Check a service agreement online — AI MSA review
Master services agreements are usually drafted by the buyer's procurement team and stack the deck against the provider. Green Flagged scans every clause against an MSA checklist and tells you in plain English where the leverage actually sits.
8 red flags we look for in service agreements
Most-favored-customer clause
Commits you to never give a better price to anyone else. Hard to comply with, easy to breach.
Time-and-materials with no cap
Fine for the provider, terrible for the buyer. Always include a not-to-exceed (NTE) cap with re-baselining triggers.
Acceptance criteria that are subjective
If acceptance depends on "buyer's reasonable satisfaction" without objective criteria, payment becomes optional.
Unilateral right to extend SOW
Lets the buyer pull on extra work at the SOW rate, indefinitely. Cap with a re-quote requirement.
Service credits as exclusive remedy
Common in vendor templates; favors the provider. Add termination right at credit threshold.
Non-solicit of provider's people
Reasonable when narrow (parties' employees, 12 months); unreasonable when applied to anyone the buyer interacted with.
Audit rights with no scope limit
Mutual audit rights are fine; one-sided, broadly worded audit rights are a compliance hammer.
Vague change-order procedure
If changes can be made by email without amendment, scope creep is the default.
What to read in this service agreement
Statement of Work hierarchy
Defines which document controls when SOW and MSA conflict. Usually SOW controls for project-specific terms.
Fees, expenses, and payment
Net 30 is typical. Late-payment interest. Invoicing cadence and approval process.
Acceptance and warranties
Objective acceptance criteria, deemed-acceptance period, warranty duration with explicit remedies.
Change orders
Written, signed, with cost and schedule impact. No work proceeds until signed.
IP ownership
Work product transfer on full payment; provider retains pre-existing IP and tools.
Limitation of liability
Mutual cap (typically 12 months fees), carve-outs for IP indemnity, confidentiality breach, gross negligence.
Frequently asked about service agreement
When is an MSA worth signing vs project-by-project?
When you expect more than 2-3 projects with the same counterparty. The MSA front-loads negotiation so each SOW is short and easy.
Should the MSA or the SOW control?
Generally: SOW controls for project-specific terms (scope, fees, timeline); MSA controls for legal terms (IP, liability, confidentiality). State the hierarchy explicitly.
What's a reasonable change-order process?
Written, signed, with stated cost and schedule impact. Work doesn't start until the change order is signed. Email approvals create disputes.
How do I avoid scope creep?
Specific deliverables, specific acceptance criteria, specific revision rounds. "As needed" and "ongoing support" are the two phrases that create endless work for the same fee.
Should I worry about a most-favored-customer clause?
Yes. They sound reasonable but in practice are unmonitorable and impose real risk. Negotiate them out, or limit them to a defined product/territory window.
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