J. Rohleder Law, PLLC
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3 Key Terms for Your Services Agreement


Head’s Up

Here’s what is covered in this post:

  • Three critical terms to include in your Master Services Agreement

  • Using these critical terms to ensure payment of your fees


Am I Covered?

More and more companies are outsourcing technology-related services. That’s good news for professional services firms. But let’s make sure you are managing your risk and getting paid for doing that good work.

Hopefully you are using business best practice and have a Master Services Agreement (“MSA”) in place with your clients. But simply having an agreement is not enough. Let’s make sure your agreement is giving you the protection you need. Every service agreement needs the following three critical terms:

1. Term or Duration

While it may seem obvious, knowing when a contract begins and ends is an essential term of a service agreement — and is often easily overlooked. You need to know when the contract will be effective. And make it explicit.

2. Payment Terms

You are not charity, and you don’t do your work for free. Let’s make sure that your MSA contains all the necessary details for you to get paid (preferably on time). The more detail that you include, the easier it will be for your client (or a judge!) to interpret the contract.

Include not only the amount of the payment owed, but also when the payment is owed. Specify which party is responsible for the costs incurred. You should also provide your standard invoicing process, and how long your client has to dispute an invoice. Other details you may want to include are any approvals or other steps that must be met prior to payment.

Pro tip: If your payment schedule becomes too unwieldy for the body of the contract, add it as an exhibit to the contract. That way you can be as detailed as necessary without burying key information in the middle of the contract.

The best payment dispute is the one that is avoided. Be clear about your process, and make sure you follow it!

3. Intellectual Property Rights

A contract involving professional services often results in some sort of work product that is being delivered to the client. The question then becomes, who owns that work product? Your client will likely demand ownership of all intellectual property developed during the course of services performed on their behalf.

Pro tip: Use intellectual property ownership to give yourself leverage on getting paid. Assigning IP ownership to the client should be conditioned on being fully paid for the work performed and invoiced.

Depending on the complexity of the intellectual property rights at issue, you may consider having an entirely separate agreement on just that subject. You can incorporate that separate agreement into your service agreement by including the IP agreement as an exhibit.

Be a Business Rock Star

Simply having a services agreement is a good start. But having the confidence that your agreement will protect and support you in case of a dispute is even better. You do good work, you deserve to get paid for it.

Schedule some time to have your standard service agreement reviewed. I am happy to help you - let’s get it done!