Master Service Agreements for Tech Companies: What Must Be Included
- Delta Law
- Oct 11, 2024
- 3 min read
For growing technology and SaaS companies, a Master Service Agreement is one of the most important legal documents in the business. It governs the commercial relationship with customers, clarifies obligations, and protects your intellectual property and revenue.
Many tech founders start with borrowed or template MSAs in early stages. While this can work temporarily, once enterprise sales, integrations, data access, and recurring revenue come into play, your MSA becomes a core business asset.
A well drafted MSA reduces negotiation time, limits legal exposure, and creates clarity between business teams. Below are key elements that every technology company should ensure are included before sending agreements to customers.
Scope of Services and Deliverables
The MSA must clearly define the services and deliverables you are providing. Ambiguity leads to scope creep, disputes, and project delays.
Your agreement should establish:
What is included in the service
What is outside the scope
How services are requested, approved, and documented
The relationship between the MSA and Statements of Work or Order Forms
Clear scope language protects your team and sets expectations with enterprise buyers.
Term and Renewal Framework
Technology contracts often involve renewals and ongoing subscriptions. Your MSA should specify:
The term of the agreement
Renewal mechanics
Termination rights and notice requirements
Whether auto renewal applies and how cancellation works
Strong renewal language improves revenue predictability and reduces churn risk.
Payment Terms and Pricing
The MSA should include payment timing and consequences for non payment. Common elements include:
Billing cycles and invoicing terms
Late payment interest
Suspension rights for unpaid accounts
Fee increases for renewals
Clear payment language protects cash flow and reduces administrative conflict.
Intellectual Property Ownership
Software and technology companies must protect their code base and proprietary systems. Your MSA should establish:
That the company retains ownership of its IP
Limits on customer use of the technology
Restrictions on copying, reverse engineering, or sublicensing
Ownership of improvements, feedback, or custom features
This clause is critical to safeguarding your technology assets and valuation.
Data Ownership and Privacy
Tech companies handle sensitive data. Your MSA should address:
Data ownership
Data usage rights
Storage, access, and security obligations
Compliance with privacy laws
Customer responsibilities in providing data
Reference to a Data Processing Addendum when necessary
Clear data language builds trust and prepares you for enterprise compliance requirements.
Confidentiality
Both parties should agree to protect confidential information, including:
Technical and business information
Pricing and terms
Customer and vendor information
Product roadmaps
A strong confidentiality clause protects strategic information and customer trust.
Service Levels and Support Terms
SaaS and cloud based companies must outline support expectations. Consider defining:
Service levels and uptime expectations
Support response timelines
Maintenance windows
Escalation procedures
This helps align internal operations with customer expectations and reduces disputes.
Limitation of Liability
This is one of the most heavily negotiated clauses in technology agreements. A limitation of liability clause reduces your exposure in the event of a dispute. It typically includes:
A financial cap on liability
Exclusions for specific types of damages
Clarification on indirect and consequential damages
Negotiating this properly ensures you do not take on unreasonable financial risk.
Termination Rights
Your MSA should clearly address how the relationship can end, including:
Termination for convenience or breach
Notice periods
Refunds or final payments
Access to data upon termination
A well structured termination clause protects you from sudden disruption and ensures a clean transition.
Why a Strong MSA Matters
A strong Master Service Agreement prevents confusion, reduces legal back and forth, and shortens sales cycles. It protects your IP, limits liability, and sets your company up for scale, especially when selling to enterprise customers.
A well drafted MSA is not simply a legal requirement. It is a revenue enablement tool.
Book a Consultation
If you are preparing to sell to enterprise customers or want to strengthen your commercial contracts, you can book a consultation below to discuss your Master Service Agreement needs.
