A master service agreement is defined as a contract two parties enter into during a service transaction. This agreement details the expectations of both parties.
A master service agreement is when two parties agree to a contract that will settle most details and expectations for both parties. It'll state what each group has to do to honor its end of the bargain. It'll also show which services apply in the master service agreement.
The goal of a master service agreement is to make the contract process faster. It also should make future contract agreements simpler. A master service agreement is also called a service level agreement (SLA). It spells out:
1) Confidentiality: The parties both agree they won't share any secrets of the company with outside parties.
2) Delivery requirements: The businesses decide who will deliver what and when.
3) Dispute resolution: Should issues come up, the Master Service Agreement outlines how the parties will resolve their conflict.
4) Geographic locations: Both groups agree on where the employees will do the job.
5) Intellectual property rights: The parties decide how to handle ownership and regulation of all patents and other IPs. The client will get all the IP in some instances. In others, the vendor provides perpetual rights while keeping his or her IP and patents.
6) Limitations of liability: The Master service Agreement lists who is the responsible party in the event of a lawsuit.
7) Payment terms: These terms show what the estimated cost is as well as the schedule for payment.
8) Venue of law: The Master Service Agreement identifies the place where a legal resolution will occur. This could include arbitration or a specific state or federal court.
9) Warranties: The groups agree on the scope and the coverage of the warranty.
10) Work standards: This section of the Master Service Agreement defines what each party regards as acceptable work. Not living up to the work standards often causes disputes.
A Master Service Agreement may also cover a few other areas, such as business ethics, network and property access, and social responsibilities. The goal is to hammer out as many details as possible in broad strokes. That way, corporations don't waste too much time and money in negotiations.