Master service agreements: What they are and how to create one

If you work with the same customer or service provider across multiple projects, you probably don’t want to negotiate the same contract terms every time a new piece of work begins. A master service agreement (MSA) gives you a baseline to work from, setting terms for the broader relationship. Then you can use statements of work (SOWs) to define individual projects, with details such as scope, deliverables, timing, and price.

This structure can save you from starting from scratch, but it also creates more documents to manage. Before long, you might have one MSA alongside several SOWs, an amendment, and a renewal. You need to know which documents belong together, what you’ve agreed to, and what needs signing next.

Here’s how MSAs work, what to include in yours, and how to keep all those documents moving.

If recurring agreements are taking up too much of your team’s time, ⁠talk to a specialist about how Dropbox Sign can help your team move agreements forward faster.

Disclaimer: This information is for general purposes only. It isn’t legal advice and shouldn’t replace counsel from a licensed attorney.

What is a master service agreement and how does it work?

An MSA is a contract that sets baseline terms for an ongoing business relationship. Instead of negotiating those terms for every new project, you can agree to them in the MSA and use separate project documents, often called statements of work.

For example, if you’re hiring the same agency for a series of projects, your MSA might cover payment terms, intellectual property, confidentiality, liability, termination, and applicable law. When you’re ready to start the next project, its SOW can focus on what actually changes: the work, schedule, approval process, and price.

You may also see the term master services agreement. Both terms are abbreviated as MSA.

When should you use an MSA?

An MSA can be useful when you expect the relationship to continue beyond one project. For example:

• You’re planning repeat work with the same customer or service provider
• Different parts of your business buy services from the same provider
• Negotiating the same baseline terms keeps slowing down new projects
• The same security, data protection, insurance, or compliance requirements apply each time

For a one-off project, putting everything into a single contract may be simpler.

For an ongoing relationship, you’ll have to think beyond getting the first MSA signed. Every new SOW, amendment, and renewal gives you another document to prepare, approve, send, sign, and keep track of. Keeping those documents together makes it easier to see what’s current. A consistent ⁠contract management process can help.

Master service agreement vs statement of work: What’s the difference?

The easiest way to understand master service agreement vs statement of work is to look at what changes from project to project.

Your MSA usually deals with terms intended to carry across the relationship, such as payment rules, ownership, allocation of responsibility, termination, and applicable law.

Your SOW usually applies to one project: what you’re buying or delivering, when the work is due, how it will be approved, how much it costs, and who’s involved.

That means one MSA can support several SOWs. When you prepare a new SOW, make sure it identifies its governing MSA and follows the process that agreement sets for approving new work.

What happens if an MSA and SOW conflict?

Say your MSA sets one payment deadline, but a new SOW contains another. Which one applies?

Start with the signed agreements. Look for sections with names such as “Order of Precedence,” “Conflicts,” “Entire Agreement,” or “Amendments.” They might tell you which document applies and what has to happen for an SOW to change an MSA term.

Don’t assume the newest or most specific document automatically wins.

One useful master service agreement example comes from a ⁠2009 MSA between Intelenet Global Services and Apria Healthcare filed with the SEC. Its order-of-precedence clause says the MSA and its schedules take priority when a conflict with an SOW cannot be reconciled. The SOW takes priority only for the MSA provisions it specifically identifies as inconsistent.

So, under that particular agreement, simply putting a different payment deadline into an SOW wouldn’t necessarily override the MSA.

That’s one negotiated example, not a rule for every MSA. Your agreement might take a different approach. Always check the precedence and amendment provisions before the next SOW goes out for signature.

Once the document has been reviewed and is ready to send, ⁠online contract signing with Dropbox Sign can help you turn it into a signature request and track its progress.

Send your MSA for signature

Turn the agreement into a signature request, track who still needs to sign, and keep the completed record with the SOWs governed by it.

Create an online contract

What should a master service agreement include?

If you’re looking for a master service agreement template or master service agreement checklist, remember that no single version will suit every relationship. Your services, risks, and applicable law all matter.

Here’s a practical starting point for the conversation with your counsel:

• Who’s agreeing to what: Identify the parties, effective date, covered services, term, and renewal process.
• How money changes hands: Address fees, invoicing, payment deadlines, expenses, taxes, and late-payment terms.
• Who owns and protects what: Cover intellectual property, confidentiality, data protection, and security.
• How risk is handled: Consider warranties, liability, indemnification, and insurance.
• How the relationship ends: Set out termination requirements and what happens to unfinished work, payments, and data.
• How disputes are handled: Identify applicable law and the agreed process for resolving disagreements.
• How future documents fit in: Explain how SOWs become effective, how you can amend the MSA, and which document controls when terms conflict.

Pay extra attention to that last point. If you’re going to create SOWs repeatedly, everyone involved should understand how a new one becomes effective and whether it can change the MSA.

Once you’ve settled on approved agreements for recurring use, ⁠Dropbox Sign templates can reduce setup by reusing documents and signer fields. The template helps with the workflow around the agreement. It doesn’t replace legal review of the contract itself.

Where do SLAs, NDAs, and purchase orders fit?

Your MSA might have company.

A service-level agreement (SLA) usually sets measurable service targets, such as uptime or response times. A non-disclosure agreement (NDA) focuses on confidential information. Your SOW describes the individual project.

A purchase order can be trickier because it might arrive with another set of standard terms. Whether those terms become part of your contract depends on the transaction, the documents, the conduct of the parties, and applicable law.

For transactions involving goods, UCC § 2-207 might be relevant. Article 2 doesn’t govern contracts solely for services; states can adopt different versions of the UCC, and courts might interpret those rules differently. If your MSA involves services, goods, or both, counsel should determine what applies.

If you need to change an agreement that’s already in place, it can also help to understand the difference between an ⁠addendum and an amendment.

How do you manage an MSA once you’ve created it?

Getting the MSA signed isn’t the end of the workflow. It’s the document you’ll come back to as new work starts.

A simple process can make the documents that follow much easier to handle:

1. Check the MSA before preparing a new SOW: Confirm how the new project should be approved, whether the SOW can depart from the MSA, and what happens if the documents conflict.‍
2. Standardize what you send repeatedly: Once counsel approves the language, reusable templates can save you from rebuilding the same document and signature fields each time.‍
3. Prepare the right document for the right signers: With Dropbox Sign, you can add signature blocks and other signer fields, pre-fill information you already know, and send the reviewed agreement for signature.‍
4. Keep an eye on what’s waiting: If you’re sending SOWs across several customers or projects, checking every request manually adds up. Dropbox Sign can automate reminders and give you visibility into request status, so you can see what’s still outstanding.‍
5. Keep the completed agreement with its related documents: When another amendment or SOW arrives months later, you’ll want to be able to find the executed MSA and understand how the documents relate.

Dropbox Sign helps with preparing, sending, signing, and tracking your documents. It doesn’t determine what your contract should say, whether a particular agreement is enforceable, or which document controls when terms conflict.

Send and track MSAs and SOWs with Dropbox Sign

After you sign the MSA, the relationship might produce a series of statements of work, amendments, and renewal documents. Preparing each document, following up with signers, and checking its status can create repetitive work.

Dropbox Sign can help with the signature process. Turn reviewed MSAs and SOWs into reusable templates, add the required signer fields, pre-fill information you already know, send them for signature, automate reminders, and see which requests are still waiting.

These features help your team prepare, send, sign, and track agreements. They don’t decide what the contract should say or which document controls when terms conflict. Review those questions before sending the materials and keep the completed MSA and its related documents together.

If you need to choose a signing method, compare the types of electronic signatures.

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What does MSA stand for?

MSA can mean master service agreement or master services agreement. Both names refer to the same type of contract.

Does an MSA replace a statement of work?

Usually not. Your MSA sets terms for the broader relationship, while each SOW describes a particular project. You can use the two together, with one MSA supporting multiple SOWs.

Can a statement of work override an MSA?

It might, depending on what your agreements say and whether you followed the required process. Check the provisions explaining which document controls and how the MSA can be changed.

Is a master service agreement legally binding?

An MSA is a contract. Whether a particular MSA is binding and enforceable depends on how it was created, what it says, and the law that applies. Ask your legal counsel to review your specific agreement.

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