The Master Service Agreement (MSA) dictates the legal and financial rules for every future project you do with a client. If you don't get these clauses right in the "parent" agreement, you'll be forced to fix them in every single Statement of Work (SOW).
To move faster, most firms use an MSA Playbook to standardize these positions.
Here are the 5 MSA clauses you should include:
1. Precedence
When the MSA says one thing and the SOW says another, you need a "tie-breaker."
- The Clause: State that the MSA governs legal issues (liability, indemnity, IP) while the SOW governs project specifics (deliverables, dates).
- The Goal: Prevent a rushed SOW from accidentally overriding your corporate liability protections.
2. IP Ownership & The Payment Trigger
Define exactly what the client owns and when they own it.
- Background vs. Foreground IP: Explicitly retain ownership of your pre-existing tools and "know-how" (Background IP).
- Payment Trigger: State that ownership of new work (Foreground IP) only transfers to the client after you receive final payment in full. This is your best leverage against non-payment.
3. Financial Mechanics & Margin Protection
Your MSA should handle the "hidden" costs of service delivery so they don't eat your profit.
- Taxes: The client must be responsible for all sales and use taxes.
- Late Interest: Define a monthly interest rate for overdue invoices.
- Suspension of Service: Secure the right to "pencils down" if a client falls behind on payments without being in breach of contract.
4. Liability Caps
You cannot scale with "unlimited" risk.
- The Cap: Limit your total liability to a specific dollar amount—usually the total fees paid by the client in the 12 months preceding the claim.
- Consequential Damages: Explicitly exclude "indirect" or "lost profit" damages.
5. Insurance & Indemnification
Enterprise clients will not sign without these.
- Insurance: List the specific coverage you maintain (Professional Liability, Cyber).
- Indemnity: Ensure the client indemnifies you if they provide assets or data that infringe on a third party's rights.
Final Step: The Verification
Knowing the clauses is the theory; signing them correctly is the practice.
Use our Master Service Agreement Checklist to audit your final draft before you sign to ensure your "red lines" haven't been compromised during negotiation.
If you want to automate this entire process, our free MSA Playbook Generator can turn these standards into a ready-to-use rubric in minutes.
