Master Service Agreements: What Belongs in the MSA and What Belongs in the SOW
Priya Sharma
· Corporate Legal & Compliance Counsel· 3 min read
A master service agreement exists to avoid renegotiating liability, confidentiality and IP for every project. That saving is only realised if the boundary between the MSA and the statement of work is drawn clearly — otherwise both documents cover the same ground differently.
- ✓The MSA holds terms that do not change between engagements.
- ✓The SOW holds scope, price, timeline and acceptance for one engagement.
- ✓An order of precedence clause resolves conflicts between them.
- ✓Term and termination must address what happens to live SOWs.
What belongs in the MSA
- Definitions and interpretation.
- Confidentiality and data protection.
- Intellectual property ownership and licensing.
- Representations, warranties and disclaimers.
- Limitation of liability and indemnities.
- Insurance requirements.
- Term, termination and survival.
- Governing law, jurisdiction and dispute resolution.
- Notices, assignment, force majeure and boilerplate.
What belongs in the SOW
Scope of work, deliverables and acceptance criteria. Timeline and milestones. Fees, payment schedule and expenses. Project-specific assumptions, exclusions and dependencies. Named personnel where relevant. Any service levels specific to that engagement.
Anything that will differ from one engagement to the next belongs here, and nothing that will be identical every time should be.
Precedence
State which prevails. The common formulation is that the MSA governs except where a SOW expressly states that it varies a specified clause of the MSA for that engagement only.
Without that qualifier, an MSA that always prevails prevents the parties agreeing a project-specific liability cap even when both want to.
Termination and live work
Specify what happens to SOWs in progress when the MSA terminates. The usual approach is that live SOWs continue to completion under the MSA terms, which survive for that purpose, while no new SOWs may be issued.
Without it, terminating the MSA may terminate projects mid-delivery, which is rarely what either side intends.
Frequently asked questions
### What is the difference between an MSA and a contract?
An MSA is a framework contract setting out terms that apply to multiple future engagements. It is itself a contract, but commercial work is transacted under statements of work issued beneath it, each incorporating the MSA terms.
### Can a SOW override the MSA?
Only if the MSA permits it. A well-drafted precedence clause allows a SOW to vary specified MSA clauses for that engagement where it expressly says so, while the MSA otherwise prevails. Without the qualifier, project-specific variations become impossible.
### What happens to ongoing work if the MSA is terminated?
It depends on the drafting. The usual approach is that statements of work already in progress continue to completion, with the MSA terms surviving for that purpose, while no new SOWs may be issued after termination.
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Frequently Asked Questions
What is the difference between an MSA and a contract?
An MSA is a framework contract setting out terms that apply to multiple future engagements. It is itself a contract, but commercial work is transacted under statements of work issued beneath it, each incorporating the MSA terms.
Can a SOW override the MSA?
Only if the MSA permits it. A well-drafted precedence clause allows a SOW to vary specified MSA clauses for that engagement where it expressly says so, while the MSA otherwise prevails. Without the qualifier, project-specific variations become impossible.
What happens to ongoing work if the MSA is terminated?
It depends on the drafting. The usual approach is that statements of work already in progress continue to completion, with the MSA terms surviving for that purpose, while no new SOWs may be issued after termination.
Priya Sharma
Corporate Legal & Compliance CounselSpecializing in commercial contract litigation, Section 138 NI Act recovery, commercial property leases, and MSMED Act compliance.