A Master Service Agreement (MSA) is meant to simplify your business, not complicate it. The goal is to agree on the legal "rules of the game" once so that every future project (SOW) can be signed in minutes.
However, it is easy to fall into common MSA mistakes—like accidental IP transfers or uncapped liability—that can haunt your business for years.
Use this checklist to audit your agreement across these four critical layers.
1. The Core Clauses: What Must Be Included?
If you're looking for a direct answer on what to include, ensure these MSA clauses are covered:
- Precedence Clause: Defines which document wins if the MSA and SOW contradict each other.
- Payment Terms & Taxes: Sets deadlines (Net-30) and makes the client responsible for sales tax.
- Intellectual Property (IP) Rights: Distinguishes between your "Background IP" and the new "Foreground IP."
- The Payment Trigger: Ensures IP ownership only transfers to the client after full payment is received.
- Termination Rules: Allows for termination "for convenience" with 30–60 days' notice.
- Confidentiality: Establishes rules for handling sensitive data and trade secrets.
- Limitation of Liability: Caps your total financial risk, usually at 12 months of fees.
- Indemnification: Protects you if client-provided assets infringe on third-party rights.
- Insurance Requirements: Lists the specific coverage you must maintain (e.g., Cyber, Professional Liability).
- Dispute Resolution: Designates a local venue for legal fights to avoid travel costs.
2. Streamlining MSA Reviews (Speed)
For many SMEs and scaling startups, the biggest risk isn't just legal—it's deal friction.
If your MSA takes three weeks to sign, your cash flow suffers.
This section of the checklist focuses on removing the administrative hurdles that slow down revenue.
- Standardized SOW Templates: Does the MSA include a pre-approved "Exhibit A" so your team doesn't have to draft project details from scratch for every new deal?
- The "Green Zone" Playbook: Do you have a MSA Playbook that gives your sales team the authority to accept minor, pre-approved redlines without involving a lawyer?
- Administrative Simplicity: Does the agreement allow for digital signatures and email-based "Change Orders" to keep the project moving without a formal amendment every time?
3. Reducing Business Risk (Protection)
When dealing with larger private sector firms or highly regulated industries, your checklist needs to move from "speed" to "security." These angles ensure you are covered when the stakes—and the potential legal costs—are higher.
- Affiliate Usage & Subsidiaries: Can the client’s sister companies use this agreement? If so, ensure they are also bound by the same liability and payment rules to prevent "risk leakage."
- Non-Solicitation: In professional services, your people are your product. Does the MSA prevent the client from poaching your staff or contractors?
- Data Security & Breach Protocol: For SaaS or IT vendors, does the checklist include a clear timeline for notifying the client if a data breach occurs, helping you stay compliant with privacy laws?
- Audit Rights: If your pricing is based on volume or usage, do you have the right to verify their numbers once a year to ensure you aren't being underpaid?
4. Strengthening the Relationship (Longevity)
Lastly, a good MSA should set the stage for a long-term partnership rather than a one-off transaction. These final points ensure the agreement supports business growth over time.
- Performance Metrics (SLAs): Are expectations for uptime or response times clear so there are no "he-said, she-said" arguments later?
- Publicity & Logo Rights: Can you use the client's logo in your marketing? Securing this in the MSA is much easier than asking for permission during the middle of a project.
- Renewal Mechanics: Does the agreement auto-renew, or does it require a manual signature to keep the relationship going?
The Bottom Line
An MSA is only as good as its implementation.
Even a "perfect" document can fail if your team doesn't follow the rules regarding SOW formation or payment triggers.
We recommend operationalizing this checklist and turning it into a Master Service Agreement Playbook. By standardizing your negotiation positions, you move from "reacting" to redlines to "directing" the deal toward a win-win outcome.
Try our free MSA Playbook Generator today.
