What Is an MSA in Business? And Why You Shouldn’t Ignore It
You’ve got alignment. The scope looks good. And thankfully, everyone has agreed on the timing and budget. Your business relationship is off to what seems like a great start.
Then, you get an email. It asks you to, “Please review and sign the attached MSA.” With a heavy sigh, you open the MSA. It’s twenty-five pages filled with legal terms and conditions.
This might feel like a stumbling block, but instead, it could lead to a way to streamline your future.
Simplify Ongoing Business
If you run a business, you may have seen one of these before. They can help founders, freelancers, big companies, and anyone with an ongoing business relationship with their contract management.
An MSA is a Master Services Agreement. While it can be lengthy and filled with everything from the scope of service to dispute resolution, there is a good reason for that. When two parties create a solid MSA, they are making everything that comes after the MSA is signed faster, smoother, and clearer.
Even if you’ve seen an MSA before, read on to learn standard components, things you might want to include in future agreements, and more.
MSAs for Current and Future Work
An MSA is the main contract between two parties defining how they will work together. It doesn’t just apply to one job or a single deliverable. It is a legal contract that sets a standard core that will apply to all future work that the two parties do together.
That means future transactions will not start from zero because you will have already gone through the negotiation process for standard terms that will govern your future work.
Instead of negotiating those terms every time, the MSA does it once, up front. After that, you can begin or plan new projects quickly without rehashing the same legal ground every time. That’s especially beneficial if there are long-term business plans in your future. Would you really have time to do a full contract review each time there’s a new task order?
Your Template for Success
An MSA can streamline your workflow. For example, imagine that you run a design studio and have just met a new client. You outline the work you want to do together, and they send you an MSA. Once the MSA is agreed to and signed by the parties involved, you have a solid foundation.
An MSA sits quietly in the background, making future work faster to approve and easier to deliver.
Here is a table explaining what you will typically find or include in an MSA.
| MSA Component | What It Covers | Why It Matters |
|---|---|---|
| Parties and Definitions | Who’s involved and key term definitions | Gets everyone speaking the same language |
| General Terms & Conditions | Broad rules of engagement for all work | Foundation that applies to every project |
| Service Description | High-level categories of potential services | Framework without getting into project specifics |
| Intellectual Property Rights | Who owns what and when they own it | Crucial for protecting work product and innovations |
| Confidentiality & NDA | How sensitive information gets handled | Standard protection for both parties |
| Payment Terms (General) | Overall payment structure and procedures | Financial ground rules for the relationship |
| Liability & Indemnification | Who’s responsible when things go wrong | Insurance policy built into the contract |
| Termination Clauses | How to end the relationship and notice periods | Exit strategy with clear procedures |
| Dispute Resolution | Mediation, arbitration, or court procedures | Hopefully unused but important safety net |
| Governing Law | Which jurisdiction’s laws apply | Critical for legal enforcement |
| Insurance Requirements | Required coverage for both parties | Risk management and protection |
| Compliance & Regulatory | Industry standards and certification requirements | Ensures work meets necessary standards |
| Data Security & Privacy | Data protection and breach notification procedures | Essential in today’s privacy-conscious environment |
| Force Majeure | Unforeseeable circumstances clause | Protection against major disruptions |
| Amendment Process | How changes to the MSA get made | Prevents unauthorized modifications |
SOWs: The Piece That Makes It Work
Once the MSA is signed, you’ll still need a way to define each project. That’s what makes the Statement of Work (SOW) important. You can consider the SOW your project playbook. It’s a detailed game plan that explains what’s happening when and who is responsible for what. Here is a chart that can help you figure out what to put in your SOW.
| SOW Component | What It Covers | Why It Matters |
|---|---|---|
| Introduction / Purpose | High-level project overview and goals | Sets the stage and explains why this work exists |
| Scope of Work | Specific tasks, services, deliverables, and clear boundaries | Prevents scope creep by defining what’s in and out |
| Objectives and/or Goals | Success metrics, KPIs, acceptance criteria | Everyone knows what “done” looks like |
| Deliverables | Tangible outputs with formats, quantities, deadlines | No guessing games about what you’re creating |
| Timeline and/or Milestones | Key dates, phases, review periods | Keeps projects on track with clear deadlines |
| Location and Communication | Remote/onsite work, meeting tools, collaboration platforms | Sets expectations for how teams will interact |
| Project Management | Coordination responsibilities, reporting structure | Someone’s accountable for keeping things moving |
| Assumptions | Preconditions and environmental expectations | Documents what you’re counting on from the client |
| Constraints | Budget, tool, time, or resource limitations | Reality check that keeps everyone grounded |
| Roles and Responsibilities | Who does what (RACI-style works well) | Eliminates confusion about ownership |
| Payment Terms | Cost structure, payment schedule, invoicing | Clear financial expectations upfront |
| Change Management | How scope changes get handled | Process for dealing with inevitable project evolution |
| Sign-Off Criteria | Acceptance and rejection standards | Objective way to determine project completion |
| Legal and Compliance | Confidentiality, IP ownership, liability | References MSA for broader legal framework |
What’s the Difference Between an MSA and SOW?
Here is an easy way to think about it. The difference between them is akin to having a membership agreement with a gym (MSA) versus signing up for specific classes like yoga or kickboxing (SOW). The membership (MSA) covers the general rules, liability, and payment terms. Then each class (SOW) has a different instructor, schedule, and goal.
Why Smart Teams Don’t Skip the MSA
Skipping the MSA might feel like a shortcut to getting down to work. I stress the word feel, because in reality it’s not.
Without it, you end up writing full contracts from scratch each time. Legal reviews get longer. Key terms vary between deals. And if something goes sideways, there’s no consistent fallback.
With an MSA in place, you gain:
- Faster deal cycles
- Consistent protections
- A more professional posture (especially with enterprise clients)
- Less legal overhead across the board
Signing Your MSAs
Here’s where Signus will really help you out.
We built Signus to help teams stay clear and compliant without getting bogged down in documents. With Signus, you can:
- Store signed MSAs in one place
- Track which version each client signed
- Keep your SOWs connected to the master agreement
- Maintain a full approval history, so nothing slips through
Whether you’re running one master agreement or a library of them, Signus gives you the visibility and control to stay protected—and move faster.
Bottom Line
An MSA isn’t just legal overhead. It’s a time-saver. A risk reducer. A way to show you’re serious.
Get it signed once. Then focus on doing great work.
This article is for informational purposes only and doesn’t constitute legal advice. For guidance on your specific situation, please consult a licensed attorney.
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