Free template
Free Master Services Agreement Template
Picture a company that repairs air conditioners. One of its clients, an office building, calls it every few months. If the two sides sign a brand-new contract before every visit, they waste time and argue about the same things again and again: when to pay, who pays for damage, how to cancel.
A master services agreement template solves this. It’s one main contract that a client and a service provider sign when they plan to work together many times. It sets the general rules once: how payment works, who is responsible if something goes wrong, what insurance is needed, and how either side can end the cooperation.
Each specific job then gets its own short document, a statement of work (SOW). The SOW says what exactly will be done, by when, and for how much. The MSA stays the same; only the SOWs change.
One thing to remember when you fill in the MSA template: whatever you write in the MSA applies to every future job. So choose terms that fit the jobs you usually do.
Is an MSA the Right Document for You?
Copy section linkAn MSA contract makes sense when the same client and contractor expect to work together more than once. Here are some typical situations:
| Situation | What the parties want | Documents to use |
|---|---|---|
| An office building manager has hired the same HVAC company three times this year. Before the next repair, she asks for one contract that covers all future visits. | Agree on payment, insurance, and liability once, instead of signing a new contract for every repair | MSA + a short SOW for each repair visit |
| An electrical company signs a new client: a restaurant chain with five locations that will need regular maintenance. | Work on the company’s usual terms, the same ones it uses with all its other clients | MSA based on the electrical company’s own template |
| A construction company is renovating several apartment buildings. It hires a plumbing firm and a roofing firm to work on all of them over the next year. | Use the same terms with every subcontractor on every building | MSA, usually prepared by the construction company |
| A software startup hires a freelance security consultant for an audit now and more projects later in the year. | Set the rules once, then quickly start each new project | MSA + SOW for each project |
The MSA only sets the rules. Work starts when both sides sign an SOW. If a client signs an MSA but no SOW, it hasn’t ordered anything, and the contractor hasn’t promised to do anything.
When a different contract fits better
- The client and contractor agree on one job and have no plans for more: a service contract.
- The contractor provides consulting or development services: an independent contractor agreement for consulting or software development.
- A staffing agency sends workers that the client manages day to day: a staffing services agreement.
- The client buys goods, not services: a vendor agreement.
MSA and SOW: What Each of Them Adds
Copy section linkThe MSA and SOW have one main difference: the MSA holds what stays the same from job to job, and each SOW holds what changes.
| MSA | SOW | |
|---|---|---|
| Who prepares it | The contractor (its standard terms) or a large client (its own form) | Usually the contractor, since it describes its work and price |
| Who signs it | Both parties | Both parties |
| When it is signed | Once, before the first job | Before each new job |
| What it covers | How payment works: fixed price, hourly, or in stages | The scope of work |
| That the contractor is an independent business, not an employee | Start date, deadlines, and stages | |
| Who pays for losses, what insurance is needed, the warranty | The price of this job | |
| How to end the cooperation and how much notice to give | What the client gets at the end | |
| Keeping information private, which state’s law applies | How the work will be checked, when the contractor can access the site |
Some optional terms can go in either document: extra costs the client pays back (materials, permits, travel), who brings the tools and materials, and access to the client’s property.
Choose only the terms that fit your work
A standard master agreement template may ask what kind of services the contractor provides: trade work (like plumbing or electrical), technical work, or professional services (like consulting). Terms about property access and permits make sense for on-site work, like installing air conditioners or repairing electrical panels. A consultant who works remotely doesn’t need them and can leave them out.
What if the MSA and an SOW say different things?
If there are any mismatches between an MSA and an SOW, the MSA wins. The SOW can change the MSA terms only if it clearly names which part of the MSA it changes and says that both sides agree to change it.
In other words, a new SOW can’t quietly rewrite your general terms.
An electrical company’s MSA with a property manager says the client pays within 30 days. For one urgent repair, the client agrees to pay within 15 days.
If the SOW only says “Payment due in 15 days,” the 30 days from the MSA still apply. For the 15 days to work, the SOW should say something like: “For this SOW only, the parties agree to change the Payment Terms section of the Agreement: payment is due within 15 days after the work is completed.”
Outcome: the client pays faster for this one job, and all other jobs stay for 30 days.
How the Contractor Gets Paid
Copy section linkThere are three options for how you can set up payment. Pick the one that matches how you usually work:
| Option | How the price is set | When the client has to pay | When it works |
|---|---|---|---|
| Fixed price | One set amount for each job, written in the SOW | Within a set number of days after the work is finished | When the work scope is clear |
| Hourly | An hourly rate; the contractor sends invoices weekly, monthly, or after each stage | Within a set number of days after each invoice | When the cost of work is hard to estimate in advance |
| In stages | The total price is split into parts in the SOW | After each stage of the work is done | Long projects |
Extra payment terms you can add
- Discount for paying early: the client gets a percentage off if it pays the full amount within a set number of days.
- Interest for paying late: the client pays interest on the overdue amount. The rate can be per month or per day. The interest can’t be higher than state law allows, and that limit is different in each state.
- Holding back part of the payment: the client keeps a small percentage of the price until the work is finished properly, then pays it out. In construction, state law may say when this money has to be paid.
- Extra costs the client pays back: materials (with an agreed markup), permits and fees, and travel and hotel costs when the job is far away.
- Taxes: you choose who pays sales tax and other taxes on the services, the contractor or the client.
Inspection and When the Job Counts as Done
Copy section linkWhen a job is done, the client needs time to check it. Each SOW can describe how this happens: what the client checks, how much time it has, and whether both sides sign a Services Acceptance Act, a short document confirming the work was accepted by the client.
If an SOW says nothing about this, the MSA agreement works as a backup. The client gets the number of days for checking that you set in the MSA, counting from the day the contractor reports in writing that the work is finished. If the client finds problems during this time, the contractor fixes them at its own cost.
Give the client time to check before the payment is due
The payment deadline and the checking period are usually set separately, and the numbers don’t match. For example, the client may have 10 business days to check the work, but payment is due in 7 days.
That leads to arguments: either the client pays for work it hasn’t checked, or it delays the payment. Make the payment deadline at least as long as the checking period. For example, 10 business days to check and 30 days to pay leaves time to fix any problems.
Protect yourself with a warranty
Some problems show up only after the checking period is over. For these, you can add a warranty clause. It lasts for the number of months you choose after the work is finished. The warranty doesn’t cover normal wear, events no one could control (like a flood), or damage caused by the client.
A maintenance company replaces the water heaters in an office building. Six weeks later, one of them starts leaking. The checking period is over, but with a 12-month warranty, the contractor fixes the leak for free, without a new SOW or a new price.
Contractor, Not Employee: Status and Licenses
Copy section linkThe MSA document says the contractor is an independent business, not the client’s employee. That shows what both sides intend, but what really matters is how the work happens in practice. The contractor can work for other clients, and it uses its own people, tools, and materials. If the client sets the contractor’s working hours and controls every step, a court or tax authority may still treat the contractor as an employee, whatever the contract says.
Check the contractor’s license before the first job
In many states, certain work (like construction, electrical, or plumbing) requires an up-to-date license. Without one, the contractor can lose the right to get paid. The client should check the license before signing the first MSA service agreement.
Hiring a freelancer in New York
If the contractor is a freelancer or a one-person business providing services in New York, a state law called the Freelance Isn’t Free Act may apply. It requires a written contract that lists the services, the rate, and the payment date when the work is worth $800 or more (one job, or several jobs with the same client within 120 days). The client must also keep the contract for at least 6 years. The law doesn’t apply to construction contractors.
The MSA’s payment terms, together with the job details in each SOW, can cover these requirements. Startups that hire solo consultants should keep this in mind.
Indemnity, Insurance, and the Law That Applies
Copy section linkThese optional terms are the ones the other side’s lawyer or manager usually reads first. Here’s what to pay attention to.
Insurance
The MSA typically requires the contractor to have insurance. It can be:
Liability insurance for damage or injuries it causes;
Property damage insurance;
Workers’ compensation for its own workers who get hurt on the job.
The contractor shows a certificate of insurance as proof.
But a certificate only shows that the contractor has a policy. It doesn’t give the client any rights under it. If the client wants the contractor’s insurance to protect it too, the client has to be added to the policy as an “additional insured.” The insurer does this with a written change to the policy, called an endorsement.
Indemnification
Imagine a contractor’s worker leaves a cable on the floor, and a visitor trips and sues the client. Under the indemnification term, the contractor covers the client’s costs for this claim, including lawyers’ fees.
The rule works both ways and is fair to both sides: each party pays only for problems it caused. If the client was partly at fault, the contractor doesn’t cover that part. This matters especially in construction. Many states don’t allow contracts that make one company pay for another company’s mistakes.
State’s law
Choose one state. Its law will be used to interpret the contract, and its courts will handle any dispute. Usually, that’s the state where one of the parties is based.
For construction on property in Texas, you cannot choose another state’s law. For jobs in Texas, choose Texas.
Other clauses an MSA can include:
- Confidentiality: both sides keep each other’s private business information secret, even after the MSA ends.
- Force majeure: neither side is responsible for delays caused by events it can’t control, like natural disasters or government lockdowns. If such an event lasts longer than the number of days you choose, either side can end the MSA.
- Notices, entire agreement, annexes: standard final terms that explain how the parties send official messages and which documents are part of the contract.
How to Terminate an MSA
Copy section linkUsually, either side can end the MSA or a single SOW by sending written notice a set number of days in advance. This number should be stated in the MSA. If the MSA ends, all the jobs in progress end with it, unless both sides agree otherwise in writing. The contractor still gets paid for the work it has done, and for costs it can’t cancel.
Pick the notice period with your longest job in mind. If a typical maintenance contract lasts 3 months, a 10-day notice lets either side leave right in the middle of it. A 30-day notice gives you time to finish the work or hand it over.
How to Create, Agree on, and Sign Your MSA in Loio
Copy section linkThis is how an MSA is often signed: a file goes back and forth by email, changes get lost in the replies, and the signed copy sits somewhere in someone’s inbox. A year later, nobody remembers which version both sides actually signed.
With Loio, you do everything in one place, in 3 steps:
Prepare
Open the master services agreement template in Loio Templates and answer simple questions. Your MSA is ready in a few minutes.
Agree on the terms
Send the MSA to the other side. If they want to change something, they edit or comment right in the document, so you both work on one version instead of five email attachments. Not sure about a term? Use AI Summary to check the draft for risky points before you agree.
Sign
Send the MSA for signature by email. If one side’s representative has to sign first, set the signing order. Electronic signatures have the same legal force as handwritten ones when both sides agree to sign electronically (ESIGN Act).
The signed MSA is saved in your account with a record of who signed it and when. That’s the version every future SOW will refer to.
How do I write a master service agreement?
The easiest way is to start with a master service agreement template. Fill in the terms that will stay the same for every job: how and when you get paid, how long the client has to check the work, how to end the cooperation, insurance, and which state’s law applies. Leave the job details, deadlines, and price for each SOW. Then send the MSA to the other side, agree on any changes, and sign it.
What should be included in an MSA?
An MSA usually includes the parties’ names and addresses, the type of services, payment terms, how the work is checked and accepted, a statement that the contractor is not an employee, how to end the agreement, and which state’s law applies. You can also add a warranty, insurance, confidentiality, terms on covering each other’s losses, and extra costs the client pays back.
Can you have an SOW without an MSA?
Yes. For a one-time project, a separate SOW can work if it also includes the legal terms, like payment, liability, and how to end it. But if you plan to work with the same client again, an MSA saves you from writing those terms every time.
Are master service agreements legally binding?
Yes. Once both sides sign it, an MSA is a binding contract, and electronic signatures count too. Keep in mind that the MSA alone doesn’t make anyone do a specific job. The obligation to do the work and pay for it starts when both sides sign an SOW.
