Drafting a Master Service Agreement and Statement of Work

A Master Service Agreement is entered into when one party is providing services to the other, but it is on a continual basis or when the scope of services are only broadly fixed. It’s different from an SLA (Service Level Agreement) in as much the MSA is broadly an agreement between two entities or persons to render certain services but the terms of the service such as the time frame, the deliverables, the payment terms, etc. are not fixed.

After an MSA is entered into, the parties enter into Statements of Work (SOW) or Work Orders (WO) which contains the details specific to that particular project. Each SOW / WO is a binding document that relies on the MSA for interpretation in the event of any dispute.

If you are in the services industry or want to have a long term association with a company or person for certain things, where the specifics for each deliverable / project are yet to worked out, you will need an MSA and SOW’s to be entered into.

Thus, while an SLA will contain all details pertaining to the deliverables, the MSA will contain broad details of the engagement and may contain some of the other terms such as term and termination, and dispute resolution. More often than not, the SoW or WO will contain exact terms on the deliverables, representations and warranties, consequences for breach thereof,and dispute resolution clauses. If there is a conflict between the terms of an SoW and the terms of the MSA, it would need to be specified which would prevail. Hence, such a clause would also be usually present in either the SoW or the MSA.

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