Master Services Agreement and First SOW

Try to send your draft before the client's procurement team sends its own, because the first draft becomes the text both sides mark up. A free standard form gets you there fast. Common Paper, a contract software company, publishes a professional services agreement¹ drafted by a committee of dozens of attorneys from tech vendors, procurement teams and law firms.

You fill in its cover page once, then a statement of work for each project. The standard terms stay as published, and any change goes on the cover page, where both sides can see it.

Whatever form you use, check which document wins when the MSA and an SOW disagree. Common Paper's form lets the SOW win, so a careless SOW can override the legal terms. Have whoever negotiated the MSA read every SOW before it's signed.

Write the SOW so a stranger could tell whether each deliverable arrived and met the bar. The Federal Acquisition Regulation, the rulebook for US federal purchasing, sets a similar test. Performance-based service contracts must include measurable performance standards² for things like quality, timeliness and quantity, and a method for assessing the work against them.

There's no late fee in Common Paper's form, and that's deliberate. In the drafting committee's experience, payment disputes were more often a customer's oversight than a deliberate act. A client that disputes an invoice must still say so within the payment period and pay the undisputed part on time. Want a late fee anyway? Add it on the cover page.

Under US law, copyright in a work belongs at first to its author³, usually the provider whose team made it. A transfer to the client is valid only in a writing the owner signs⁴. Your MSA and SOW are that writing: their wording decides what the client gets, and when.

Common Paper's form assigns the deliverables to the client and lets the SOW pick the moment. "As created" favors the client, and "upon payment" favors the provider. The drafting notes¹ explain why. Withholding ownership is often a provider's only bargaining chip with a client that won't pay, while ownership that waits on payment can leave the client's title in doubt.

Carve out what the provider brought, too. Its existing tools, templates and code stay its own, and the client gets a license to them only as needed to use the deliverables. The form works this way. It also allows third-party materials, such as open-source code, only if the SOW permits them and the client approves in writing (email counts).

Buying the work? The form's SOW has an option that counts unfinished drafts as deliverables, in case the project stops early.

A liability cap limits what either side can owe the other. On Common Paper's cover page, you set the general cap as a multiple of the fees, a fixed dollar amount, or whichever is greater. The multiple, such as 1x or 2x, applies to fees paid or payable in the 12 months before the claim.

Count fees payable, not just paid. Otherwise, as the form's notes point out, a client could pay a fraction of what it agreed to and shrink the cap to match.

For riskier claims, such as those involving personal data, Common Paper's notes describe a trend toward a higher cap, or "supercap." Fully uncapped claims, they add, have come to be seen as hard to justify. Write the indemnification clause alongside the cap, since it covers claims from outsiders, such as someone alleging the deliverables copy their work.

The cover page can also set insurance minimums, such as errors and omissions (professional liability) cover. The US Small Business Administration describes professional liability insurance⁵ as protection for service businesses against losses from "malpractice, errors, and negligence." Check your policy's limits before agreeing to a minimum.

An MSA should outlast each project. Common Paper's agreement runs until 12 months after the last SOW ends, so a client who returns within that year needs only a new SOW.

The standard terms let either side end an SOW for serious trouble, such as a material breach left unfixed 30 days after notice. So does a force majeure event, such as a major earthquake, that halts the work for 30 days in a row. Neither side can walk away from a live project just because it wants to.

Put any right to cancel midway into the SOW, with a notice period and payment for work done. With no SOW active, either side can end the agreement for any reason.

If the client sends its own contract, a contract review lists what you'd commit to and the changes to ask for. When your draft comes back marked up, a redline comparison tracks every change across rounds. The tool at the top of this page fills in Common Paper's agreement and a first SOW from your proposal.