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TERM OF A MASTER SERVICES AGREEMENT

The term of a consulting agreement that is a Master Services Agreement (MSA) may be for an extended period, because the scope of work may, in fact, be a series of scopes of work that are defined at different points in time over the course of several years. An MSA allows for the two parties to quickly renegotiate future transactions or agreements since they can rely on the terms of the existing master agreement.

RESUMING A MASTER SERVICES AGREEMENT

Once the much lengthier master agreement has been finalized, the consulting engagement may start and stop several times but the parties are able to negotiate the “scope of work”, which is usually in the form of a schedule that is attached to the agreement, fairly quickly. Since an MSA lasts quite a long time, conditions for revision or amendments to the MSA (as opposed to changes in scope) will, of course, be useful.

These amendment clauses usually require the approval of both parties in order to take effect. There may also be a provision for certain terms to change on a periodic basis. For example, an MSA contract might have a five-year term, but a provision that allows for the contractor’s hourly rate to be changed at a certain point in time each year to account for inflation.

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