A Master Service Agreement (MSA) is the basis for long-term business partnerships. It is a contract that defines the main terms and conditions for other agreements, allowing the parties to make changes without affecting every single contract.
You can think of other agreements as three branches, each representing a deal or an agreement for a specific part of a larger business relationship. An MSA is the stem of said tree. It’s the starting point of the business relationship. It sets the overall terms and conditions, enabling the parties to revise minor aspects of the relationship without impacting the other contracts. It is a single document that clarifies the expectations and scope of the relationship, saving time and money and reducing legal risks.
What is included in a master service agreement?
MSAs are a collection of the contracting details of a business relationship, and as such, they include terms and conditions that won’t change drastically. Because most of these relationships are unique, the contents of an MSA can vary quite a lot. However, there are key elements that need to be outlined, such as:
- Party Information:
The first section of the master service agreement identifies all parties involved in the business relationship and their respective details. This includes addresses, contacts, and roles.
- Scope of the Relationship:
The scope of the partnership needs to be defined here, along with the goals that every party aims to achieve. It also outlines the duration of the relationship, deadlines to be met, deliverables, and expectations.
- Confidential Information:
This section sets out the rules and obligations for the use and disclosure of confidential information. It also includes confidentiality clauses, eliminating the need to repeat it in other contracts for better safekeeping.
- Payment Terms:
This section outlines the specific payment terms and conditions of the partnership, including the methods of payment, payment amounts, payment schedules, invoicing, and penalties.
- Requirements and Liability:
Another section needs to outline the duties and responsibilities of each party involved in the agreement. It also indicates the remedies and consequences if any party breaches, defaults, or terminates the deal.
How do you manage a master service agreement?
The more contracts you manage, the more challenging a task it becomes. However, with the help of tools like Zeal, managing MSAs and the contracts they govern becomes a lot easier. CLM allows you to access, verify, confirm, and draft contracts with ease. Here are some of the benefits of using contract management software for MSAs and their contracts:
- Control and compliance: By keeping all contracts in one place and using automated workflows to process them consistently, you can ensure that you meet your contractual obligations.
- Costs and risks: CLM can help save you time and money by automating tasks and reducing errors. It can also identify and help you avoid potential risks associated with your contracts.
- Relationships: You can improve your communication and collaboration with your vendors and partners, thereby strengthening your business relationships.
Overall, MSAs can help you save time and money, reduce legal risks, and clarify the expectations and scope of the relationship. However, they require careful management and oversight.
Zeal simplifies the process of creating, reviewing, approving, signing, storing, and analyzing contracts by bringing them all together in one place. Additionally, it seamlessly integrates with other systems like Salesforce and JobDiva, making your workflow more efficient.
If you’re interested, you can schedule a demo here.