Master services agreement
A master services agreement sets the legal terms for future work with a services vendor. It usually commits no money; the statements of work signed under it do.
Framework: Sets terms, commits no money. Excluded from spend totals.
Key takeaways
- Count spend from the statements of work, never from the master agreement.
- Record the master agreement's term separately, because it can end before or after its statements of work.
- A master agreement with nothing under it is either dormant or missing its paperwork.
What does a master services agreement commit?
Terms, not money. It covers liability, payment terms, confidentiality, ownership of work and how statements of work are agreed.
Adding its value to a spend total next to its statements of work counts the same money twice.
How does its term work?
Many master agreements are evergreen and continue until either side ends them on notice. Others have a fixed term and renew.
When a statement of work has no end date of its own, the master agreement's term may govern it. The register shows which clock applies.
What to record
- Term type and end date, if any
- Termination for convenience and notice
- Which statements of work sit under it
Frequently asked questions
Why does the register flag a master agreement with nothing under it?
Either the work has stopped or the statements of work were never filed. Both are worth knowing before a renewal.
General working knowledge about commercial contracts, not legal advice. Your own agreement governs.