Master Service Agreement

Everything you need to know about getting a Master Service Agreement on Goodlawyer: pricing, scope of work, benefits, and frequently asked questions.

  1. What is a Master Service Agreement?
  2. Pricing and Scope
  3. What is the Process?
  4. Why does my business need Master Service Agreements?
  5. What risks will this protect my business from?
  6. Frequently Asked Questions
  7. Book a Master Service Agreement

 


What is a Master Service Agreement?

Master Service Agreements, also called “MSAs”, are typically used where multiple agreements stemming from the same client or similar related services are required. They consist of one customized Master Service Agreement and a custom-drafted Statement of Work (SOW) template. The MSA is drafted to cover the overarching terms and conditions of the service relationship (such as confidentiality, intellectual property assignment, and terms of payment), while the SOW details the expectations and deliverables for each specific project or service activity. Well-drafted MSAs save time and legal costs by allowing parties to re-use the same contractual framework for related services.

Master Service Agreements are extremely common in professional services, including accounting, advertising, information technology, and consulting of any kind. This is because they combine the rigor of the Master Service Agreement with the flexibility of the Statements of Work to protect both parties’ interests without inhibiting their ability to respond to new projects.

 



Pricing and Scope

Contractor and service provider relationships can vary drastically, which means the complexity of Master Service Agreements and therefore the price varies as well. At Goodlawyer, part of our mission is to always provide upfront fixed prices for legal services, so we've created a basic and complex Master Service Agreement to give business owners more choice and control.

This service is for businesses looking to outsource multiple related projects or ongoing services to a contractor or service provider. It is also for service providers that repeatedly offer the same standard services with terms and conditions that do not greatly vary between projects or clients.

 

Basic ($980 + Tax)

$815 legal fee + $165 service fee

Suitable for:

  • Customers that receive, or service providers that provide standard services that require a low degree of negotiation or collaboration between the parties.
  • Agreements that use a fixed-price fee structure, including payment installments.
  • Agreements with a dollar value less than $100,000.

Includes:

  1. Client intake meeting 
  2. Custom-drafted Master Service Agreement.
  3.  A customized Statement of Work template, which can be adapted for each specific project.
  4. One round of minor revisions. 

Where customization efforts exceed the "basic" threshold, the Master Service Agreement moves to the Complex tier outlined below.

Complex ($1,470 + Tax)

$1,225 legal fee + $245 service fee

Suitable for:

  • Customers that receive, or service providers that provide customized services that require a higher degree of negotiation or collaboration between the parties.

Includes all service elements from the Basic tier. The inclusion of any of the below criteria will make your Master Service Agreement “complex”:

  1. Nature of services to be provided fall into any of the following categories:
    1. Software development;
    2. Professional services (accounting, engineering, etc.);
    3. Regulated industry-specific services (e.g. food services, consumer marketing, cannabis, health products, etc.).
  2. The dollar value of the Agreement is greater than $100,000.
  3. The initial project plan or Statement of Work (SOW) still needs to be negotiated or agreed to and a consultation phase is required.
  4. The Agreement involves sharing third party (employee, customer, patient, etc.) personal information between parties or across jurisdictions).
  5. The provision/completion of services under the agreement requires a high degree of collaboration between the service provider and the customer. 
  6. The transaction covered by the Agreement takes place outside of Canada.
  7. Services are provided in a business-to-consumer context (rather than a business-to-business context). 
  8. Any IP assignment arrangement deviating from full IP rights assigned to the customer.
  9. The Agreement provides for the use of change orders. 
  10. A time and materials or customized hybrid fee structure will be used.
  11. The customer retains control with respect to any of the following:
    1. Oversight over personnel providing services (i.e. approval over which service provider personnel can complete the work, etc.);
    2. Customer policies, rules, or directives that the service provider is required to comply with (e.g. security practices, health and safety procedures, etc.);
    3. Approval of the use of subcontractors;
  12.  The service provider is required to have and maintain a minimum level of insurance under the Agreement. 
  13. The customer has step-in rights if the service provider fails to provide satisfactory services in a timely manner (e.g. the right to suspend performance or have services performed by an alternate provider).
  14. Exceptions to general limits on liability (e.g. for gross negligence, liabilities covered by insurance, etc.)
  15. The Agreement provides for liquidated damages. 
  16. A dispute resolution escalation mechanism is provided for in the Agreement (e.g. ADR, followed by negotiation and mediation, followed by litigation or arbitration). 
  17. Obligations on termination of the agreement are extensive (e.g. exit plan/transition services agreement, requiring immediate payment of outstanding invoices, etc.).
  18. The service provider is prevented from supplying the same or similar services to the customer’s direct competitors.

Where customization efforts exceed the “complex” threshold, a custom price quotation is suitable. Your lawyer will always seek your approval on custom quotes before proceeding — no surprises.

 

Custom

Includes all service elements from the Basic & Complex tiers. The inclusion of any of the below criteria will make the matter subject to a custom quote:

  1. The agreement will cover the provision of both goods and services.
  2. Multiple service providers are parties to the Agreement, or multiple customers with shared obligations are parties to the Agreement.

Other Considerations

Already using a Master Service Agreement but want to ensure it’s meeting your business’s needs? Book a contract review with a Goodlawyer at $25 per page to have your Master Service Agreement assessed.
 

What is the process?

  1. Book a call: Pick a time to discuss your Master Service Agreement with a Good Lawyer. They'll help you determine if you need a Basic or Complex agreement.
  2. Design your Agreement: You’ll have a call with your Good Lawyer where they will collect all the required information to draft a Master Service Agreement that meets your business’s needs.
  3. Design your Statement of Work template: Your Good Lawyer will work with you to draft a customized Statement of Work template that can be easily adapted for new clients or projects.
  4. Receive your Agreement: You will receive digital copies of the Master Service Agreement and Statement of Work template, ready for use.

 


Why does my business need Master Service Agreements?

Set the right expectations.

Whether you are providing the services or looking to hire a contractor, a Master Service Agreement will protect both parties. MSAs create a legally binding contract that ensures everyone is on the same page regarding what work is expected to be done and under what terms and conditions.

Save time and money.

Using a professionally-drafted Master Service Agreement means you can re-use the same contractual framework for related services or projects. This avoids the need to draft a new agreement from scratch for each new project, saving you time and legal fees. 

Increased flexibility.

A well-written Master Service Agreement means more options. Your Good Lawyer can open up the door to the use of subcontractors, intellectual property protections, and warranties, among other things.

 


What risks will this protect my business from?

Avoid lengthy and costly disputes.

A Master Service Agreement will provide guidance to both the hiring party and the service provider if any confusion about the relationship arises. For example, how is payment calculated? When do payments become due? Is the service provider entitled to any IP rights created throughout the duration of the agreement? A well-written Master Service Agreement should clearly answer these types of questions to avoid lengthy and costly disputes.

Avoid unintended employment liabilities.

It’s important to make sure that Service Agreements, including Master Service Agreements, are drafted so that they don’t accidentally create an employee-employer relationship that burdens the hiring party with additional liabilities. For example, employers are liable for meeting minimum employment standards, whereas independent contractors are allowed to contract out of these standards. If a worker is misclassified and an employer-employee relationship is later found, the employer may be on the hook to compensate the employee. A professionally drafted Master Service Agreement will help ensure that an employee-employer relationship is not accidentally created.

 


Frequently Asked Questions

What is the difference between a Master Service Agreement (MSA) and an Independent Contractor Agreement?

Independent Contractor Agreements are typically used when the scope of work is limited to a single project or single client. They consist of a single contract and a new contract needs to be created for each new project or customer. Master Service Agreements are often used where multiple agreements stemming from the same client or similar related services are required. One MSA is drafted to cover the general terms and conditions of the relationship, while a Statement of Work template is used to outline the expectations and deliverables for each specific project. Your good lawyer will advise you on whether an independent contractor agreement or MSA is more appropriate for your business needs.

What’s the difference between a Master Service Agreement and an Employment Agreement?

Master Service Agreements are tailored for independent contractors or service providers, not employees. Independent contractors providing services under an MSA are typically described as “self-employed” meaning they run their own business. In contrast, Employment Agreements are intended to govern the employer-employee relationship. It’s important to understand the difference between the two because in an employment relationship, employees have different rights while employers have different responsibilities such as tax deductions and employment insurance contributions. Additionally, while you are able to contract out of minimum employment standards with independent contractors (e.g. overtime pay, etc.), those standards always apply to employees. Some signs that you might be hiring an employee and not a contractor include you retaining control over the time and manner in which work is to be done, providing tools for the worker, and covering all associated operating costs on behalf of the worker (e.g. paying for office space or software licenses).

Learn more about the difference between Employees and Independent Contractors here.

What if I need more than one Statement of Work?

This service includes the development of a customized Statement of Work template that you will be able to easily modify for future projects. If you would like your lawyer to help draft more Statements of Work, you can discuss it with them. Any additional work is subject to extra fees. Your lawyer will always discuss this with you for your approval before proceeding.

Do I need a lawyer in my province?

Generally, no. Master Service Agreements can typically be used across the whole country. If your business has some nuances that require local expertise, your lawyer will let you know and Goodlawyer will set you up with another lawyer who can help.

 


"Consistently professional, knowledgeable, reliable. I recommend Goodlawyer, particularly to small business owners."

Deborah, June 2021 — 5-Star Google Review


 

Are you ready to start growing your business?

Book a Master Service Agreement

 

Your lawyer will assess your situation and make recommendations on which complexity tier you should consider accordingly.

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