The definition of a master service contract is relatively simple: it is a two-party contract, in which both parties agree on most of the conditions governing future transactions or future agreements. Master service agreements generally set payment terms, delivery requirements, intellectual property rights, guarantees, restrictions, litigation, confidentiality and labour standards. For example, the MSA can specify who holds the final ownership of new developments, whether royalties are due for products from new discoveries, and to whom and how information can be disseminated without violating confidentiality agreements. Another important clause involves compensation or the distribution of risk among all signatories when a party is sued by an external body. It may be a question of whether all parties are responsible for legal fees or whether each party should follow alternative methods of resolving disputes. For customers, a robust master service contract can ensure you have the right services at the right time. It will also ensure that you have recourse if your service provider does not meet the standard you need. Aurelio Locsin has been writing professionally since 1982. He published his first book in 1996 and is a regular contributor to numerous online publications specializing in consumer, economic and technology issues.
Locsin received a bachelor`s degree in scientific and technical communication from the University of Washington. Master service agreements are important for companies that offer a number of services and want to standardize their terms and conditions for easy use, especially for repeat customers. The words “agreement” and “contract” are often used as if they were the same, but they are not. Black`s Law Dictionary defines an agreement as “a mutual understanding between… their relative rights and obligations. It also notes that it is an agreement that creates obligations between the parties that the law can enforce. An MSA is also defined as a legal document containing separate but similar agreements between the two signatory states. A service-master contract is a contract entered into by two parties during a service transaction. Read 9 min When considering a framework agreement or master service contract, you must consider the following keywords: A master service contract is a contract that imposes most of the conditions between the signatory parties, but not all the conditions.
The aim is to speed up and simplify future contracts. Negotiation, which takes time, takes place once, at the beginning.