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.
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:
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.
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.
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 advertisem*nts.
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.
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 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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
A microservice architecture (MSA) is a logical structure for the design of a software program involving loosely-coupled modular components known as microservices.
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.
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.
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.
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.
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.
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!
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.
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.
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.
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.
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.
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.
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.
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.
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.
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 ...
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
We notice you're using an ad blocker
Without advertising income, we can't keep making this site awesome for you.
