Master service agreement template that every SOW inherits.
Most of a master service agreement is written for the day something goes wrong. The clauses an agency actually reaches for every month are the ones that price the third project, turn a large change into a new statement of work, and keep a project alive when the agreement around it ends.
A master service agreement template should hold every rule the next project with a client will need, so each statement of work only has to say what's being built, by when and for how much. The agreement below does that for an agency working with Larchmont Storage Partners, which runs eleven self-storage facilities in Georgia: one set of rates every project draws from, a line that decides when a change becomes a project of its own, a five-day window for accepting finished work, and a rule for projects still running when the relationship ends.
What should a master service agreement template include?
It should include every term that stays the same from one project to the next, written tightly enough that a new statement of work only has to add the work, the dates and the fee. That means a legal half, covering ownership, confidentiality, liability and how the agreement ends, and an operating half that says how a project starts, what an hour costs, how changes are handled and when finished work counts as accepted.
Published versions tend to write the legal half carefully and leave the operating half thin. Vendr's template runs to ten sections, from definitions through indemnification, and never says how a project starts under it or what a change costs. Business-in-a-Box also has ten clauses and puts a number on payment terms, but the document sits behind a sign-up and has nothing on change requests. Harvest's free version has five short parts, which makes it closer to a single project contract than to an agreement meant to sit above several, and Software Mind's article lists five areas an MSA covers and stops there.
In the version below, section 1.2 says a project starts only when named people on both sides have signed a statement of work, section 2 says what every one of those must state, and section 1.3 lets a statement of work override a named section for one project only, which is the precedence rule explained in the comparison of an MSA and a statement of work.
Client: Larchmont Storage Partners, eleven self-storage facilities in Georgia
Between [your agency] (the Agency) and Larchmont Storage Partners LLC (the Client)
Dated: ____________
1. HOW THIS AGREEMENT WORKS
1.1 This agreement sets the terms for every project the Agency does for the Client. It does not commit either side to any project by itself.
1.2 Each project is described in a statement of work (an SOW) in the form in schedule C, and it starts once the people named for each side in schedule B have signed and dated it.
1.3 Every SOW is issued under this agreement and takes on its terms. Where an SOW and this agreement disagree, this agreement controls, unless the SOW names the section of this agreement it replaces, and then only for that SOW.
2. WHAT EVERY SOW STATES
2.1 Every SOW states the work, what is excluded, the dates, the fee and whether it is fixed or hourly, the payment schedule, and the one person on the Client's side who approves work and changes under it.
2.2 An SOW that leaves out a fee or a date is a draft, and the Agency does not start work on it.
3. RATES
3.1 The rates in schedule A apply to every hourly SOW, to every change under section 4, and to any work done without an SOW.
3.2 The rates in schedule A stay fixed for twelve months from the date of this agreement. After that the Agency may raise them once in any twelve months, by no more than 5%, rounded to the nearest dollar, on 60 days' written notice.
3.3 A rise never applies to an SOW signed before the rise takes effect, or to changes made under that SOW.
4. CHANGES TO A SIGNED SOW
4.1 Either side may ask in writing for a change to a signed SOW.
4.2 Within three business days the Agency replies in writing with the hours by role, priced at the rates in schedule A, and any effect on the dates.
4.3 A change priced at no more than 10% of that SOW's fee, which moves its final date by no more than five business days, is a change order under that SOW.
4.4 Any larger change becomes a new SOW under this agreement, with its own dates, approver and payment schedule.
4.5 Work on a change starts once the approver named in that SOW has approved it in writing, and a change approved by anybody else is not approved.
4.6 Approved change orders are invoiced with the next payment due under that SOW.
5. ACCEPTING FINISHED WORK
5.1 When the Agency delivers a piece of work an SOW names, the approver has five business days to accept it or to say in writing where it falls short of that SOW.
5.2 The Agency fixes anything listed under 5.1 at no charge and delivers it again, and 5.1 then applies to the fixed version.
5.3 Work that is neither accepted nor questioned within those five business days counts as accepted on the sixth.
5.4 Anything raised under 5.1 that the SOW does not describe is a change under section 4.
6. FEES AND PAYMENT
6.1 The Agency invoices on each SOW's payment schedule, and invoices hourly work and approved changes monthly.
6.2 Invoices are payable within 21 days.
6.3 If an invoice is more than 30 days overdue, the Agency may pause work under every SOW after ten business days' written notice, and the dates in those SOWs move by the length of the pause.
6.4 Software licenses, fonts, hosting, stock images and other third-party costs are named in the SOW and paid by the Client at cost.
7. OWNERSHIP
7.1 Work made under an SOW becomes the Client's once that SOW has been paid in full.
7.2 Tools, code and methods the Agency had before the SOW, or builds for general use, stay the Agency's, and the Client may keep using them as part of the work it owns.
8. ENDING THIS AGREEMENT
8.1 Either side may end this agreement on 60 days' written notice.
8.2 An SOW signed before notice is given runs to completion on the terms of this agreement, even after this agreement ends, unless the Client cancels it under 8.3.
8.3 The Client may cancel any SOW on 15 business days' written notice, and pays for the work done up to the cancellation date at the rates in schedule A, up to that SOW's fee, plus any third-party costs already committed.
8.4 Within ten business days of an SOW ending, the Agency hands over the work that has been paid for under it.
9. CONFIDENTIALITY AND LIABILITY
9.1 Each side keeps the other's confidential information to itself, including customer data, pricing and unpublished plans, during this agreement and for three years after it.
9.2 Neither side is liable to the other for more than the fees paid under the SOW concerned in the twelve months before a claim, and neither is liable for the other's lost profit or lost business.
9.3 This agreement is governed by the law of the State of Georgia.
10. SIGNATURES
10.1 This agreement takes effect once both signatures below are dated.
For Larchmont Storage Partners LLC: ____________________ Date: __________
For [your agency]: ____________________ Date: __________
Schedule A, the rates: strategy and creative direction $185 per hour, design $150 per hour, development $165 per hour, project management $120 per hour
Schedule B, the people who sign SOWs for each side: ____________________
Schedule C, the SOW form: ____________________
Why put the rates in the master agreement instead of each SOW?
Because changes, hourly work and anything done without a statement of work all need a price, and the master agreement is the only document still in force for all of them. Section 3.2 holds Larchmont's four rates for twelve months, then allows one rise a year of no more than 5%, so the $165 development rate can reach $173 at most in year two. Section 3.3 keeps a rise out of projects already signed, so a December statement of work keeps $165 for every change under it even if January brings $172. Writing the rates into each statement of work works for a single project, as in a statement of work with the rate card filled in, but once a client is likely to come back they belong one level up.
When does a change become a new statement of work?
Under section 4, a change becomes a new statement of work once its price passes 10% of the project's fee or it moves the final date by more than five business days. Below that line it's a change order, priced from the rates and invoiced with the next payment.
Larchmont's first statement of work was a $52,400 website rebuild, twelve weeks from March 9, with a page for each facility and a search by unit size. In week nine the marketing director asked whether customers could reserve a unit online through the software the facilities already use for rentals. The agency priced it within three business days at 34 development hours ($5,610), six design hours ($900) and five hours of project management ($600), for $7,110. Ten percent of the rebuild was $5,240, so the reservation flow went out as its own statement of work, with its own dates and payments. Two weeks later Larchmont bought two more facilities, and their pages came to $1,365, which went through as a change order the marketing director approved the next morning, using a change request form that prices the hours by role.
Without section 4, both requests would have arrived as a question about whether they were part of the website, and the agency's choices would have been to argue or to absorb the hours. Together they come to $8,475, about 16% of the rebuild fee.
What happens when the client doesn't respond to finished work?
Under section 5 it counts as accepted on the sixth business day unless the approver has said where it falls short of the statement of work. The facility pages went over on Monday, April 13, so by Tuesday, April 21 they were accepted and the payment due on acceptance was invoiced. Anything listed inside the window gets fixed at no charge, so the client keeps the right to hold the agency to what was agreed, and 5.4 sends new requests dressed as defects back through the change process. Keeping each answer next to the work it settles is what makes an approval that holds up months later.
What happens to a project in progress when the agreement ends?
Under section 8.2 it runs to completion on the master agreement's terms, unless the client cancels that statement of work. A client that does want to stop a project gives 15 business days' notice and pays for the hours worked at the schedule A rates, never more than the project's fee. Had Larchmont canceled the reservation flow after 22 development hours, the bill would have been $3,630. Its second statement of work, a $3,600 monthly content and local search retainer, sits under the same rule, and what a monthly retainer covers and where it stops is worth settling inside that statement of work before the first month.
The second statement of work is what the master agreement is for
If you copy one clause into the agreement you already use, make it 4.3: "A change priced at no more than 10% of that SOW's fee, which moves its final date by no more than five business days, is a change order under that SOW." With 4.4 beside it, that line turned a $7,110 request into a few days of paperwork instead of an argument about what the website included. The first project under an MSA is usually fine, because everyone has just read it, and the second and third are the ones it exists to make easy. If a client will hire you once and never again, a single client contract is less paperwork for the same protection.
Frequently asked questions
What is a master service agreement template?
A master service agreement template is a reusable contract an agency signs once with a client to set the terms every later project shares: the rates, how changes are priced and approved, payment, ownership and how the relationship ends. Each project then runs on a short statement of work issued under it.
Is this master service agreement template free to use?
It is, and nothing here asks for an email address first. The buttons under the agreement copy the text or give you a Word file or a PDF. Swap in your own client, rates and state, and keep sections 3 to 5 close to the wording here.
What is the difference between an MSA and a statement of work?
The master service agreement holds the terms that stay the same across every project with a client, and the statement of work describes one project: the work, the exclusions, the dates, the fee and the payment schedule. Anything you'd write identically on your next three projects belongs in the master agreement.
How should a master service agreement handle changes to a project?
It should set one rule every statement of work inherits. The agreement above prices a requested change within three business days from the hourly rates, treats anything up to 10% of that project's fee as a change order, and turns anything larger into a new statement of work with its own dates and payments.
Can an agency raise its rates under a master service agreement?
Only if the agreement says how. The template above fixes the rates for twelve months, then allows one rise a year of no more than 5% on 60 days' written notice, and never applies a rise to a statement of work signed before it took effect.