Master services agreement
This Master Services Agreement (the “Agreement”) is made as of [Effective date] (the “Effective Date”) between:
[Provider legal name], a [type of entity] organized under the laws of [Provider jurisdiction], with its principal office at [Provider address] (the “Provider”); and
[Customer legal name], a [type of entity] organized under the laws of [Customer jurisdiction of organization], with its principal office at [Customer address] (the “Customer”).
Background
The Provider provides [type of services, for example consulting, implementation and managed services]. The Customer wishes to engage the Provider from time to time to provide services described in statements of work. The parties want one set of terms to govern all those statements of work.
1. Definitions
“Affiliate” means an entity that controls, is controlled by, or is under common control with a party, where control means owning more than 50 percent of the voting interests.
“Background IP” means intellectual property owned or licensed by a party before the Effective Date or developed independently of this Agreement, including the Provider's tools, methods, templates, software, and know-how.
“Confidential Information” means non-public information disclosed by or for a party (the “Discloser”) to the other (the “Recipient”) that is marked confidential or that a reasonable person would understand to be confidential, including the terms of this Agreement.
“Customer Data” means data and content provided by or for the Customer to the Provider in connection with the Services, including Personal Information.
“Deliverables” means the items the Provider is required to deliver under a SOW.
“Personal Information” means information about an identifiable individual, as defined in applicable Privacy Laws.
“Privacy Laws” means laws that apply to the processing of Personal Information under this Agreement, which may include the Personal Information Protection and Electronic Documents Act (PIPEDA), substantially similar provincial laws, US federal and state privacy laws, and the EU or UK General Data Protection Regulation.
“Services” means the services described in a SOW.
“SOW” means a statement of work or order form signed by both parties that refers to this Agreement.
2. Structure of the relationship
Each SOW is a separate contract that incorporates this Agreement. A SOW must describe at least the Services, Deliverables, timeline, fees and any acceptance criteria. Either party's Affiliates may sign SOWs under this Agreement, and in that case references to the Provider or the Customer mean the Affiliate signing that SOW.
Order of precedence. If documents conflict, the order of priority is: (a) a section of a SOW that expressly states it overrides a named section of this Agreement, for that SOW only; (b) this Agreement; (c) the rest of the SOW; and (d) any other document referred to in a SOW. Pre-printed terms on purchase orders, invoices or portals have no effect, even if accepted electronically.
This Agreement does not oblige the Customer to buy, or the Provider to provide, any minimum amount of Services.
3. Performance of Services
The Provider will perform the Services in a professional and workmanlike manner, in line with generally accepted industry standards, the SOW, and applicable law.
Personnel. The Provider will assign suitably qualified personnel and will make reasonable efforts to keep key personnel named in a SOW on the project. The Customer may ask, for reasonable and lawful reasons, that a person be removed, and the Provider will replace them promptly. Provider personnel on the Customer's premises or systems will follow the Customer's reasonable site, safety and security rules that have been provided in advance.
Subcontractors. The Provider may use subcontractors with the Customer's prior written consent, which will not be unreasonably withheld. The Provider remains responsible for its subcontractors' performance and compliance with this Agreement.
4. Customer responsibilities
The Customer will provide the Provider with timely access to information, personnel, facilities and systems reasonably required, make decisions and approvals promptly, and be responsible for the accuracy of Customer Data and for having the rights needed to provide it to the Provider.
If the Customer does not perform a responsibility and this delays or prevents the Provider's performance, the Provider is excused to the extent of that failure, and the parties will agree a reasonable adjustment through the change process in section 5.
5. Changes
Either party may request changes to a SOW in writing. The Provider will provide a written estimate of the impact on scope, schedule and fees within [5] business days. No change is binding until a written change order is signed by both parties.
6. Fees, invoicing and taxes
Fees. The Customer will pay the fees set out in each SOW. Unless a SOW says otherwise, fixed fees are invoiced on milestones and time-and-materials fees are invoiced monthly in arrears.
Expenses. The Customer will reimburse reasonable travel and other expenses pre-approved in writing and incurred in line with the Customer's travel policy, if provided, at actual cost.
Payment. The Customer will pay undisputed amounts within [Payment terms] days of receiving a correct invoice, by electronic funds transfer to the account specified by the Provider. Any change to payment details must be confirmed through a verified channel before the Customer relies on it.
Disputed amounts. The Customer may withhold amounts disputed in good faith if it notifies the Provider in writing with reasons before the due date and pays the undisputed part. The parties will work to resolve the dispute within 30 days.
Late payment. Undisputed overdue amounts bear interest at [1 percent per month, which is 12 percent per year,] or the maximum rate allowed by law, if lower. If undisputed amounts are more than 30 days overdue, the Provider may suspend Services after 10 business days' written notice.
Taxes. Fees exclude taxes. The Customer will pay applicable sales, use, goods and services, harmonized sales, value-added and similar taxes, other than taxes on the Provider's income, property or employees. If the law requires the Customer to withhold tax, it will gross up the payment unless the Provider can recover the withheld amount, and will provide receipts.
Rate changes. The Provider may change its time-and-materials rates for new SOWs at any time, and for an existing SOW no more than once per year on [60] days' written notice, with an increase of no more than [Percentage] percent.
7. Acceptance
Unless a SOW sets a different procedure, the Customer will have [10] business days after delivery of a Deliverable to accept it or to give written notice of specific failures to meet the agreed acceptance criteria. The Provider will correct reported failures and redeliver. A Deliverable is deemed accepted if the Customer does not respond within the review period or uses it in production for business purposes.
8. Intellectual property
Background IP. Each party keeps all rights in its Background IP. Nothing in this Agreement transfers ownership of Background IP.
Deliverables. Subject to full payment of the fees for a Deliverable, the Customer owns the Deliverables created specifically for it under a SOW, excluding Provider Background IP. The Provider assigns to the Customer all rights it has in those Deliverables and waives, and will cause its personnel to waive, any moral rights in them to the extent permitted by law.
Licence to Background IP. To the extent Provider Background IP is incorporated into a Deliverable, the Provider grants the Customer and its Affiliates a non-exclusive, perpetual, irrevocable, worldwide, royalty-free licence to use, copy and modify it as part of that Deliverable for their internal business purposes. The Customer may not sell or license Provider Background IP separately.
Customer materials. The Customer grants the Provider a non-exclusive licence to use Customer Data and other Customer materials only as needed to perform the Services.
Third-party and open-source components. The Provider will identify third-party and open-source components included in a Deliverable, and those components are subject to their own licence terms. The Provider will not include components whose licence would require the Customer to disclose or license its own proprietary code without the Customer's written approval.
Feedback and general knowledge. Each party may use general skills and know-how gained in performing this Agreement, provided it does not disclose the other party's Confidential Information or infringe its intellectual property.
9. Confidentiality
The Recipient will use the Discloser's Confidential Information only to perform or receive the Services, will protect it with at least the care it uses for its own similar information and no less than reasonable care, and will disclose it only to its and its Affiliates' employees, contractors and professional advisors who need to know it and are bound by confidentiality duties at least as protective.
Exceptions. Confidential Information does not include information that the Recipient can show is or becomes public through no fault of its own, was lawfully known to it before disclosure without a duty of confidence, is lawfully received from a third party without restriction, or is independently developed without use of the Discloser's information.
Required disclosure. The Recipient may disclose Confidential Information when required by law or court order, after giving the Discloser prompt notice where legally permitted and reasonable help to seek protection, and only to the extent required.
Return. On request or termination, the Recipient will return or securely destroy the Discloser's Confidential Information, except copies it must keep by law or in routine backups, which remain protected.
Duration. These obligations last during this Agreement and for [5] years afterwards, and for trade secrets and Personal Information for as long as they remain protected by law.
10. Data protection and security
Roles. For Personal Information in Customer Data, the Customer is the organization in control (or controller), and the Provider processes it on the Customer's behalf only on its documented instructions and to perform the Services.
Obligations. The Provider will: comply with Privacy Laws that apply to it as a service provider or processor; keep Personal Information confidential; limit access to personnel who need it; not sell or share it for its own purposes; help the Customer respond to individual requests and regulator inquiries; and, at the end of the Services, return or delete it as the Customer directs, unless the law requires retention.
Safeguards. The Provider will maintain administrative, technical and physical safeguards appropriate to the sensitivity of the data, including access controls, encryption in transit and at rest where appropriate, logging, and staff training.
Location and transfers. The Provider will store and process Customer Data in [Canada / the United States / the European Union / locations listed in the SOW], and will not transfer it outside those locations without the Customer's prior written consent and any safeguards required by Privacy Laws.
Incidents. The Provider will notify the Customer without undue delay, and in any event within [72] hours, after becoming aware of a breach of security safeguards affecting Customer Data, and will provide the information the Customer reasonably needs to meet its notification and record-keeping obligations.
Data processing addendum. If Privacy Laws require additional terms, such as for EU or UK data or US state laws, the parties will sign a data processing addendum, which will form part of this Agreement.
11. Warranties
Mutual. Each party warrants that it is validly organized, has authority to enter into this Agreement, and will comply with laws that apply to its performance.
Provider. The Provider warrants that: the Services will be performed as described in section 3; for [90] days after acceptance, each Deliverable will materially conform to its specifications in the SOW; and the Provider has the rights needed to grant the rights in section 8.
Remedy. If a warranty in this section is breached and the Customer notifies the Provider during the warranty period, the Provider will re-perform the non-conforming Services or correct the Deliverable at no extra charge. If the Provider cannot do so within a reasonable time, the Customer may end the affected SOW and receive a refund of fees paid for the non-conforming Services or Deliverable.
Disclaimer. Except as expressly stated in this Agreement, each party disclaims all other warranties and conditions, whether express, implied or statutory, including those of merchantability, merchantable quality, fitness for a particular purpose and non-infringement, to the extent permitted by law.
12. Indemnification
By the Provider. The Provider will defend the Customer and its Affiliates against any third-party claim alleging that a Deliverable or the Services, as provided by the Provider, infringe or misappropriate that third party's intellectual property rights, and will pay damages and costs finally awarded or agreed in settlement. This does not apply to claims arising from Customer materials, from changes not made by the Provider, from combination with items not supplied or specified by the Provider, or from use in breach of this Agreement.
Mitigation. If a Deliverable is, or in the Provider's opinion is likely to be, subject to an infringement claim, the Provider may obtain the right for the Customer to keep using it, modify or replace it so it is non-infringing with materially equivalent function, or, if neither is commercially reasonable, take it back and refund the fees paid for it, less reasonable depreciation over [3] years.
By the Customer. The Customer will defend the Provider against any third-party claim alleging that Customer Data or Customer materials, or their use by the Provider in line with this Agreement, infringe that third party's rights or violate law, and will pay damages and costs finally awarded or agreed in settlement.
Mutual. Each party will defend the other against third-party claims for bodily injury, death or damage to tangible property caused by its negligence or wilful misconduct while performing this Agreement.
Procedure. The indemnified party must notify the indemnifying party promptly of a claim (a delay only reduces obligations to the extent it causes prejudice), give it sole control of the defence and settlement, and provide reasonable cooperation at its expense. The indemnifying party may not settle a claim in a way that admits fault for, or imposes obligations on, the indemnified party without its written consent. The indemnified party may take part with its own counsel at its own cost.
This section states each party's entire liability, and the other party's sole remedy, for third-party claims of the kinds described.
13. Limitation of liability
Exclusion of indirect damages. Neither party is liable to the other for any indirect, incidental, special, consequential, exemplary or punitive damages, or for loss of profits, revenue, goodwill or anticipated savings, or loss of data (other than the cost of restoring data from backups), however caused and whether or not foreseeable.
Cap. Each party's total aggregate liability arising out of or relating to this Agreement and all SOWs is limited to the fees paid and payable by the Customer under the SOW giving rise to the claim in the [Liability cap] months before the event giving rise to the liability.
Exceptions. The exclusion and cap do not apply to: the Customer's obligation to pay fees; a party's indemnification obligations under section 12; breach of section 9 (Confidentiality) or section 10 (Data protection and security), for which the cap is [two times] the cap above; liability for death or personal injury caused by negligence; fraud, gross negligence or wilful misconduct; or any liability that cannot be limited under applicable law.
The parties agree that these limits are a reasonable allocation of risk reflected in the fees and apply even if a remedy fails of its essential purpose.
14. Insurance
During this Agreement and for one year afterwards, the Provider will maintain with reputable insurers: commercial general liability insurance of at least [Amount] per occurrence; professional liability (errors and omissions) insurance of at least [Amount] per claim; cyber liability insurance of at least [Amount] per claim where the Provider processes Customer Data; and workers' compensation insurance as required by law. The Provider will provide certificates on request.
15. Term and termination
Term. This Agreement starts on the Effective Date and continues for an initial term of [Initial term] years. It then renews automatically for successive one-year terms unless either party gives notice of non-renewal at least [60] days before the end of the current term. This Agreement continues to govern any SOW in effect when it expires until that SOW ends.
Termination for convenience. The Customer may end any SOW for convenience on [30] days' written notice. The Provider may end this Agreement for convenience on [90] days' written notice, but this does not end SOWs then in effect unless that SOW permits.
Termination for cause. Either party may end this Agreement or an affected SOW by written notice if the other party: (a) materially breaches it and does not cure the breach within 30 days after receiving written notice describing it; or (b) becomes insolvent, makes a general assignment for the benefit of creditors, has a receiver appointed, or becomes subject to bankruptcy or insolvency proceedings that are not dismissed within 60 days.
Effect. On termination of a SOW, the Customer will pay for Services performed and accepted Deliverables up to the termination date, pre-approved expenses incurred, and, if the Customer ended for convenience, reasonable non-cancellable costs the Provider committed to before notice. The Provider will deliver all completed and in-progress work paid for, and each party will return or destroy the other's Confidential Information under section 9.
Transition. At the Customer's request and at the rates in the relevant SOW, the Provider will provide reasonable transition help for up to [90] days after termination.
Survival. Sections 6 (for amounts owed), 8, 9, 10, 12, 13, 15 and 16 onward, and any other terms that by their nature are meant to survive, survive termination or expiry.
16. Non-solicitation
During the term of any SOW and for [12] months afterwards, neither party will directly solicit for employment any employee of the other party who was materially involved in the Services, without the other's written consent. This does not restrict general advertising or hiring of people who respond to it, or who contact a party on their own initiative.
17. Independent contractors
The parties are independent contractors. Nothing in this Agreement creates a partnership, joint venture, agency, franchise or employment relationship. Neither party has authority to bind the other. The Provider is solely responsible for the pay, benefits, taxes and supervision of its personnel.
18. Force majeure
Neither party is liable for failure or delay in performing obligations, other than payment obligations, to the extent caused by events beyond its reasonable control, such as natural disasters, pandemics, war, terrorism, civil disturbance, government orders, labour disputes not involving its own workforce, or widespread failures of internet, power or telecommunications. The affected party will notify the other promptly, use reasonable efforts to mitigate, and resume performance as soon as practical. If an event continues for more than 30 days, either party may end the affected SOW on written notice.
19. Compliance
Each party will comply with anti-corruption laws that apply to it, including the Corruption of Foreign Public Officials Act (Canada) and the Foreign Corrupt Practices Act (US), and with applicable export control and sanctions laws. Neither party will offer or accept any bribe or improper payment in connection with this Agreement.
Records and audit. The Provider will keep accurate records supporting its time-and-materials invoices for [3] years after the relevant invoice. On 30 days' notice and no more than once a year, the Customer or an independent auditor bound by confidentiality may review those records during business hours. If an audit shows overbilling, the Provider will promptly refund the overbilled amount and, if it exceeds 5 percent for the audited period, pay the reasonable cost of the audit.
20. Publicity
Neither party will use the other's name, logo or trademarks in any publicity, marketing or customer list without the other's prior written consent.
21. Governing law and disputes
This Agreement is governed by the laws of [Province or state] and the federal laws of [Country] that apply there, without regard to conflict-of-laws rules that would apply the law of another place.
If a dispute arises, the parties will first try in good faith to resolve it by discussion between people with authority to settle it, for at least 30 days after one of them gives written notice describing the dispute. If the dispute is not resolved in that time, either of them may start proceedings in the courts located in [City, Province or state], and each submits to the non-exclusive jurisdiction of those courts.
Nothing in this section prevents anyone from seeking urgent injunctive or other interim relief from any court with jurisdiction to protect confidential information, intellectual property or property, or to prevent irreparable harm.
22. Notices
Any notice under this Agreement must be in writing and delivered by hand, by courier, by registered mail, or by email to the address shown in the signature block or another address given by notice.
A notice is received: when delivered, if delivered by hand or courier on a business day before 5:00 PM local time at the place of receipt, and otherwise on the next business day; on the fifth business day after mailing, if sent by registered mail; and when sent, if sent by email before 5:00 PM local time of the recipient on a business day with no automated message that it was not delivered, and otherwise on the next business day.
Routine operational communications may be sent by any reasonable means, but a notice of breach, termination or a claim must also be sent by a method listed above.
23. Entire agreement and general terms
Entire agreement. This Agreement, including any schedules and documents it expressly refers to, is the entire agreement about its subject matter and replaces all earlier discussions, proposals and agreements about that subject matter, whether written or oral.
Amendments and waivers. A change to this Agreement is effective only if it is in writing and signed by each party. A failure or delay in enforcing a right is not a waiver of it, and a waiver of one breach is not a waiver of any other breach.
Assignment. No party may assign this Agreement without the prior written consent of the others, which will not be unreasonably withheld, except that an organization may assign it without consent to a successor to all or substantially all of its relevant business or assets by giving written notice. This Agreement binds and benefits the parties and their permitted successors and assigns.
Severability. If any provision is found invalid or unenforceable, it will be limited or removed to the minimum extent necessary, and the rest of this Agreement stays in full force.
Interpretation. Headings are for convenience only. The words “including” and “includes” mean “including without limitation”. Amounts are in [Currency] unless stated otherwise. A reference to a law includes any amendment or replacement of it.
Language. The parties have expressly required that this Agreement and all related documents be drawn up in English. Les parties ont expressément exigé que la présente entente et tous les documents connexes soient rédigés en anglais.
24. Counterparts and electronic signatures
This Agreement may be signed in any number of counterparts, each of which is an original and all of which together form one document.
The parties agree that this Agreement may be signed and delivered electronically, including through an electronic signature service such as eSora Sign. An electronic signature, and a signed copy delivered by email or as a PDF, has the same legal effect as a handwritten signature on a paper original, to the extent permitted by applicable law, including the U.S. Electronic Signatures in Global and National Commerce Act (ESIGN) and the Uniform Electronic Transactions Act (UETA) as adopted in the relevant state, Part 2 of the Personal Information Protection and Electronic Documents Act (PIPEDA), and provincial electronic commerce legislation in Canada.
Each party consents to receive this Agreement and related notices electronically, and agrees that the electronic record of the signing process, including any certificate of completion and audit trail, may be used as evidence that this Agreement was signed and of when it was signed.
Signatures
By signing below, each signer confirms that they have read and agree to this Agreement and, where they sign for an organization, that they are authorized to bind it.
PROVIDER
Organization: [Legal name of organization]
Name: ______________________________
Title: ______________________________
Signature: ______________________________
Date: ______________________________
Email for notices: ______________________________
CUSTOMER
Organization: [Legal name of organization]
Name: ______________________________
Title: ______________________________
Signature: ______________________________
Date: ______________________________
Email for notices: ______________________________