MSA review checklist
15 things to check in every Master Services Agreement before you sign. No legal jargon. Just the clauses that matter and what to look for in each one.
Limitation of Liability
Check the cap. Is it proportionate to the contract value? A liability cap should reflect the actual risk involved. If the cap is set at a fraction of the contract value, you're carrying most of the risk yourself.
Uncapped liability or caps set unreasonably low. Either extreme leaves you exposed.
Indemnification
Who indemnifies who? Is it mutual or one-sided? Indemnity clauses should be balanced. If only one party is providing protection, that party is shouldering all the legal and financial exposure.
One-sided indemnity that puts all the risk on you.
Payment Terms
What are the payment terms? 30 days is standard for most industries. Longer terms affect your cash flow and can signal that the other party wants to hold your money as long as possible.
Anything over 60 days is a red flag. It puts unnecessary pressure on your working capital.
Termination Rights
Can both parties terminate? What's the notice period? You need a clear exit route. Check whether termination is for convenience or only for cause, and whether you can walk away if things go wrong.
Termination rights that only favour one side. If they can leave but you can't, that's a problem.
Auto-Renewal
Does the contract auto-renew? What's the notice period to opt out? Auto-renewal is common but the notice window matters. Miss it by a day and you're locked in for another term.
Short notice periods under 30 days that trap you into renewal before you've had time to evaluate.
Intellectual Property
Who owns the IP created during the engagement? This is critical for any work involving software, designs or content. Make sure you retain rights to your pre-existing IP and that new IP ownership is clearly defined.
Broad IP assignment clauses that hand over rights to your pre-existing work.
Confidentiality
Are the obligations mutual? Is the definition of confidential information reasonable? Both parties should be bound by the same rules. The definition should be specific enough that you know what's covered.
Overly broad definitions that classify everything as confidential, making normal business difficult.
Data Protection
Does the contract reference GDPR? Is there a Data Processing Agreement? If personal data is involved, you need to know where it's processed and stored. Missing DPA clauses can lead to regulatory trouble.
No mention of GDPR or data processing when personal data is clearly involved.
Force Majeure
Does the clause cover the right events? Force majeure has become much more important since 2020. Check whether it includes pandemics, cyber attacks and supply chain disruption. A vague clause is almost as bad as no clause.
Narrow force majeure that only covers "acts of God" and ignores modern risks.
Non-Compete / Restrictive Covenants
Are there restrictions on working with competitors? These clauses can limit your future business. Check the scope, geography and duration. A six-month restriction in your sector is very different from a two-year global ban.
Broad non-competes with no geographic or time limits. They may not even be enforceable, but they'll cost you to challenge.
Governing Law and Jurisdiction
Which country's law governs? Which courts have jurisdiction? This matters more than people think. If a dispute arises, you'll need to deal with it in the jurisdiction specified. Make sure it's somewhere you're comfortable with.
Foreign jurisdiction that would make any dispute expensive and impractical to pursue.
Assignment
Can the other party assign the contract to a third party without your consent? This matters if you chose them specifically for their expertise or reputation. You don't want to wake up and find your contract has been handed to someone else.
Unrestricted assignment rights that let the other party transfer obligations to anyone.
Warranties and Representations
What's being warranted? Are the warranties realistic and achievable? Warranties should reflect what each party can actually deliver. Overly ambitious warranties set up future disputes.
Warranties that are impossible to meet or that expose you to breach claims for normal service delivery.
Dispute Resolution
How are disputes handled? Is there a mediation step before court proceedings? Mediation first saves time and money. Going straight to litigation should be a last resort, not the default.
No escalation process. Straight to litigation means higher costs and slower resolution.
Entire Agreement Clause
Does the contract say it supersedes all prior agreements? This is standard, but it matters. If anything important was agreed verbally or in emails during negotiations, it needs to be in the final contract. Otherwise it doesn't exist.
Verbal promises not captured in the written agreement. Once you sign, only the document counts.
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