A well-drafted Master Services Agreement (MSA) does more than define the legal boundaries of a relationship – it sets out the practical, day-to-day rules that determine how a technology partnership actually functions. For SaaS providers, software developers, IT consultants and managed service providers, these clauses shape everything from how scope is managed and billed, to who owns the intellectual property developed during the engagement, to how the parties will respond when things change or go wrong.
Although every MSA is tailored to the business using it, most follow a similar architecture. What varies is the level of detail and the degree to which the contract reflects the realities of delivering modern software and technology services. At Adventum Legal, our commercial lawyers specialise in preparing MSAs and SOWs for SaaS and IT providers, helping them build contract frameworks that are clear, scalable and commercially sound. If you’d like guidance on your own agreements, our team is available to assist.
In the sections that follow, we take a closer look at the clauses that commonly feature in MSAs and explore how each one influences the way the relationship operates in practice.
Scope of Services
Master Service Agreements don’t typically include a detailed scope of work. Rather, they define the broad categories of services the provider may deliver during the relationship – for example, access to the core platform, implementation support, configuration, integrations, customisations, training or ongoing managed services.
The specifics of each engagement are then documented in a Statement of Work or Order Form, which outlines the exact deliverables, timelines and responsibilities for that particular piece of work. This division is deliberate: the role of an MSA is to establish the high-level boundaries of the relationship, while leaving details as to scope to be documented elsewhere. Any adjustments to the scope of work are usually handled through the contract’s change management provisions, which set out how variations are requested, assessed and approved.
Licence
Where software is involved, an MSA will typically include a licence clause that establishes the overarching rights the customer receives to access and use the provider’s platform during the term of the agreement. Because MSAs often govern long-term relationships involving multiple phases of work, the licence clause sets the baseline rules – such as whether the customer’s rights are non-exclusive, non-transferable and limited to internal business purposes – with the finer commercial details (such as tiers, modules or feature entitlements) typically defined in the relevant Order Form. This ensures the parties have a consistent licensing framework that applies across every SOW or service engagement.
Fees, Payment Terms and Billing Mechanics
SaaS and IT billing models are rarely simple. They can involve subscription fees, usage-based charges, implementation fees, milestone-based payments, consulting rates, support retainers, and third-party costs. The MSA brings order to this by setting out how and when invoices will be issued, when they fall due, how late payments are handled, and whether any fees (particularly prepaid subscription fees) are refundable.
Clear billing terms are a lifeline for SaaS and services businesses, where predictable recurring revenue and cash flow stability are essential. Ambiguity here is one of the fastest paths to dispute.
Authorised Users
In SaaS and IT service arrangements, access to the platform or services is rarely granted to the customer in an unrestricted way. Instead, the MSA generally defines who may use the system by reference to “Authorised Users.” An Authorised User is typically someone the customer has permitted to access the services – usually an employee, contractor or agent who needs the system for business purposes.
Clear drafting is especially important in SaaS arrangements, where access rights often depend on the customer’s subscription model. Whether access is based on users, seats, usage limits or enterprise-wide rights, the MSA should explain who may use the service, how credentials can be used, and when expanded access requires additional fees. This gives both parties certainty and prevents informal creep in how the platform is used.
Usage Restrictions
Usage restrictions define the boundaries of how the customer and its users may interact with the platform. A well-drafted MSA will typically prohibit activities such as attempting to access the source code, reverse engineering or decompiling the software, interfering with system security, or using the service to build competing products.
By setting clear limits on what customers may and may not do within the platform, usage restrictions help preserve the provider’s technology and commercial model, while giving customers a clear understanding of the boundaries that apply to their use of the service.
Acceptable Use
The Acceptable Use section sets behavioural expectations for anyone interacting with the service. While usage restrictions focus on protecting the platform itself, acceptable use provisions focus on how users conduct themselves within it.
These clauses typically prohibit activities such as using the service for unlawful purposes, transmitting harmful or offensive content, engaging in security testing without permission, or attempting to access other customers’ data. For SaaS providers, this is particularly important because inappropriate user activity – whether malicious or accidental – can expose the provider to reputational harm, regulatory risk or security incidents.
Intellectual Property Rights
IP is usually the most sensitive and negotiated part of any tech MSA. The agreement must distinguish between the provider’s existing materials (its platform, code libraries, tools, frameworks and methodologies) and any new materials created as part of the engagement. Without this distinction, a customer could inadvertently gain rights over elements of the provider’s core product.
The agreement must then address whether new materials are owned by the customer or licensed to them. In SaaS, the provider almost always retains ownership of anything new, granting the customer a licence to use it. Assigning ownership to the customer can prevent the provider from reusing generic components and undermine the scalability of future projects.
Confidentiality
Modern SaaS and IT engagements involve access to sensitive information, internal processes, customer data and proprietary systems. The confidentiality clause sets out how this information must be protected. For technology providers, confidentiality obligations often overlap with privacy and security requirements, which may sit in a separate schedule or Data Processing Agreement.
These clauses become even more significant when dealing with regulated industries or enterprise customers who expect specific standards of data handling, breach notification and access control.
Security and Privacy
Security is no longer a “nice to have” in contracts. Customers, particularly in SaaS and IT environments, expect providers to make commitments to implement reasonable technical and organisational safeguards, manage access controls, and respond promptly to security incidents. Many enterprise clients also expect references to recognised frameworks such as ISO 27001 or SOC 2.
Privacy obligations sit alongside these security commitments. An MSA should explain how personal information is collected, stored and processed, and require the provider to comply with applicable privacy laws. It will often include privacy provisions or reference a Data Processing Agreement which outlines data flows, permitted purposes, retention periods and cross-border transfers. Clear privacy terms help customers understand how their data – and the data of their end users – will be handled and ensure that both parties meet their legal and regulatory obligations.
Warranties and Representations
Warranties describe what the provider promises about its services and software, and what the customer confirms on its side of the relationship. For providers, this typically includes assurances that the services will be delivered with due care and skill, that the software will perform in line with its documentation, and that the provider has the rights necessary to grant the customer access to the platform. For customers, warranties usually relate to the accuracy of information they supply, their authority to enter into the agreement, and the lawful nature of the data or materials they provide.
A thoughtful balance of warranties from both sides gives the customer confidence without placing unrealistic expectations on the provider, ensuring the agreement reflects how the service actually operates day to day.
Liability and Indemnities
Liability and indemnity provisions shape the overall risk profile of the MSA by determining who bears responsibility – and to what extent – when problems occur.
Liability clauses typically place a financial limit on what either party can be required to pay and often include carve-outs for serious matters such as personal injury, fraud or wilful misconduct. This structure keeps the commercial risk manageable while still ensuring accountability where it matters most.
Indemnities, on the other hand, set out the specific circumstances in which one party must compensate the other – for example, if the customer’s materials infringe a third party’s rights or if the provider’s software gives rise to an IP claim.
These terms sit at the centre of most procurement negotiations, with customers typically seeking broader protection and higher caps, and providers aiming to avoid obligations that could expose them to disproportionate or uninsurable risk.
Updates and Third-Party Software
Most SaaS platforms evolve over time, and an MSA usually explains how updates, enhancements and new features are rolled out. These clauses clarify that the provider may update the service as needed and may outline when notice will be given for changes that materially affect the customer. This helps set expectations around how the platform will develop during the term of the agreement.
Where the service relies on third-party software, cloud hosting or integrated APIs, the MSA will also address the limits of the provider’s control over those components. It may note that availability or functionality can be affected by changes made by third-party vendors, and may require customers to comply with any associated third-party terms. This ensures both parties understand the dependencies that sit behind the service and reduces the risk of disputes when external systems change.
Term, Suspension and Termination
Nearly every MSA operates for a defined period, and sets the term of duration of the overarching relationship — whether fixed, evergreen with automatic renewals, or continuing until all SOWs or Order Forms have been completed.
The MSA must explain when and how services can be suspended or terminated. Suspension provisions give the provider a short-term mechanism to address problems such as non-payment, security risks or breaches of acceptable use without immediately ending the relationship.
Termination clauses typically include rights to terminate for material breach, repeated non-compliance or insolvency, and occasionally termination for convenience. Termination clauses also cover practical matters: what happens to prepaid fees, how customer data is returned, and which obligations survive after the contract ends.
Dispute Resolution
MSAs often outline how disagreements will be managed. Most agreements require senior representatives to attempt to resolve disputes before escalating to mediation or litigation. This avoids parties running straight to court and supports a more commercial approach to resolving issues.
Ready to dive deeper?
Whether you’re preparing a new MSA or refining your SOW and Order Form templates, Adventum Legal can help you build a contract suite that’s commercially sound and scalable. Speak with our specialist MSA lawyers about your contracting needs.
