Purpose

Many businesses provide several services to clients on an ongoing business. To avoid the need to negotiate the terms of each subsequent service, a business may use a master service agreement (MSA) to cost-effectively set out the general terms of all future services provided. To specify the details of each new service, a statement of work (SOW) can be used to cover the unique terms and requirements for each.

One benefit of this approach is that after the main agreement is established, only service-specific terms may need to be negotiated. This can help reduce the number of issues to be negotiated each time, cutting down the time required to agree on future services. Some of the issues that may be addressed in the MSA include intellectual property ownership, non-disclosure obligations and limitations of liability.