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What are the Areas MSA Agreement Should Address?

This blog talks about the areas that an MSA agreement should address. You will also learn about the purpose of an MSA agreement, along with its roles and responsibilities.

When two businesses work together, they accept an MSA agreement. A simple contract can cover when two parties are working together on a deal. However, if they are looking forward to maintaining a long-term work relationship they need to enter a Master Service Agreement. An MSA agreement makes the negotiation process between two parties simplified and fast-paced.

In basic terms, a contract that jots down the terms of settlement between two parties for future agreements is an MSA agreement.  It contains the roles, responsibilities, and expectations that both parties may have. They help in eliminating any scope of conflict in the future and speed up the contract process in the future. It is a structured scheme that enlists the template of all future actions. With the evolution of circumstances, it can be modified according to the present deal without neglecting the governing terms.

MSA agreements govern various types of agreements. Some of which may be attorney fee allocation and resolution of alternative disputes, work schedules variable to local conditions, purchase orders depending upon the cost of material, and more.

Purpose of MSA Agreement

The main purpose of an MSA agreement is to make the process of negotiation simpler and more efficient. Parties form a business relationship based on the terms of the deal defined at the beginning. They can continue to clear their expectations, rights, and responsibilities as and when required.

Though the companies can still solve their issues in the absence of an MSA agreement, some conflicts are more complicated to resolve. The complexity of the issue might lead to the derailment of the contract. When companies build their business relationship on the foundation of an MSA agreement, they can shift their focus to the more important contract issues.

MSA agreements are detailed contracts that allow the companies to figure out the scope of conflict. It removes the burden of short deadlines by providing them time to find the solution and act upon it. They are the best suite for relationships that are long-term and require time and space for evolution and growth. They can help both parties avoid issues by maintaining their core values even in times of changing circumstances.

When companies sign a Master Service Agreement, they eliminate the hassle of dealing with poor-constructed contracts. Thus, it helps in reducing the risk of litigation and other disputes related to contracts. It ensures that one party does not have to pay the price for the mistakes of the other. It also provides freedom from any sort of financial obligation until and unless they are at fault. This is known as indemnification in legal terms.

The main purpose of an MSA agreement is to act as the bedrock of the long-lasting business relationship that two parties enter. It takes care of any unforeseen conflicts that can occur in the future by considering any potential events in advance. The business world is complicated and many events can cause issues between the two parties at any point in time in the future.

MSA Agreement Roles and Responsibilities 

MSA agreement is responsible for safeguarding the terms of any business contract between the two parties. There are certain points a Master Service Agreement must have in order to ensure the health of a contract:

  • All responsible events cause an issue that either party has to face throughout their business relationship.
  • Actions that both parties will have to take together.
  • Actions that both parties will have to take individually.
  • Delivery and installation, background checks, project management, security, govt requirements, liabilities

What areas should an MSA address?

When parties have to take individual responsibilities it becomes important to understand the points of conflict that may arise. An MSA agreement should cover all the elements that fulfill the negotiated deal, including distributing responsibilities in different areas. It has to address the following:

  • Delivery and installation: It must include the shipment and delivery time of a product. It must be clear which party has to take the step for its first-time setup and installation. It must also be clear which party will be responsible when something unplanned happens.
  • Background checks: It should cover the requirements enlisted by each party for potential future employees, their screening, and background checks.
  • Project management: It is important to decide who is responsible if things go wrong in the future.
  • Security: both parties have to agree on the responsibility and management of payments required for ensuring the security of their product or project.
  • Government requirements: Both parties have to agree on the place of their project which will also cover the state, city, and tax rules implemented in that place.
  • Liabilities: The role of each party should be listed out in situations of mishap to avoid any conflict at the time and help overcome the issue as efficiently as possible.

The process of completion of a contract between two parties can be expensive as well as extensive. Companies spend money on legal fees and an hourly basis. An MSA agreement can help in speeding up the process by simplifying various factors on which both parties have to reach a common ground. It will provide protection to both parties, take far less time than a negotiation, and help in defining responsibility in times of dispute. It also saves money and time as it is easy to go through.

Conclusion

Master Service Agreement takes the legal process to a higher and more efficient level for any business relationship. They act as a template for negotiations and eliminate the need for the recreation of new contracts again and again for different situations of conflict. Technology, consumer markets, and the environment of operation is evolving day by day. So companies have to keep their master service agreements updated and make changes as and when required.

They are more common in the sector of human resources, marketing, and finance. Both parties have to agree on certain terms of the negotiated deal. A contract is written between the two parties to list down all the details of the agreement and the areas of service in the MSA agreement.

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