Managed Service Agreement (MSA) Template
Undoubtedly, most of you are looking to make the switch from the traditional break/fix model of service to a more official Managed Service Agreement (MSA). It's a more sustainable agreement format than your standard break/fix model, and can provide you with more stable revenue growth when done correctly.
Whether you are starting from scratch, or looking to revise your current contracts, we are here to walk you through how to draft a thorough Managed Service Agreement. We will also direct you to some full-proof Managed Service Agreement templates.
How To Draft A Managed Service Agreement
There are various approaches to drafting a Managed Service Agreement. While we won’t go into detail for every section, we will delve into some of the more important sections and clauses to include.
Define Your Services
This is the overview section. It lays out each service your company can and is prepared to provide. You don’t get into the nitty-gritty of each service here. You lay them out in further detail in the rest of the contract.
Exclusions
This is also where you detail the services you are not capable of or not willing to provide.
Lay Out the Terms of Your Agreement
These are the basic parameters of the agreement including start date, duration, and the termination of the contract. This part of the contract should ideally include the following:
Coverage Hours/ Response Time
This details your daily working hours and the days of the week you are dispensable.
It will also specify out-of-hours rates, on-site visitations, and charges for additional projects over and above the scope of maintenance. You can also include this in the payment clause section that follows.
Payment Clause
You want to take your time with this section of the Managed Service Agreement. Include all kinds of scenarios in your payment scheme and use definitive language. This way, you won’t be underpaid for your services or have to enter into messy payment disputes.
Specify when payment is due and that it is due in the full amount unless otherwise stipulated or previously negotiated.
Specify the incurred charges on late payments, including interest rates and attorney fees. Also, be sure to indicate that all services rendered can be put on hold until you receive payment.
Have a section covering taxes here. Specify the terms of collection of taxes on services provided.
Termination Clause
You need to specify how and when a client should approach you regarding the termination of the contract. Define the length of notice and any settlement fees surrounding the termination of the contract.
Specify the same from your side. If you have a problem client that you cannot serve anymore, carefully mapping out this section will save you plenty of frustrations if you encounter such a scenario.
Minimum Standards
This section of the agreement lays out the minimum standards you expect and require from a client to provide your service. It might include standards regarding:
Operating systems
Applications
Patch and update levels
Equipment and hardware states
Covered Users and Equipment
Here you would stipulate who within a corporation is entitled to your services. You also want to list the equipment you might require from the company, and what items you are willing to contribute.
Consider all possible services and vendors that are required and cover them in this section.
Force Majeure
This is the section of the Managed Service Agreement where you specify any damages or losses that might occur that are not in your control. Take some time to carefully consider any foreseeable crisis that could impact your ability to work.
For example, pandemic guidelines are an excellent addition to the Force Majeure. Carefully define the response you would like your client to take in instances of crises so that you can maintain a stable working relationship and protect your business in unforeseen circumstances.
Liability and Confidentiality
Here you want to carefully define what level of liability you are willing to accept in the instance of something going wrong. Use concise, legal language here so that you cannot be caught out on a technicality.
You also want to include a confidentiality agreement between you and your client that will protect any sensitive information exchanged between you.
Remote Access Specifications
Remote access is convenient and often necessary. Be sure to carefully explain to your clients in the contract that remote work comes with security and cost considerations.
MSP Contract Template
Above are some of the more important additions and clauses you want to ensure are present in your draft.
Once you have drafted your Managed Service Agreement, be sure to visit the following checklist to ensure that you have included the following:
Scope of services including routine, maintenance, and exclusions
The terms of your agreement including service hours and response time
A payment clause including payment amount, scheduling and a section dedicated to late payments
A termination clause
Minimum standards
Users and equipment specifications
A liability clause
A confidentiality clause
A Force Majeure clause
To get a better idea of how to draft a Managed Service Agreement, here are some further resources:
In Conclusion
Drafting an MSP contract is one of the most important steps an MSP must undertake when taking on a new client. It is not something that you can rush. Take your time and be concise and clear in your wording.
Once you have a draft, you should seek out a legal specialist to proof the document and offer any changes you may need to make. At the end of the day, your MSA is a legally binding contract and should be treated as such.