Introduction
Master Service Agreement means an agreement or contract between two or more parties that underlines the basic terms and conditions of the contract or an agreement. The main important difference between the master service agreement and other agreements is that the Master Services Agreement will have major clauses that will regulate the transactions in the future which induce the commercial relationship between the parties. It is very critical to draft a master service agreement between the parties.
Master Service Agreement
The Master Service Agreement also called MSA is the abbreviation of this form. This agreement or contract will be between two or more parties where the parties mutually agree upon all the terms and conditions of the Master Service Agreement that will govern future or prospective agreements. The terms and conditions of the MSA will apply to all long-term transactions between them. These contracts are essential in industries where there is a bundle of transactions between the service provider and the customer, and each one may have its own work statement.
Objectives of the Master Service Agreement
The main objectives of the Master Service Agreement that is given below:
Simplifies the Contract: In a Master Service Agreement through usual negotiations parties would not have to go back on the terms and conditions of the agreement. These terms, conditions, and major clauses can be utilized from the agreement.
Advanced Negotiations: The parties would have conciliated in advance that relate to the terms and conditions of the Master Service Agreement.
Less Time: By negotiating all the terms and conditions in advance then the parties can prioritize their time in other areas of the law.
Is it Necessary to Have a Master Service Agreement?
In advance, a master services agreement is drafted by the parties for avoiding any form of negotiations between the parties of the contract or an agreement.
If one party makes breaches the agreement then only that party would have to pay damages to the other party.
Through the master service agreement, both parties would not be liable for the breach of the contract or an agreement that is caused. Hence this offers some form of legal damages paid to the parties.
The contract also describes and separates the risk of the parties. Both parties agree on all terms and conditions in a Master Service Agreement.
Advantages of a Master Service Agreement
There are several advantages to setting up Master Service Agreements which include the ability to expedite contract workflows, save money, and increase productivity. Some key benefits of using Master Service Agreements to structure future agreements are mentioned below:
1. Faster setup: -
Master Service Agreements create a framework for a long-term relationship between two companies. Once they are set up the contracts and agreements administered by the Master Service Agreement will be shorter and take far less time to create.
2. Customizable: -
Two Master Service Agreements do not the same as other contracts. It can be customized to fit your business requirements. You can include the language that applies to every subsequent contract like; intellectual property clauses, indemnification agreements, etc.
3. Reduces labor costs: -
Workers are busy. In fact, at the time of work, 24% of workers say that data input is their biggest time suck. You can use the MSAs to highly reduce the amount of input that is required to set up a contract.
4. Consistency: -
The use of Master Service Agreements will assist to create a more consistent environment for working between the two companies. Unless otherwise stated that every new contract accommodates the same set of all the terms, conditions, and working guidelines.
5. Better terms: -
During the negotiation process, an MSA contract that is designed for strengthening long-term relationships, and creating one give both companies opportunities to fight for better terms.
6. Focused contracts: -
For all future transactions, a Master Service Agreement creates a basic framework that allows you to submit separate work statements, service level agreements, and similar types of agreements away from the primary contract at that time you still enjoying the pre-established terms and conditions.
7. Faster renewals: -
Annually, over 50% of top-performing companies renew their contracts, and this is even easier with the Master Service Agreement.
Checklist of Master Service Agreement
Checklist for a standard master service agreement in which including some provisions which is as follows:
Deliverables: The parties disposed of that who will deliver what, when, where, and how.
Geography: The region or area where the work will take place.
Commercials: This includes the pricing, payment schedule, preferred payment method, and format of the currency also mentioned.
Quality control: This details the accepted level of quality of the product or output.
Intellectual property use: In the contract should mention how the parties will utilize the intellectual properties that belong to each other.
Confidentiality: According to the agreement, it is essential to define what information is confidential and to establish that the parties will not share the restricted information with external parties. The MSA also includes accessing such information to sub-contractors and team members of both parties.
Warranty: The provider of products or services promises to offer support for defective or damaged delivery.
Limitation of liability: In case of any lawsuit, then in the Master Service Agreement also define the amount of exposure that faces by each party.
Dispute resolution: In the event of any dispute then identify the governing law and jurisdiction that is applicable and also mentioned the alternative dispute resolution methods like arbitration, mediation, and the applicable rules.
Indemnification: Some common risks and indemnification which include any Injury or death of personnel, damages to property, failure to complete work within the particular timeline, issues with the quality or quantity of deliverables, problems with the payments, etc.
Documents required for registration of a Master Service Agreement
Several documents are required in the Master Service Agreement which are given following:
Identity proof of the government with a photograph
Certificate of incorporation
Residential proof
Both companies submit financial statements for the past financial year
The Procedure for the registration of the Master Service Agreement
The procedure for the registration of the Master Service Agreement is given following:
Once you send in a request, one of our experts will get in touch with you to understand your needs
If further information is needed then we will contact you for the same
After that, we will work on the request and send it to you for review of the documents for registration of the Master Service Agreement within 3 to 4 working days.
Conclusion
It concluded that the Master Service agreement or contract will be between two or more parties where the parties mutually agree upon all the terms and conditions of the Master Service Agreement that will govern future or prospective agreements. The terms and conditions of the MSA will apply to all long-term transactions between them. These contracts are important in industries where there is a bundle of transactions between the service provider and the customer, and each one may have its own work statement. Master Service Agreements include the ability to expedite contract workflows, save money, and increase productivity.
eStartIndia will help you draft all kinds of legal agreements from the comfort of your home.
Get a Free Consultation for Master Service Agreement with Our Top Rated Experts with a simple registration.
Author:
.jpg)
Leave a Comment
Previous Comments