How to Review a Master Services Agreement (2026 Checklist)

A master services agreement (MSA) is the standing contract that governs an ongoing services relationship. Instead of renegotiating legal terms for every project, the parties agree them once in the MSA and then sign short statements of work (SOWs) for each piece of work. Reviewing an MSA is about risk allocation: who pays when something breaks, who owns what is created, what is promised, and how either side can leave. The clauses are familiar, but the numbers and carve-outs inside them are where the real negotiation lives. This is general guidance, not legal advice. ## The fast answer: what to check first Go straight to four clauses: limitation of liability (is there a cap, how big, and what sits outside it), indemnities (who indemnifies whom and for what), IP ownership (who owns deliverables and background IP), and termination (can you leave, on what notice, and what happens to work in progress). If these four are acceptable, the rest is usually manageable. ## Clause-by-clause review checklist ### Structure and order of precedence Confirm how the MSA, SOWs, order forms and any schedules fit together, and which document wins in a conflict. The usual rule is that the MSA governs unless a SOW expressly varies a named term. Ambiguity here causes expensive disputes. ### Services and standard of performance Look for the standard the services must meet: often "performed with reasonable skill and care" or "in a professional and workmanlike manner". Check whether any service levels or key performance indicators are promised, and where remedies for missing them live. ### Fees, payment and increases Check the payment terms, invoicing, late-payment interest, taxes and expenses. For multi-year deals, look at how and how often prices can rise (a fixed percentage, an index, or uncapped). Confirm whether you can dispute an invoice and withhold the disputed part only. ### Intellectual property Decide what is "foreground" IP (created under the contract) and "background" IP (owned before). Typical positions are assignment of deliverables to the customer with a licence back of the vendor's background IP, or a licence of the deliverables with the vendor keeping ownership. Make sure third-party and open-source components are flagged and properly licensed. ### Warranties Note the express warranties (authority, services standard, non-infringement, sometimes compliance with law) and how long they last. Check whether all other warranties are disclaimed, which is common, and whether that disclaimer is acceptable for your risk. ### Indemnities Read who indemnifies whom and for what. The most common is a vendor indemnity for third-party IP infringement, and often mutual indemnities for confidentiality or data breaches. Check the procedure (notice, control of defence, settlement consent) and whether indemnities are carved out of the liability cap. ### Limitation of liability This is the clause that decides exposure. Check the cap (a fixed sum, or a multiple of fees paid, and over what period), the exclusion of indirect and consequential loss, and the carve-outs that sit outside the cap (often death or personal injury, fraud, breach of confidentiality, IP indemnity, and sometimes data-protection breaches). A cap of "fees paid in the prior 12 months" is common; whether it is enough depends on the harm a failure could cause. ### Confidentiality Check the definition of confidential information, the permitted uses, the exclusions (public, independently developed, lawfully received), the duration, and the return or destruction obligation at the end. ### Data protection If personal data is processed, the MSA should attach or reference a data processing agreement with the required processor terms. Make sure it is present, current and consistent with the liability clause. ### Insurance Larger MSAs require the vendor to carry insurance (professional indemnity, cyber, public liability) at stated levels. Check the amounts are sensible for the work and that you can ask for evidence. ### Term, termination and exit Check the term, renewal, and the rights to terminate: for breach (with a cure period), for convenience (and on what notice), and on insolvency. Look for what happens on exit: transition assistance, return of data and materials, and which clauses survive termination. ### Boilerplate that still matters Assignment and change of control, subcontracting, force majeure, governing law and dispute resolution, notices, and anti-bribery and sanctions compliance. These are "standard" until the day one of them decides the outcome. ## Red flags to push back on An uncapped or one-sided liability clause. An IP clause that lets the vendor keep ownership of bespoke deliverables you paid for. Automatic price increases with no cap. Termination for convenience that only the vendor can use. A missing or stale data processing agreement. Indemnities with no procedure, so you lose control of a defence you are paying for. ## How the law changes by jurisdiction Contract law is national, so the same words do not behave the same everywhere. In common-law systems (India, the UK, Singapore, Australia, the US) courts lean on the written terms and read ambiguity against the drafter. Governing-law and jurisdiction clauses decide which country's rules apply and where disputes are heard; check they match where the parties and the assets actually are. In India, stamp duty and, for many instruments, registration are live concerns, and the Indian Contract Act 1872 governs formation. In the US, state law varies and the Uniform Commercial Code may apply where goods are involved. Across the EU and UK, data and consumer rules add mandatory terms you cannot contract out of. When in doubt, take local advice; this page is general information, not legal advice. ## A simple review workflow Read the four risk clauses first (liability, indemnity, IP, termination), then fees and warranties, then data protection and confidentiality, then boilerplate. Cross-check against any template SOW so the two do not conflict. Keep an issues list with clause reference, risk and proposed change, and mark which points are must-have versus nice-to-have before you negotiate. ## One workspace for drafting, review and tracking Everything above is work you can do by hand: read the draft, mark the risky positions, line up your redlines, remember the dates. The friction is rarely the reading. It is that the draft, the comments, the versions, the signed copy and the renewal date usually live in five different places. The simple idea behind an AI contract workspace is to keep that work together: draft from your own catalogue, see each clause flagged favourable, neutral or unfavourable to you, edit clauses in plain English and get a clean diff, keep a live activity timeline so every version is traceable, and track key dates and obligations so renewals and notices do not slip. Adira is one such workspace, built on Anthropic's Claude and tuned to how your company contracts. It is India-first today; deeper support for other jurisdictions and a single legal health pane (the Company Command Centre) are on the roadmap. None of that replaces legal advice on a specific deal. It just means the review you ran once does not have to be rebuilt from scratch next quarter.