Expert Update: Signing a Master Service Agreement

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In the energy sector, the steel-toed boots of a sub-contractor can’t set foot on a jobsite without signing a Master Service Agreement (MSA). What are these exactly?

A MSA is when two parties agree to a contract that will settle most details and expectations for both parties for future agreements.  The idea is that a MSA enables parties to quickly negotiate future transactions or agreements, because they can rely on the terms of the master agreement, so that the same terms need not be repetitively negotiated, and to negotiate only the deal-specific terms.

Hopefully, most of the terms of a MSA are common sense and beneficial to mitigating risk for all parties. This is not always the case.  And in today’s reality, a subcontractor is agreeing to the terms of the operator or contractor awarding the work without any negotiation.

In addition to the lawyer you’ll need to decipher the indemnity sections, a competent insurance agent is important to provide an insurance certificate to satisfy the requirements of the insurance section.  At the very least, you’ll want to request a variance for the terms that may not make sense to your particular situation.

Please contact me for a comprehensive review of your potential liabilities in relation to the contractual requirements of your next MSA.

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Please note that the information contained in this posting is designed to provide authoritative and accurate information, in regard to the subject matter covered. However, it is not provided as legal or tax advice and no representation is made as to the sufficiency for your specific company’s needs. This post should be reviewed by your legal counsel or tax consultant before use.