Master services agreement (MSA)

What it is and when it is used

A master services agreement (MSA) is a framework contract for professional, consulting, development and similar services. Instead of negotiating a full contract for every project, the parties agree the general terms once in the MSA. Each project is then documented in a Statement of Work (SOW), signed by both parties, which references the MSA.

Under Dealroom's MSA, each SOW must at least describe the services, the deliverables, milestones and acceptance criteria where relevant, the timeline, the fees and payment terms for that engagement, and any additional terms specific to it. If the MSA and an SOW conflict, the MSA prevails, unless the SOW expressly states otherwise and refers to the specific provision it changes.

An MSA suits ongoing relationships where a client expects to engage the same provider for several projects over time and wants consistent terms across all of them.

Who signs it and in which role

Two parties sign:

• The Provider: the business that provides professional services.
• The Client: the business that engages the Provider to perform services.

The Provider acts as an independent contractor. The agreement states that it does not create a partnership, joint venture, agency or employment relationship. The Provider decides how the services are performed (within each SOW), employs and pays its own personnel, and is responsible for their taxes, social security contributions and insurance. Neither party can bind the other without written consent.

Key clauses

The MSA has eleven negotiated clauses and a set of standard clauses that apply in every case.

Payment terms

How quickly the Client must pay undisputed invoices: Net 15, 30, 45 or 60 days from the invoice date. The standard late-payment clause adds interest on overdue amounts, a right for the Provider to suspend work under the affected SOW (with 10 business days' notice once an undisputed invoice is more than 15 days overdue), recovery of collection costs, and a procedure for disputing invoices in good faith within 10 days.

Work product IP ownership

Who owns the intellectual property in work created for the engagement. The skill describes this as often the most negotiated MSA provision, because it affects pricing and the provider's business model. Options: the Client owns all work product; the Provider owns it and grants the Client a perpetual, royalty-free licence for internal use; or the parties own it jointly.

Limitation of liability

The maximum liability of each party: fees paid in the 12 months before the claim; fees paid under the SOW that gave rise to the claim; or twice the annual fees. The standard clause excludes indirect and consequential damages and takes indemnification, breach of confidentiality, wilful misconduct or gross negligence, and death or personal injury outside the cap.

Termination for convenience

Whether either party can end the agreement without cause: no termination for convenience, or mutual termination on 30 or 60 days' written notice.

Warranty period for deliverables

How long the Provider warrants that deliverables substantially conform to their specifications: 30, 60 or 90 days after delivery or acceptance, whichever is later. Separately, the Client must report non-conforming deliverables within 15 business days of delivery, and the Provider then corrects them at no extra cost.

Indemnification scope

Which third-party claims each party must defend the other against: IP infringement only (by the Provider); a standard mutual indemnity for IP infringement, gross negligence or wilful misconduct, and breach of confidentiality; or a broad Provider indemnity that also covers negligence, breach of law and the Provider's acts in performing the services.

Confidentiality duration

How long confidentiality obligations last after the agreement ends: 3 years, 5 years or indefinitely. Under the 3- and 5-year options, trade secrets remain protected indefinitely.

Insurance requirements

What cover the Provider must hold: basic (commercially reasonable cover, no minimums), standard ($1M per occurrence and $2M aggregate general liability plus $1M professional liability), or enhanced ($2M / $5M general liability plus $2M professional liability).

Change order process

How changes to the scope of an SOW are approved: a formal written change order signed by both parties; approval by email followed by a written change order within five business days; or a threshold approach, where changes under $5,000 or 5% of the SOW value may be approved by email and larger ones need a formal change order.

Non-compete and non-circumvention

Whether the Provider is restricted in working for the Client's competitors or customers: no restrictions; non-circumvention only; or a non-compete against named competitors (entered in the deal details) during the term only.

Governing law and jurisdiction

Where disputes are resolved: the default courts of the governing-law jurisdiction (San Francisco, London or Madrid), Delaware courts, or JAMS, ICC, AAA or LCIA arbitration. A custom option lets the parties name their own governing law and courts.

Standard clauses

Every MSA also includes: scope of services and the SOW framework, performance standards (professional and workmanlike work, qualified personnel), client responsibilities (timely access to information, a primary contact, timely review of deliverables), representations and warranties, independent contractor status, force majeure (either party may terminate the affected SOW after 60 days), confidentiality, limitation of liability, the indemnification procedure, late payment and the usual general provisions.

What the two sides usually negotiate

The Provider generally wants faster payment, ownership of its work, lower exposure and freedom to work for others. The Client generally wants longer payment terms, ownership of what it pays for, wider protection and more flexibility. When the two sides choose different options, Dealroom proposes the balanced position:

• Payment: the middle ground is Net 30, which the skill calls the most common business standard.
• IP ownership: the Provider prefers to own and license; the Client prefers to own outright. The neutral option is joint ownership.
• Liability: the Provider prefers a cap per SOW; the Client prefers twice the annual fees. The middle ground is 12 months of fees.
• Termination: the Provider leans to no termination for convenience; the Client to 30 days' notice. The middle ground is mutual termination on 60 days' notice.
• Warranty: the middle ground is 60 days.
• Indemnification: the middle ground is the standard mutual indemnity (IP, gross negligence, confidentiality).
• Confidentiality: the middle ground is 5 years, with 3 years close to it.
• Insurance: the middle ground is standard cover ($1M / $2M plus $1M professional liability).
• Change orders: the middle ground is the threshold-based approach.
• Non-compete: the middle ground is non-circumvention only.

All dispute-resolution options are treated as neutral between the parties.

Jurisdictions and languages Dealroom supports for it

Dealroom drafts the MSA under the law of California, England and Wales or Spain, in English or Spanish. Each jurisdiction adds its own provisions:

• California: an acknowledgement of AB 5 and the California Labor Code, with the Provider warranting independent contractor status; a jury waiver; and CCPA/CPRA compliance where personal information is processed.
• England and Wales: exclusion of third-party rights, liability that cannot be excluded (such as fraud, or death or personal injury caused by negligence), compliance with the off-payroll working rules (IR35), with the Client responsible for any status determination statement, and UK GDPR compliance.
• Spain: Spanish law (Civil Code and Commercial Code), good faith and the Civil Code rules of interpretation, confirmation that the engagement falls under the self-employed workers' statute or commercial law and is not an employment relationship, and GDPR and LOPDGDD compliance.

Common mistakes

• Using a non-compete in California. The skill states that non-compete provisions are void under Business and Professions Code 16600, which is why that option is not offered there. Even non-circumvention may be scrutinised by California courts.
• Overlooking local limits elsewhere. In England and Wales a non-compete must be reasonable in duration and scope; in Spain the skill notes it may require compensation to the restricted party.
• Giving away reusable know-how. Under client ownership, the Provider cannot reuse the custom work for other clients and may raise its prices in return. Under joint ownership, the Provider can use the work for competitors.
• Accepting a per-SOW cap without checking its size. For small SOWs it gives the Client little protection and may limit recovery for problems that affect several SOWs.
• Leaving scope changes informal. The skill presents change orders as the tool to manage scope creep; email approval must still be documented afterwards.
• Ignoring cash flow. Net 60 can have a significant cash flow impact on the Provider, who may respond by charging more.
• Holding too little insurance. The skill notes that insurance is what lets the Provider meet potential claims; basic cover with no minimums offers the Client least assurance.

# 1. Read the clauses, options and the facts it needs
curl https://dealroom.todo.law/api/v1/agent/templates/MSA \
  -H "Authorization: Bearer drk_YOUR_KEY"

# 2. Create the contract (clauses you leave out take the default option)
curl -X POST https://dealroom.todo.law/api/v1/agent/deals \
  -H "Authorization: Bearer drk_YOUR_KEY" \
  -H "Content-Type: application/json" \
  -H "Idempotency-Key: $(uuidgen)" \
  -d '{
    "schema": "dealroom.solo-intake/1",
    "contractType": "MSA",
    "governingLaw": "ENGLAND_WALES",
    "language": "en",
    "dealName": "Example MSA",
    "selectionPolicy": "defaults"
  }'