitations for solicitation with other contractors during software development.
  • Guarantees of independence for the IT vendor and the employer.

Payment and acceptance of services

There are three main methods of payment in software development:

  1. Fixed price method. Preferred method of work for projects with detailed plans and presupposed delivery dates. Payment is usually tied to milestones, completed tasks or phases, or it can be made as a one-time fee after employ accepts the product.
  2. Time and Materials (T&M). Suitable for flexible products with unidentified scope. In this contract model, the employer covers the costs of the materials and pays for actual hours engineers devote to work.
  3. Dedicated team model. Best payment type for multi-layered and complex products where the client can effectively manage the core development crew. The customer pays monthly based on the developer’s hourly project input.

MSA covers the acceptance process for the provided services, the causes for rejecting the work, or demanding a modification and revisions. The fees, taxes, timesheets, and causes for unplanned expenses compensation, as well as payment transfer methods, also go into this section.

Read also on ways to extend software team.

Management and monitoring of performance

Individual projects should have the involvement of each side in operating processes and performance monitoring described in a separate SOW. However, the Master Service Agreement can mention the overall managemental structure of software development. Companies may even create a Management Guide attachment with the clarification of their administrative roles.

Terms and clauses for termination

Individual projects have their own deadlines and timeframes. The Master Service Agreement, however, states the duration of the developer’s and client’s partnership. MSA also describes causes under which a contract can be terminated prematurely. Alternatively, the document can establish an automatic renewal procedure if both sides deem it desirable.

Intellectual property rights and ownership

This MSA chapter lays out what results of work on projects under individual SOWs fall within the intellectual property and who retains ownership, copyrights, and other rights, associated with the contract deliverables. It also specifies which data and materials need to be delivered or transmitted to the customer. Meanwhile, the paper needs to state which software, inventions, technology, and data developed prior to or during collaboration, belongs to the software company.

Confidentiality

To ensure the protection of data that became known during the collaboration, the agreement must clearly state what information should be considered confidential and is no subject for disclosure to public or third parties. The MSA needs to clarify if the software development vendor can refer to his partnership with the employer in advertisements.

Liability, warranties, and representations

Section that sets liability limitations. Usually, both sides aren’t responsible for indirect or consequential damages. However, if exceptions are made, then they should be listed in the MSA. Furthermore, the agreement lists employees and participating partners who assume the risks for operational incidents that lead to direct losses.

Indemnification

In case the client or software company fails to comply with the Master Service Agreement, which leads to the monetary losses, data breach, copyright infringement, or reputational damage, the contract explains how the responsible side compensates such harm. Additionally, it should mention exclusions from indemnities.

Communication and notices

To stay in touch during development, the MSA must state the representatives of each side, their preferred methods, and tools for communications, locations chosen for real-life meetings, as well as the process of receiving official notifications.

For example, the agreement can establish the process for delivering the MSA and its revisions. It can also cover the procedure of approval or rejection of the deliverables.

Miscellaneous

The paper can have other conditions that don’t fit the sections addressed above. However, if organizations consider them necessary, your MSA can also provide the following information:

  • Disclosure about data protection.
  • Governing laws and jurisdiction.
  • Procedures for minute amendments to the documents.
  • Clauses for severability of the agreement’s provisions.
  • Revision process for deliverables, as well as the set review periods.
  • Arrangement for post-production support and testing of the product.

Why these 200 tech companies & startups outsource to Ukraine

Download the whitepaper

Summary

Proper Master Service Agreement provides guidance for the IT outsourcing company and employing organization, forms the basis of their relationship, and streamlines future agreements.

Relevant Software provides software development services exclusively under MSA. Therefore, our company is very meticulous with documentation preparation to ensure ours and our client’s mutual satisfaction.

If you found our MSA template for IT services useful and your company is interested in IT outsourcing services, feel free to drop us a line.

Master Service Agreement for IT Services: 2021 Template (2024)

FAQs

What are the 3 main elements of master services agreement? ›

It spells out:
  • Confidentiality: The parties both agree they won't share any secrets of the company with outside parties.
  • Delivery requirements: The businesses decide who will deliver what and when.
  • Dispute resolution: Should issues come up, the MSA outlines how the parties will resolve their conflict.

How do you fill out a service agreement? ›

How to Write a Service Agreement
  1. A description of the parties involved in the agreement. ...
  2. A description of the services to be performed. ...
  3. A description of fees and payment schedules. ...
  4. The effective date of the contract, when work will begin, and the terms under which it can be terminated. ...
  5. Include a place for signatures.

What should be included in a master services agreement? ›

A MSA will cover the important terms such as delivery requirements, payment terms, intellectual property rights, warranties, dispute resolution and termination (see below for a checklist of terms). MSAs are also often known as Framework Agreements.

What is MSA in IT industry? ›

What is an MSA agreement in software development? At its core, an MSA is an IT service agreement between two or more parties (your company and your outsourcing vendor, in this case) that lays down the terms and conditions to govern the current and future responsibilities and activities.

What is an MSA template? ›

A master service agreement sets the pace for future contracts between two parties by outlining the maximum possible terms. A service-level agreement outlines the obligations and responsibilities of each party. Taylor Bruneaux. November 29, 2022.

What is difference between MSA and SLA? ›

A MSA sets the terms and conditions for the services provided by one party to another, whereas a SLA sets the agreed-upon performance standards for an organization's services.

Can I make my own service agreement? ›

Write the Service Contract

They can ensure that your terms and conditions hold up in court. Likewise, they have the expertise to create a well-written contract. Even if you write your service contract yourself, it's wise to have a professional review it.

What is the outline of a service agreement? ›

A Standard Service Agreement is a legal contract between a client and a service provider. The agreement outlines important details about the business relationship and the duties owed to one another. It may include information like pricing, ownership, shipment details, and much more.

What is a service contract example? ›

Service Contracts are agreements between a customer or client and a person or company who will be providing services. For example, a Service Contract might be used to define a work-agreement between a contractor and a homeowner. Or, a contract could be used between a business and a freelance web designer.

What is an example of master agreement? ›

An example of a master agreement is a master services agreement, which governs the terms between a service provider and client. Typically, clients will use Statements of Work that point back to the master agreement so they don't have to recreate a new contract with new terms each time there is a new project.

What should be included in every service level agreement answer? ›

The SLA should include not only a description of the services to be provided and their expected service levels, but also metrics by which the services are measured, the duties and responsibilities of each party, the remedies or penalties for breach, and a protocol for adding and removing metrics.

What are the 3 types of SLA? ›

There are three basic types of SLAs: customer, internal and multilevel service-level agreements.

How is MSA done? ›

The Gage R&R Study

Then perform the following steps: Obtain at least 10 random samples of parts manufactured during a regular production run. Choose three operators that regularly perform the particular inspection. Have each of the operators measure the sample parts and record the data.

How many types of MSA are there? ›

There are two types of MSA : parkinsonian and cerebellar. The type depends on the symptoms you have when you're diagnosed.

What is difference between MSA and SOW? ›

Both MSAs and SOWs are used in service transaction contracts. The major difference between them is that, while an MSA sets the legal framework for the relationship between contracting parties, an SOW deals with specific projects or transactions.

How do I make my own MSA? ›

Create an MSA template with Adobe Acrobat.

Then click Create a Reusable Template and enter a name for your template. Upload your file and select Create as Reusable Document, Create as a Reusable Form Field Layer, or both.

Who writes MSA? ›

An MSA agreement is written between two parties. There is a service provider on one hand and a customer on the other hand. This agreement contains certain terms and conditions that are related to all the future service-related transactions between them.

What is MSA structure? ›

A microservice architecture (MSA) is a logical structure for the design of a software program involving loosely-coupled modular components known as microservices.

What are the 2 types of SLA in service now? ›

Three types are :
  • SLA - service level agreement.
  • OLA - operational-level agreement.
  • Underpinning Contract.

What does MSA mean in RFP? ›

When issuing a call for an RFP, the POA should use the same type of form for each vendor to submit their information. What is an MSA? The MSA, also known as the master service agreement, is the POA's contract for use with its vendors. The MSA sets forth the requirements that often stall or terminate the process.

What is an MSA in SAAS? ›

A master service agreement (MSA) is a contract between two or more parties during a service transaction. An MSA sets the expectations and terms for a long-term business relationship, including the governance of all current and future activities.

How do I write my own agreement? ›

Write the contract in six steps
  1. Start with a contract template. ...
  2. Open with the basic information. ...
  3. Describe in detail what you have agreed to. ...
  4. Include a description of how the contract will be ended. ...
  5. Write into the contract which laws apply and how disputes will be resolved. ...
  6. Include space for signatures.

What is an example of terms of service? ›

In short, a ToS is simply a contract where the owner clarifies the conditions that a user must meet to use its service. Some examples include: Copyright and the use of content. Rules users must follow when interacting with other users.

What are the four elements of an agreement? ›

The basic elements required for the agreement to be a legally enforceable contract are: mutual assent, expressed by a valid offer and acceptance; adequate consideration; capacity; and legality.

What are the six elements of service level agreements? ›

In order to develop a well organized service level agreement, there are six key components noted in this excellent template that should be included:
  • Agreement Overview. ...
  • Goals and Objectives. ...
  • Stakeholders. ...
  • Periodic Review. ...
  • Service Agreement. ...
  • Service Management.
Aug 23, 2017

What is the difference between a service agreement and a service contract? ›

Services agreements are arrangements (usually informal) between two or more parties and are sometimes enforceable at law. Contracts are a formal arrangement between two or more party that, by its terms and elements, are always enforceable at law.

What is a good example of contract? ›

For example, whenever we buy a product at a store or go grocery shopping, we are entering into an agreement to purchase whatever it is we are purchasing. When we get a new job, we sign an employment agreement to start work – that's a contract!

What is another term for master agreement? ›

A master service agreement, sometimes known as a framework agreement, is a contract reached between parties, in which the parties agree to most of the terms that will govern future transactions or future agreements.

Is a master service agreement binding? ›

An MSA Agreement is a legal document that becomes legally binding when signed by both parties. The main criteria to determine if the signatures on the MSA make it legally binding include the following: There must be a lawful purpose to enter into the agreement. All parties have agreed upon everything.

What is the purpose of the master contract? ›

A master contract is an agreement between parties that establishes terms and conditions that will guide all current and future activities and responsibilities between those parties. A master contract allows the development and ratification of future agreements.

Which is a key requirement for a successful service level agreement? ›

Be realistic: The SLA should be realistic and achievable, and should take into account the capabilities and limitations of the service provider. Be flexible: The SLA should be flexible enough to accommodate changes in the service requirements, while still maintaining the agreed-upon standards.

How do you structure a service level agreement? ›

How to write a service level agreement in 5 steps
  1. Define the service. Your SLA will need to define and outline the service clearly. ...
  2. Verify service levels. ...
  3. Determine performance metrics. ...
  4. Prepare the service level agreement document. ...
  5. Review the SLA with all stakeholders.
Jun 16, 2023

What is the most important aspect of a service level agreement? ›

The SLA should include a detailed description of the services. Each individual service should be defined i.e. there should be a description of what the service is, where it is to be provided, to whom it is to be provided and when it is required.

What are the 5 phases of SLA management? ›

Our SLA life cycle is made of five phases ( Figure 2): Negotiation, Implementation, Monitoring, Remediation and Renegotiation. ...

What are the three levels of SLA ITIL? ›

ITIL focuses on three types of options for structuring SLA: Service-based, Customer-based, and Multi-level or Hierarchical SLAs.

What is SLA and KPI? ›

SLAs are documents that outline the wider service agreements between a service provider and its customers, while KPIs are generally used to measure the performance of companies against their strategic goals.

What is the sample size for MSA? ›

Use a sample size calculator. From 30 to 50 samples are necessary. The samples should span the normal extremes of the process with regards to the attribute being measured.

What is MSA in Six Sigma? ›

Often used at the measure phase of Six Sigma methodology, Measurement System Analysis (MSA) is a statistical and scientific tool to ensure the measurement done to collect data is consistent, reliable, unbiased and correct. It emphasizes on standardization of data collection method and assessment of the collected data.

What are the types of error in MSA? ›

Introduction. MSA studies the error within a measurement system. Measurement system error can be classified into three categories: accuracy, precision, and stability. Accuracy describes the difference between the measurement and the actual value of the part that is measured.

What is MSA called now? ›

Multiple system atrophy (MSA), also known as Shy-Drager syndrome, olivopontocerebellar atrophy, and striatonigral degeneration, is a progressive neurodegenerative disorder characterized by a combination of symptoms that affect both the autonomic nervous system (the part of the nervous system that controls involuntary ...

How many stages are in MSA? ›

The MDS criteria for the diagnosis of MSA define four levels of diagnostic certainty: neuropathologically established MSA, clinically established MSA, clinically probable MSA, and possible prodromal MSA.

Do master service agreements expire? ›

Once the MSA is signed, the parties can use it for years without having to continuously renegotiate the legal terms.

Can you have a Statement of Work without a Master Service Agreement? ›

You'll want to make sure that your company develops both a Master Services Agreement (MSA) and a Statement of Work (SOW) or Work Order (WO). Both of these contractual documents are essential when working with freelancers, contractors, and vendors.

Does an MSA include an NDA? ›

Types of Agreement

Many large companies require contractors to sign an NDA before starting work on any project. An MSA document is similar to an NDA, except it has been written for members of a group or organization rather than between two individuals or companies.

Which are the 3 types of service level agreements structures? ›

There are three basic types of SLAs: customer, internal and multilevel service-level agreements.

What are the 4 aspects of service level agreement? ›

The four aspects of an SLA are service delivery, service level metrics, service monitoring, reporting, and remedies and penalties if service levels are not met.

What are the major components in an agreement? ›

Whether a contract is 200 pages or 10 pages, to be a legally binding agreement they must contain six basic elements: Offer, Acceptance, Awareness, Consideration, Capacity, Legality.

What are the basic elements of a service level agreement? ›

The main elements of a good SLA.
  • Overall objectives. The SLA should set out the overall objectives for the services to be provided. ...
  • Description of the Services. The SLA should include a detailed description of the services. ...
  • Performance Standards. ...
  • Compensation/Service Credits. ...
  • Critical Failure.

What are the four pillars of service strategy? ›

Gartner, the world's leading research and advisory company, breaks customer service down into four pillars: Getting Connected, Process Orchestration, Knowledge & Insights, and Resource Management.

What are the four 4 characteristics of services explain? ›

There are four characteristics of service: Intangibility, Inseparability, Variability, and Perishability (Kotler and Keller, 2007). As service's nature is intangibility, therefore manufacturing and service delivery is more complex than a product.

What are the 5 points of agreement? ›

The 5 elements of a legally binding contract are made up of:
  • An offer.
  • Acceptance,
  • Consideration.
  • Mutuality of obligation.
  • Competency and capacity.

What are the 5 legal elements of an agreement? ›

A contract is a legal agreement between two or more parties in which they agree to each other's rights and responsibilities. Offer, acceptance, awareness, consideration, and capacity are the five elements of an enforceable contract.

What are the two major parts required to form an agreement? ›

Elements -- Consideration and Mutual Assent

To be legally binding as a contract, a promise must be exchanged for adequate consideration.

How do you write a simple service level agreement? ›

How to write an SLA
  1. Evaluate your current service levels. ...
  2. Identify your objectives. ...
  3. Choose a contract format. ...
  4. Determine the level of service. ...
  5. Articulate the terms of the agreement. ...
  6. Clarify performance expectations. ...
  7. Outline payment expectations. ...
  8. Include appendices if necessary.
Jun 24, 2022

What is service level agreement example? ›

For example, Service Level Agreements outline specific criteria that a customer can expect the business to meet (i.e., uptime, responsiveness, etc.). This could mean that your servers will be available 99.9% of the time for your product or that customer service inquiries will all be answered within 24 hours.

What is service level agreement and examples? ›

Service-based SLA: An agreement for all customers using the services being delivered by the service provider. For example: A mobile service provider offers a routine service to all the customers and offers certain maintenance as a part of an offer with the universal charging.

References

Top Articles
Latest Posts
Article information

Author: Terrell Hackett

Last Updated:

Views: 6326

Rating: 4.1 / 5 (52 voted)

Reviews: 91% of readers found this page helpful

Author information

Name: Terrell Hackett

Birthday: 1992-03-17

Address: Suite 453 459 Gibson Squares, East Adriane, AK 71925-5692

Phone: +21811810803470

Job: Chief Representative

Hobby: Board games, Rock climbing, Ghost hunting, Origami, Kabaddi, Mushroom hunting, Gaming

Introduction: My name is Terrell Hackett, I am a gleaming, brainy, courageous, helpful, healthy, cooperative, graceful person who loves writing and wants to share my knowledge and understanding with you.