Agreement & Contract

LegalKart - Download the app for consumer App

Download LegalKart

  • Trusted
  • Affordable
  • Secure
Download Now!
What Are The Conditions to Expect In A Master Service Agreement?
Agreement & Contract

What Are The Conditions to Expect In A Master Service Agreement?

An MSA or master service agreement is an agreement between two parties wherein they agree and come to terms on the majority of points that will govern their future transactions and mutual actions. An MSA facilitates the two parties to negotiate future transactions and agreements more quickly and effectively.

This happens because the two companies take recourse to the strong foundations of the master agreement while carrying out their future transactions. So, they need not negotiate terms again and again.

The service of a master's is very common in the professional services industry. It makes you work with the service provider, project by project without re-checking the various rules and regulations about how you both should work together.

You may also read How to Draft a Service Agreement?

This way it serves the purpose of the onward momentum of the ongoing relationship, irrespective of the type of the project they are working on and so on.

Thus, MSA is an understanding between us and our clients on what we consider important and how we will carry out a healthy, moral and mutually gainful professional business relationship.

The Kind Of Terms & Conditions In An MSA Agreement

The legal department of every company has a somewhat different idea about what should or should not be contained in an MSA. But in case you’re going to hire a professional services team, there is a strong likelihood of some common ground and some terminology that you’ll need to understand.

Though the titles and ways of formatting are likely to differ from company to company, the MSA your company receives from any professional firm may contain the following sections:

  • There may be one section explaining what the Master Service general terms include or do not include in matters of project-specific agreements such as statements of work
  • Terms of Confidentiality
  • Rights to Intellectual Property
  • When, how, and how much the relationship can be discussed or disclosed
  • The conditions under which the work will be done;
  • How the client will review, reject, or approve deliverables
  • What each party will be responsible for providing or maintaining throughout the term of the services agreement
  • Consequences/implications of either party failing to comply with terms of the agreement
  • Agreement to refrain from soliciting each other’s employees or clients
  • Procedures for resolving legal disputes
  • Indemnification provisions in the event that either organization issued by a third party
  • Warranty or support information for work performed by the firm for the client
  • Insurance and/or security requirements for the service provider (and possibly the client)
  • Expectations about how the money, fees, expenses, and payments will be handled
  • Language relating to the MSA agreement’s term and how either party can terminate a specific statement of work, as well as how either party can terminate the MSA if necessary.

What Are The Expected Conditions In Master Service Agreement:

Let us divide the various sections to know in a better way of what to expect and why they are important:

You may like to read Know All About The Service Agreement

1. The More General Terms

To begin with, there should be a section that clearly mentions that the Master Services Agreement exists in addition to contracts for specific services.  It should also mention that you are hiring the firm for some time to enhance your performance.  

Every project provided by the service provider to the client, such as training, website development, software implementation, and so on, is shown negotiated in a statement of work (SOW), which is a project-specific addition to the Master Service Agreement.

These spell out the problems to be addressed for every individual project, what all the overall scope include and what it doesn’t, about the team involved, crucial dates &s milestones, the overall price, the billing deadlines, and so on.

2. The Mutual Confidentiality

The MSA should include a section that establishes confidentiality protection. This is important because we’re into the client data and working so closely with their leadership teams on the details of their various aspects like sales, marketing, and the future company growth strategy.

On the other hand, firms will be frequently training, consulting, and doing such things with clients in a manner that requires us to share unusual aspects of how we successfully operate.    

This is so because what the clients can understand from our unique experience is hugely valuable, thus we expect the protection of mutual confidentiality for what we share.

3. About Intellectual Property Rights

There is a section on intellectual property rights. This typically states who holds the rights to various processes and/or deliverables before, during, and after the work is completed.

This addresses who holds the authority over the deliverables/work and how the service provider shifts ownership rights upon acceptance. It also states who is the owner of the processes and/or tools used to create the deliverables. These are commonly known as a firm’s intellectual property (IP).

In one way, we’re like a “knowledge factory,” constantly shifting know-hows and digital assets to the client organisation through a range of collaborative projects.

4. About The Disclosure Of Relationship

If you’re thinking of working with a professional services firm, you may want them to share instances of familiar work which they’ve done for companies with same type of needs or goals like yours.

As an adjusted agreement, you may consider language requiring the service provider to obtain your written approval before some parts of your collaboration come up in public-facing material. Service providers may be willing to accept this compromise.

Also read Master Service Agreement: How Is It Important in IT Outsourcing?

5. How May The Work Be Performed    

It often happens in MSAs.  A section is included therein which spells out what each party will be responsible for throughout the time period of the relationship to complete the work successfully.  It is important to discuss these obligations beforehand so that everyone knows what they’re agreeing to.




Can A Share Purchase Agreement Be Rescinded?
Agreement & Contract

Can A Share Purchase Agreement Be Rescinded?

The world of business is characterized by the continuous buying and selling of shares. When someone buys a particular number of shares in a business, they ensure that there is no liability attached to their transaction. However, in some cases, liabilities may come up in the form of taxation after the transaction. This could become a significant drawback for the buyer.

The Meaning Of The Share Purchase Agreement

A share purchase agreement is signed between the buyer and seller. It is a legal agreement between the two parties which acts as approval of various sales & terms conditions that are mutually agreed upon by the two parties. As a matter of fact, the Share Purchase Agreement Companies Act of 2013 serves as the evidence for both the parties, the seller and the buyer, that the shares have been sold/bought legally.

You may like to read Know All About The Service Agreement

Share purchase agreement consists of various terms & conditions that are discussed between the buyer and seller when the deal was finalized. Most of the share purchase agreements have the following data presented:

  • Name of the company
  • Par value of shares
  • Name of purchaser
  • Document or any form of warranties provided by the seller and the purchaser
  • Employee benefits and bonuses
  • Number of shares being sold
  • Details of the transaction
  • Identification agreement for unforeseen costs

You may also read How to Draft a Service Agreement?

Is It Possible To Rescind a Share Purchase Agreement?

Well, a share purchase agreement establishes that the buyer and the seller are conducting this purchase of shares on mutual agreement and consent from both the parties.

Sometimes, it is possible that the seller may not give all the details to the buyer when the purchase is done. In that situation, the buyer stands liable. This won’t be entertained by the law principles. In such a scenario, the buyer can quickly rescind or annul a share purchase agreement.

In order to rescind a share purchase agreement, a person should be induced into a contract due to a wrong interpretation of another party. The buying side can rescind or annul a share purchase agreement or clean damage.

However, it has to be proved that the intention was to deceive.

When the shares are rescinded, they will be reverted to the seller who is obliged to repay the amount for those shares.

 There are some actions which may revoke the right to withdraw.

In case, the party which makes the false statement establishes the contract /behaviour in a way that is not consistent with the intent of the withdrawal (such as wrong misrepresentation)

Or in case the party cannot be restored to its original position. (Suppose: If the company signs a fresh contract or is re-organised)

A delay in withdrawing from the contract after the deception is discovered. This too can obstruct the right to withdraw.

Real-Life Example of Rescinding a Share Purchase Agreement.

In order to understand it better, let’s see a real-life example where the court supported rescinding the share price agreement

It so happened that Elson Precision Holdings Ltd (the buyer) initiated a share purchase agreement with Hampson Industries plc (the seller) wherein it agreed to buy a share of the Seller (the target).

This sale was negotiated by the financial director of the seller and the interim (temporary) managing director of target and, as part of its due process, income and customer predictions were provided to the buyer.

The forecasts consisted of the growth in demand, which came from a major customer of the target who represented between 34% and 40% of the target’s annual turnover.

The process of selling began in the summer of 2009 with the provision of an information memorandum and, during the passage of time, added information (including customer forecasts) were provided to the buyer.

In April 2010, soon after the two parties decided on the final terms for the sale of the target, the primary customer told the CEO of the seller that they are thinking to terminate their supply arrangement with the seller.

This was not told to the people who were negotiating the sale, who continued to provide the buyer with predictions and various other information reflecting an under-the-process relationship with the customer.

An official notice informing the termination of the vendor agreement was given by the seller only on 22 June 2010.

The sale got completed on 23 June after which the negotiating team learned of the customer’s official termination and promptly told the buyer. 

When the share purchase document had been drafted, it did not include any forms of warranties, establishing that the forecast given to the customer was true. The forecast statements and all the other documents were not considered as a breach of warranty.

Also, the agreement consisted of an entire agreement clause based on actions that favour innocent or negligent misrepresentation.

Also read Master Service Agreement: How Is It Important in IT Outsourcing?

The Judgement Of The Court

This issue was referred to the court and the judge ruled that, while the CEO had not himself given the wrong predictions to the buyer or instructed anyone else to make the buyer carry on. As per the principles of law, the CEO totally knew forecast which was provided to the buyer and also the reality that it was wrong and embedded with untrue information.

Despite that, he kept quiet about the discontinuation even though he knew the buyer would reply to the erroneous forecasts.


Master Service Agreement: How Is It Important in IT Outsourcing?
Agreement & Contract

Master Service Agreement: How Is It Important in IT Outsourcing?

Well, Master Service Agreement is very useful. It can also help a lot the companies which are into software development. Well, these companies when they use MSA, can accelerate their work by making easy the general contract rules for ongoing projects. At the same time, they do hold the power to make decisions.  

Say for instance that you’ve come across a good IT outsourcing firm or company. Besides, you own a complicated product that will have to through various phases of development. And your companies are required to work together for a long time. Perhaps, you have worked with this developer on a project which went quite well and you’re quite excited about working with them again.

Also, read Know All About The Service Agreement

With the help of MSA, the rules will become easier to understand for both parties and that too well in advance, so there is little confusion if any. It may also cut down the legal costs and the time & money that it takes to write new documentation.

Master Service Agreement: What It Is?

As per the definition, an MSA is a contract between an IT vendor and a customer that lays out the following: project expectations, responsibilities, roles, provided services, terms, and other important agreements.

The Uses Of MSA

MSA is put to use when a company and a software vendor decide to work together on a project for a considerably good period of time.

It also helps in cutting costs and prevents a lot of stress for all who are involved by lessening the need to renegotiate and re-read much of the already decided conditions again.

Writing the MSA in software development requires a lot of time and it involves a lot of work. However, once both sides agree on it, it can be utilized as a model for future projects.

You may like to read How to Draft a Service Agreement?

Master Service Agreement - Who Provides It?

MSA is mostly created by an outsourcing company. Thereafter, it is forwarded to the client for review. It’s quite likely for software companies to cover the small points in the arenas of how a project is done.

Additionally, an outsourcing company can create and put up a Master Service Agreement with various important documents as a part of the package.

What Are The Contents of MSA?

A good MSA should include all the important and minute details so that all the business expectations are communicated properly and financial guarantees are provided to both parties.

Here we are showing how it works: It should be simple and easy for project managers to understand so they can manage the project well. Thus, the MSA document is usually split into the certain sections, shown as below:

There are three major ways to get paid when you write software:

Method: Fixed price. This may be the best way to work on projects which have detailed plans that are required to be done by a certain date. In this, usually the payment is made when a project is completed, a task is completed, or a phase is completed. It can also be paid once the product is used

The two things that really do make things happen are: Time and materials are (T&M). Well, the products which are flexible that don’t have a specific use are good for this. In this model, the employer makes the payment for materials and for the number of hours which the Engineers work.

A model for a devoted team. This type of payment is for the people who can effectively manage the core development team. Herein,  customer pays in every month, based on the developer’s hourly work on the project.

MSA also tells about how to take the service, the reasons as to why people don’t like it, and how to change and revise it. Other things that go in this section are: the costs of unplanned expenses, how they can be paid and how to transfer money.

Providers of Service

After the parties’ names, their official contact person information, and their legal (official) addresses, comes the most important part of the document: general conditions, which are very important.

The MSA Document must include the following things in the Provision of Services:

There are four main goals and objectives for all of your projects

  • The client’s expectations
  • Services are provided for each SOW
  • Clauses, fees, and processes that go along with order changes or SOW changes.

Performance Management Should Be Tracked

Every project should have an independent SOW. It should lay out how the two sides will act in operating processes and in which way will the project will be monitored.

In fact, the MSA can tell about the complete structure of software development. Some companies even add a Management Guide attachment that explains about the function of every person in the office.

Term and Clauses for Ending

The Master Service Agreement spells out how long should the developer and client work together. The MSA Document also tells when a contract can be terminated pre-maturedly.

On the other hand, there can be an automatic renewal process if both sides concur on it.

Intellectual Property: Its Rights And Ownership

This tells us about the results of work on projects under individual SOWs that fall under intellectual property. We also come to know who owns the copyrights and various other rights that come along with the project deliverables.

Besides, the paper should also tell us which software, inventions, technology and data were made before or during collaboration belonging to the software company.

Also, read What Are The Conditions to Expect In A Master Service Agreement?

Download Legalkart app now

Get 5 mins of talk time Free !
LegalKart Apps

LegalKart- Your Legal Advisor App is for general users who need to avail services like consulting a Lawyer on phone, document drafting, getting property verified by lawyers.