Drafting Master Service Agreement

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A Master Service Agreement, as the name suggests, is a contractual arrangement between two parties, out of which one is a service provider and the other is the client. This agreement entails the terms and conditions that govern the purpose for which the service provider has been hired, the consideration or payment for such services, the mode, and instalments in which such payment is to be made etc.


The Master Service Agreement entails the following clauses:

  1. Identification of Parties:The agreement begins by identifying the master and the service provider.
  2. Purpose and scope of work: It then should define the work and purpose for which the service provider is being hired.
  3. Compensation: It should provide for the consideration, remuneration or compensation against which the services are being offered to the client. It should ideally also enumerate upon the mode, instalments, conditions etc. for such payment.
  4. Termination: it should provide as to when the agreement would cease to operate. It may be time based and terminate after the duration of the agreement has ended, or it could be work based and last until the performance is complete or the project is finished. On the alternative, it may also operate on a perpetual basis, subject to termination by notice.
  5. Intellectual Property Rights: This clause should address the issue of assigning intellectual property rights. It is based on this clause that it is decided that whether the invention or creation or services offered by the service provider restricts the associated intellectual property rights to such provider or whether such creation would be deemed to be made by the company.
  6. Confidentiality and Non-Compete: This clause is inserted for the purpose of protecting the competitive edge or proprietary or unique technology, method or activity of doing business. This prevents the service provider from disseminating such information. The noncompete clause the service providers from entering into contractual engagements with competitors of the business.
  7. Indemnity: this cluse is for protection of both parties against losses arising from such arrangement and from the services which are being provided here under.
Master service agreement

Process of drafting master service agreement


  1. It establishes a legal binding obligation on each party to perform their part
  2. It can be used in a court of law in case of any dispute or breach
  3. It can help remove ambiguity as to the job or tasks which need to be performed
  4. It can give protection to the client and the company’s business information
Master service agreement

Advantages of Master service agreement


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