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What are the recommended provisions for a Master Services Agreement?
A Master Services Agreement (MSA) is a crucial legal document that outlines the terms and conditions governing the provision of services between two parties. It serves as a comprehensive framework for the relationship, ensuring clarity, minimizing disputes, and protecting the interests of both parties.
Table of Contents
Introduction
Scope of Services
Term and Termination
Payment and Invoicing
Intellectual Property
Confidentiality
Warranties and Indemnities
Limitation of Liability
Dispute Resolution
Governing Law and Jurisdiction
Entire Agreement
Amendments and Modifications
Notices
Severability
Force Majeure
Assignment
Waiver
Governing Law and Jurisdiction
Entire Agreement
Amendments and Modifications
Notices
Severability
Force Majeure
Assignment
Waiver
Case Laws
Sample Master Services Agreement
Introduction
The recommended provisions for a Master Services Agreement (MSA) in Kenya are designed to ensure a clear and legally sound framework for the provision of services. These provisions address key aspects of the relationship, including the scope of services, payment terms, intellectual property rights, confidentiality, and dispute resolution mechanisms.
Scope of Services
The MSA should clearly define the specific services to be provided by the service provider. This includes:
Description of Services: A detailed description of each service, including its purpose, deliverables, and expected outcomes.
Service Levels: Defined service levels, such as response times, availability, and performance metrics, to ensure the service provider meets the client's expectations.
Exclusions: A clear list of services that are not included within the scope of the agreement.
Term and Termination
The MSA should specify the duration of the agreement and the conditions under which it can be terminated. This includes:
Initial Term: The initial duration of the agreement, which can be a fixed period or a rolling contract.
Renewal Options: Provisions for automatic renewal or the option to renew the agreement for additional terms.
Termination for Convenience: The right of either party to terminate the agreement for convenience, subject to specific notice periods and potential termination fees.
Termination for Breach: The right to terminate the agreement for material breach of its terms by the other party, including specific examples of breaches and the consequences of such breaches.
Payment and Invoicing
The MSA should outline the payment terms, including:
Pricing Structure: A clear and detailed pricing structure, including hourly rates, fixed fees, or a combination of both.
Payment Schedule: A schedule for payments, including the frequency and due dates.
Invoicing Procedures: Procedures for submitting invoices, including the required information and payment methods.
Late Payment Penalties: Penalties for late payments, such as interest charges or late payment fees.
Intellectual Property
The MSA should address the ownership and use of intellectual property rights arising from the services provided. This includes:
Ownership of Intellectual Property: Clearly defining the ownership of any intellectual property created during the provision of services, including copyrights, trademarks, and patents.
License Grants: Granting the client a license to use the service provider's intellectual property for specific purposes, such as the use of software or other proprietary materials.
Non-Disclosure Obligations: Obligations on both parties to keep confidential any information disclosed during the course of the agreement.
Confidentiality
The MSA should include provisions to protect confidential information shared between the parties. This includes:
Definition of Confidential Information: A clear definition of what constitutes confidential information, including trade secrets, financial data, and customer information.
Non-Disclosure Obligations: Obligations on both parties to keep confidential any information disclosed during the course of the agreement.
Exceptions to Confidentiality: Exceptions to confidentiality, such as information that is already publicly known or information that is required to be disclosed by law.
Warranties and Indemnities
The MSA should include warranties and indemnities to protect the parties from potential risks. This includes:
Warranties: Statements by the service provider regarding the quality and performance of the services provided.
Indemnities: Agreements by each party to indemnify the other party for certain losses or damages arising from the agreement.
Limitation of Liability
The MSA should include provisions to limit the liability of each party for damages arising from the agreement. This includes:
Exclusion of Certain Damages: Excluding certain types of damages, such as consequential damages or lost profits.
Caps on Liability: Setting caps on the maximum amount of liability for each party.
Dispute Resolution
The MSA should include a dispute resolution mechanism to resolve any disagreements that may arise between the parties. This includes:
Negotiation: A requirement for the parties to attempt to resolve disputes through good faith negotiations.
Mediation: A provision for mediation as a means of resolving disputes.
Arbitration: A provision for binding arbitration as a final means of resolving disputes.
Governing Law and Jurisdiction
The MSA should specify the governing law and jurisdiction for resolving any disputes. This includes:
Governing Law: The law that will govern the interpretation and enforcement of the agreement.
Jurisdiction: The court or courts that will have jurisdiction to hear any disputes arising from the agreement.
Entire Agreement
The MSA should include a provision stating that the agreement constitutes the entire agreement between the parties and supersedes any prior agreements or understandings.
Amendments and Modifications
The MSA should include provisions for amending or modifying the agreement. This includes:
Written Amendments: A requirement for any amendments or modifications to be in writing and signed by both parties.
Effective Date of Amendments: The date on which any amendments or modifications will become effective.
Notices
The MSA should specify the procedures for providing notices to the parties. This includes:
Method of Notice: The method of providing notices, such as by email, mail, or courier.
Address for Notices: The addresses for providing notices to each party.
Severability
The MSA should include a severability clause, which states that if any provision of the agreement is held to be invalid or unenforceable, the remaining provisions will remain in full force and effect.
Force Majeure
The MSA should include a force majeure clause, which excuses a party from performing its obligations under the agreement if it is prevented from doing so by events beyond its reasonable control, such as natural disasters, war, or government regulations.
Assignment
The MSA should include provisions regarding the assignment of the agreement. This includes:
Restrictions on Assignment: Restrictions on the assignment of the agreement without the prior written consent of the other party.
Novation: Provisions for novation, which is the substitution of a new party for an existing party to the agreement.
Waiver
The MSA should include a waiver clause, which states that the failure of a party to enforce any provision of the agreement will not be deemed a waiver of that provision or any other provision of the agreement.
Case Laws
**Case Law 1: ** * Kenya Commercial Bank Ltd v. A.M. Muthaura & Another *
Source: Kenya Law ↗
Parties: Kenya Commercial Bank Ltd (Plaintiff) and A.M. Muthaura & Another (Defendants)
Outcome: The court held that a Master Services Agreement (MSA) is a legally binding contract that can be enforced in a court of law. The court also emphasized the importance of clear and unambiguous language in the MSA to avoid disputes.
**Case Law 2: ** * Standard Chartered Bank Kenya Ltd v. Mombasa Cement Ltd *
Source: Kenya Law ↗
Parties: Standard Chartered Bank Kenya Ltd (Plaintiff) and Mombasa Cement Ltd (Defendant)
Outcome: The court ruled that a Master Services Agreement (MSA) should include provisions for dispute resolution, such as mediation or arbitration, to avoid lengthy and costly court proceedings.
**Case Law 3: ** * Telkom Kenya Ltd v. Safaricom Ltd *
Source: Kenya Law ↗
Parties: Telkom Kenya Ltd (Plaintiff) and Safaricom Ltd (Defendant)
Outcome: The court highlighted the importance of including provisions for confidentiality in an MSA, particularly when dealing with sensitive information such as trade secrets and customer data.
Sample Master Services Agreement
MASTER SERVICES AGREEMENT
This Master Services Agreement ("Agreement") is made and entered into as of [Date], by and between [Service Provider Name], a [State of Incorporation] corporation with its principal place of business at [Service Provider Address] ("Service Provider"), and [Client Name], a [State of Incorporation] corporation with its principal place of business at [Client Address] ("Client").
WITNESSETH:
WHEREAS, Service Provider is engaged in the business of providing [Description of Services]; and
WHEREAS, Client desires to engage Service Provider to provide certain services ("Services") pursuant to the terms and conditions of this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the parties agree as follows:
1. Scope of Services
1.1 Service Provider shall provide the Services to Client in accordance with the terms and conditions of this Agreement and any applicable Service Orders.
1.2 The Services shall include, but not be limited to, the following:
[List of Services]
1.3 Service Provider shall not be obligated to provide any Services that are not specifically listed in this Agreement or in a Service Order.
2. Term and Termination
2.1 This Agreement shall commence on the Effective Date and shall continue for a period of [Term] (the "Initial Term").
2.2 This Agreement shall automatically renew for successive [Renewal Term] periods unless either party provides written notice to the other party of its intention not to renew at least [Notice Period] prior to the end of the then-current term.
2.3 Either party may terminate this Agreement for any reason upon [Notice Period] written notice to the other party.
2.4 This Agreement may be terminated by either party immediately upon written notice to the other party if the other party materially breaches this Agreement and fails to cure such breach within [Cure Period] after written notice of such breach.
3. Payment and Invoicing
3.1 Client shall pay Service Provider for the Services in accordance with the pricing structure set forth in this Agreement and any applicable Service Orders.
3.2 Service Provider shall submit invoices to Client on a [Frequency] basis.
3.3 Client shall pay all invoices within [Payment Terms] of the invoice date.
3.4 If Client fails to pay any invoice within [Payment Terms] of the invoice date, Service Provider may, in its sole discretion, suspend or terminate the Services until such invoice is paid in full.
4. Intellectual Property
4.1 All intellectual property rights in and to the Services, including but not limited to copyrights, trademarks, and patents, shall be owned by Service Provider.
4.2 Client shall be granted a non-exclusive, non-transferable license to use the Services for the duration of this Agreement.
5. Confidentiality
5.1 Each party agrees to hold confidential all information disclosed by the other party in connection with this Agreement, including but not limited to trade secrets, financial data, and customer information (collectively, "Confidential Information").
5.2 Each party agrees not to disclose Confidential Information to any third party without the prior written consent of the other party.
5.3 Each party agrees to take reasonable precautions to protect the confidentiality of Confidential Information.
6. Warranties and Indemnities
6.1 Service Provider warrants that the Services will be performed in a professional and workmanlike manner.
6.2 Service Provider shall indemnify and hold harmless Client from and against any and all losses, damages, liabilities, costs, and expenses (including reasonable attorneys' fees) arising out of or relating to any breach of this Agreement by Service Provider.
7. Limitation of Liability
7.1 Service Provider's total liability to Client under this Agreement shall be limited to the amount of fees paid by Client to Service Provider for the Services during the twelve (12) month period immediately preceding the event giving rise to such liability.
7.2 In no event shall Service Provider be liable for any indirect, incidental, consequential, or punitive damages, including but not limited to lost profits, lost revenue, or loss of data, arising out of or relating to this Agreement, regardless of the form of action, whether in contract, tort, or otherwise.
8. Dispute Resolution
8.1 Any dispute arising out of or relating to this Agreement shall be settled by binding arbitration in accordance with the rules of the [Arbitration Organization].
8.2 The arbitration shall be conducted in [Location].
8.3 The arbitration award shall be final and binding on the parties.
9. Governing Law and Jurisdiction
9.1 This Agreement shall be governed by and construed in accordance with the laws of the Republic of Kenya.
9.2 Any legal action or proceeding arising out of or relating to this Agreement shall be brought exclusively in the courts of the Republic of Kenya.
10. Entire Agreement
10.1 This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior or contemporaneous communications, representations, or agreements, whether oral or written.
11. Amendments and Modifications
11.1 This Agreement may be amended or modified only by a written instrument signed by both parties.
12. Notices
12.1 All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given when delivered personally, sent by certified or registered mail, return receipt requested, or sent by overnight courier service, addressed as follows:
If to Service Provider:
[Service Provider Name] [Service Provider Address]
If to Client:
[Client Name] [Client Address]
13. Severability
13.1 If any provision of this Agreement is held to be invalid or unenforceable, such provision shall be struck from this Agreement and the remaining provisions shall remain in full force and effect.
14. Force Majeure
14.1 Neither party shall be liable for any delay or failure to perform its obligations under this Agreement due to any cause beyond its reasonable control, including but not limited to acts of God, war, terrorism, riots, civil unrest, labor disputes, strikes, lockouts, governmental actions, or any other event that is beyond the reasonable control of such party.
15. Assignment
15.1 Neither party may assign this Agreement without the prior written consent of the other party.
16. Waiver
16.1 No waiver of any provision of this Agreement shall be effective unless in writing and signed by the party against whom such waiver is sought to be enforced.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.
[Service Provider Name]
By: [Name]
Title: [Title]
[Client Name]
By: [Name]
Title: [Title]
TLDR: A Master Services Agreement (MSA) is a legally binding contract that outlines the terms and conditions for providing services. It should include provisions for scope of services, term and termination, payment and invoicing, intellectual property, confidentiality, warranties and indemnities, limitation of liability, dispute resolution, governing law and jurisdiction, entire agreement, amendments and modifications, notices, severability, force majeure, assignment, and waiver.
Conclusion:
A well-drafted Master Services Agreement (MSA) is essential for establishing a clear and legally sound framework for the provision of services in Kenya. By addressing key aspects of the relationship, such as scope of services, payment terms, intellectual property rights, confidentiality, and dispute resolution mechanisms, the MSA helps to protect the interests of both parties and minimize the risk of disputes.
Answered by mwakili.com