Master Service Agreement Template: What To Include

If you do repeat work for the same clients, sending a brand new contract every time can slow everything down. A master service agreement, often called an MSA, gives you a reusable set of legal terms so each new project can start with a much shorter statement of work.

This is especially useful if you run a consultancy, agency, software business or other B2B service business in New Zealand. You can agree the main legal rules once, then use project documents to lock in the scope, timeline and fees for each job.

A good MSA doesn't have to be complicated. The key is making sure it matches how you actually work, get paid, create intellectual property and manage risk.

What Is A Master Service Agreement?

A master service agreement is a main contract that sets the rules for an ongoing commercial relationship. Instead of signing a full service agreement for every project, you sign one MSA and then add separate statements of work for each project or piece of work.

Think of the MSA as the legal foundation. It usually covers things like:

• how services are ordered and approved
• payment terms and late payment consequences
• who owns intellectual property
• confidentiality and privacy obligations
• warranties, disclaimers and liability limits
• how either party can end the relationship

The statement of work, often called an SOW, then deals with the project-specific details. That might include deliverables, milestones, fees, key dates, acceptance criteria and assumptions.

For example, if you run a digital agency, your MSA might stay the same for all projects. One SOW might cover a website build, another might cover monthly SEO support or managed services, and a third might cover a one-off brand strategy workshop.

This structure works well because it keeps your legal terms consistent while giving you flexibility. Without it, you can end up with a messy trail of emails, proposals and invoices that don't clearly say what was agreed.

Do You Still Need Statements Of Work?

Yes, you usually still need statements of work because an MSA doesn't normally describe each project in enough detail. The MSA gives you the standing terms, but the SOW tells everyone what is actually being done this time.

A strong SOW should be clear enough that your client can understand what they're getting and your team can deliver it without guessing. It should cover:

• scope: the services and deliverables included
• out of scope items: anything the client might assume is included, but isn't
• timeline: key dates, milestones and dependencies
• fees: fixed fees, hourly rates, retainers or milestone payments
• approval process: how drafts, revisions and final deliverables are accepted
• client responsibilities: information, access, feedback or approvals you need from them

Say Aroha runs a Wellington brand agency. Her MSA says extra work must be approved in writing and charged at $160 plus GST per hour. Her first SOW says the client will pay $18,000 plus GST for a website refresh, with 40% due upfront, 40% at design approval and 20% before launch.

If the client later asks for five extra landing pages, Aroha doesn't need to renegotiate the whole contract. She can issue a short variation or new SOW that says the extra pages are outside the original scope and will be charged at the agreed hourly rate. That makes it much easier to invoice properly and avoid awkward conversations.

What Clauses Should A New Zealand MSA Include?

A New Zealand MSA should include the clauses that control your commercial, legal and operational risks. A template can be a helpful starting point, but it needs to be tailored before you use it with real clients.

Here is a practical fill-in outline you can use when reviewing a master service agreement template. This isn't a finished legal document, and you should have a lawyer or experienced legal adviser tailor it to your business before signing.

1. Parties: write the legal names, NZBNs if relevant, company numbers and contact details for notices.
2. Background: describe the type of services your business provides, such as IT services or delivery services, and how SOWs will be used.
3. Term: state when the MSA starts and whether it continues until terminated or for a fixed period.
4. Statements Of Work: explain how SOWs are approved, varied and ranked if they conflict with the MSA.
5. Services And Standards: set the service standard you'll meet, any service levels and any assumptions you rely on.
6. Fees And Payment: include GST treatment, invoices, due dates, late payment, expenses and disputed invoices.
7. Client Obligations: list what the client must provide, such as access, content, approvals or data.
8. Intellectual Property: say what you own, what the client owns and when ownership transfers, if at all.
9. Confidentiality And Privacy: protect sensitive information and cover personal information where needed.
10. Liability And Indemnities: set sensible limits and carve-outs for higher-risk issues.
11. Termination: explain when either party can end the MSA or an SOW, and what happens to fees.
12. General Legal Terms: include governing law, notices, subcontracting, assignment and force majeure.

You should also make sure the contract identifies the correct legal entity. If your client trades under a brand name, check who is actually signing. For companies, the Companies Office register and NZBN details can help you confirm the legal name.

Who Owns The IP And Confidential Information?

It depends on what you create, what the client pays for and what your contract says. IP is one of the main reasons to use a properly drafted MSA, because assumptions about ownership can cause real problems later.

In New Zealand, copyright is generally protected under the Copyright Act 1994. Trade marks are registered through IPONZ. Your MSA should be clear about different types of intellectual property, rather than using one broad sentence that doesn't fit the way you work.

Background IP

Background IP is what you already owned before the project started. This might include your templates, frameworks, code libraries, design systems, training materials, processes or know-how.

Your MSA should usually say you keep owning your background IP. If the client needs to use it to receive the benefit of the services, you can give them a limited licence.

Project IP

Project IP is what you create for the client under an SOW. You might agree that ownership transfers to the client once they've paid all fees, or you might licence the deliverables instead.

For example, a software consultant might licence a reusable dashboard framework to the client but assign ownership of client-specific reports. A marketing agency might assign final approved campaign assets but keep ownership of unused concepts and internal strategy templates.

Confidential Information

Your confidentiality clause should protect both sides. It should cover information shared before and after signing, limit who can access it, and set out exceptions for information that's already public or must be disclosed by law.

If you handle personal information, you may also need Privacy Act 2020 terms. For example, your MSA might cover security measures, who can access personal information, how privacy breaches are handled and what happens to data when the project ends. Serious privacy breaches may need to be notified to the Privacy Commissioner and affected people.

What Should The Payment, Liability And Termination Clauses Say?

These clauses should say exactly how you get paid, what risks you accept and how the relationship can end. They're often the clauses you rely on when a project becomes difficult.

Payment

Your payment clause should match your cash flow. If you do substantial work upfront, consider deposits or milestone payments rather than waiting until the end.

You might include:

• whether fees are fixed, hourly, retainer-based or usage-based
• whether prices include or exclude GST
• invoice timing, such as monthly, upfront or on milestones
• a due date, such as 7, 14 or 30 days from invoice
• what happens if the client disputes part of an invoice
• whether you can pause work for unpaid invoices after giving notice

Without a clear payment clause, you may struggle to recover unpaid invoices or justify stopping work when the client is behind.

Liability

Your liability clause should set a sensible cap on your exposure. Common options include capping liability at the fees paid under the relevant SOW, the fees paid in the last 6 or 12 months, or a specific dollar amount. What is reasonable depends on the type of services, whether they include consultancy, maintenance services or clinical services, the contract value and the risk if something goes wrong.

You should be careful with exclusions and limitations. Under the Fair Trading Act 1986, unfair contract term rules can apply to standard form small trade contracts. You can also only contract out of certain Fair Trading Act and Consumer Guarantees Act 1993 protections in a B2B context if the requirements are met, including that it's fair and reasonable.

Termination

Your termination clause should cover both convenience and breach. For example, either party might be able to end the MSA on 30 days' written notice, while serious breaches might allow termination if they're not fixed within a set cure period, such as 10 business days.

Make sure the clause also says what happens to work in progress, unpaid fees, confidential information and client materials after termination.

Can You Use A Free MSA Template?

Yes, you can use a free MSA template as a starting point, but you shouldn't treat it as ready to sign. Templates often miss the parts that matter most for your pricing model, IP position, delivery process and risk appetite.

A free template can be useful for seeing the usual structure of a service agreement or business contract template. The risk is that it may be drafted for another country, another industry or a very different type of service.

For New Zealand businesses, watch out for templates that:

• refer to overseas laws, courts, regulators or tax concepts
• use Australian or US legal wording without adapting it for New Zealand
• give the client ownership of all IP, including your pre-existing materials
• let the client cancel at any time without paying for work already done
• include liability caps that are too high or too low for the contract value
• ignore Privacy Act 2020 obligations where personal information is involved
• don't deal with SOWs, variations or out of scope work clearly

There are usually three ways to get an MSA in place. A free template is the cheapest upfront, but you take on more risk and editing work. An online fixed-fee legal service can be more structured and cost-predictable, especially if you want a tailored contract and know the price before you start. A traditional firm billing by the hour may suit more complex arrangements, but the final cost can be harder to predict.

The right choice depends on the value of your contracts, the risk level of your services and how often you'll reuse the document. If the MSA will support major client relationships, it's worth getting it right before it becomes your standard contract.

Key Takeaways

• A master service agreement sets the standing legal terms for repeat client work, while each statement of work covers the project details.
• Your SOWs should clearly describe scope, fees, milestones, client responsibilities and what counts as out of scope.
• New Zealand MSAs should deal carefully with payment, IP ownership, confidentiality, privacy, liability and termination.
• Fair Trading Act, Consumer Guarantees Act and Privacy Act issues can affect how your contract should be drafted.
• Free templates can help with structure, but your MSA should be tailored to your services, pricing and risk profile before you use it.

If you'd like help with your master service agreement, statements of work, IP clauses or client payment terms, you can reach us at 0800 002 184 or team@sprintlaw.co.nz for a free, no-obligations chat.