What Is a Master Service Agreement (MSA)? + Free Template

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1. What is a Master Service Agreement (MSA)?

A Master Service Agreement (MSA) is a contract that outlines the general terms and conditions between a service provider and a client. In the context of SaaS, the MSA acts as the foundational legal agreement for all ongoing and future services or subscriptions between the vendor and the customer.

The MSA is usually signed once and reused for every future project, order form, or statement of work (SOW) under the same relationship, reducing the need for renegotiation.

2. Why It’s Important for SaaS Companies

Why do SaaS companies use MSAs?

SaaS companies often engage in long-term or repeat business with their clients. Having an MSA in place simplifies procurement, saves time during contract negotiations, and clearly defines the roles, responsibilities, and liabilities of each party.

What does an MSA typically include?

  • Definitions and scope of services
  • Terms of payment
  • Intellectual property rights
  • Data protection and confidentiality
  • Liability and indemnity clauses
  • Termination terms
  • Governing law and dispute resolution

MSAs are particularly important when dealing with enterprise SaaS contracts, where clear legal expectations are crucial for both sides.

How does an MSA differ from a Statement of Work (SOW)?

An MSA outlines the general agreement between the parties, while the SOW defines specific projects or deliverables. Think of the MSA as the legal "framework," and the SOWs as individual project agreements within that framework.

3. MSA Template for SaaS

Here’s a simple outline of a SaaS Master Service Agreement. For legal use, always consult a lawyer or local legal advisor.

MASTER SERVICE AGREEMENT (Sample)

This Master Service Agreement ("Agreement") is entered into on [Date] between [SaaS Company Name], and [Client Name].

1. Scope of Services

[Description of SaaS services and delivery method.]

2. Term & Termination

This Agreement shall commence on the Effective Date and continue until terminated by either party upon 30 days' written notice.

3. Fees and Payment

Payment terms, invoicing frequency, late fees.

4. Confidentiality

Each party agrees to keep confidential all proprietary information.

5. Data Protection

Compliance with GDPR, data processing terms.

6. Intellectual Property

Clarify ownership of software, customer data, custom integrations.

7. Limitation of Liability

Maximum liability amount, types of damages excluded.

8. Governing Law

This Agreement shall be governed by the laws of [Jurisdiction].

9. Signatures

[Both parties sign and date.]

FAQ

Is an MSA legally binding?

Yes. Once signed, an MSA is legally binding and governs the overall business relationship between the SaaS company and the client.

Do I need an MSA for small SaaS customers?

Not always. For self-serve or low-ACV SaaS products, Terms of Use are often sufficient. MSAs are more common with mid-market or enterprise customers.

Can I reuse the same MSA across customers?

You can start with a standard MSA template, but it’s best to review each agreement based on client-specific needs or local regulations.

Where do SOWs fit into the process?

Each Statement of Work (SOW) references the MSA and includes specific details about deliverables, timelines, and pricing for individual projects.