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Both MSAs and SOWs are used in service transaction contracts. The major difference between them is that, while an MSA sets the legal framework for the relationship between contracting parties, an SOW deals with specific projects or transactions.
A master service agreement (MSA) is a fundamental contract outlining the scope of the relationship between two parties, including terms and conditions for current and future activities and responsibilities.
A master service agreement sets forth the terms and conditions that govern the relationship between a supplier and a customer. It covers such matters as delivery, quality, price, and timeframe. A service level agreement (SLA) sets forth specific obligations of a service provider with regard to quality, time, and cost.
This contract is signed only between a customer and a service provider. It specifies the standards and types of services that the latter will offer. Some common clauses of an MSA are confidentiality clause, termination clause, and dispute resolution clause.
A master service agreement (MSA) is a contract that establishes the fundamental agreements between two parties. MSAs allow vendors and clients to agree on basic terms at the outset of a business relationship, which can drastically speed up the negotiation process for future projects and contracts.
The master service agreement covers each party's responsibilities as they relate to human resources, delivery requirements, payment, intellectual property rights, dispute resolution, limitations of liability, data protection, warranties and termination.
At its most basic, an MSA is a contract between two or more parties that establishes what terms and conditions will govern all current and future activities and responsibilities. MSAs are useful because they allow the parties to plan for the future while also speeding the ratification of future agreements.
Master Service Agreements commonly contain indemnification provisions as a mechanism to allocate risk between the customer and service provider. In some cases, such as personal injury and property damage, indemnification is mutual.