Master Services Agreement in Japan: Template, Key Clauses and Local Law (2026)

A master services agreement (MSA) is the umbrella contract between a service provider and a customer in Japan, often called a basic transaction agreement (kihon torihiki keiyakusho). It carries the terms that apply across the whole relationship, while the detail of each project goes into a separate statement of work (SOW) or individual order. You negotiate the MSA once, then add orders as work comes up. This page is general information, not legal advice. Confirm the current position with a qualified Japanese lawyer (bengoshi) before you sign. ## Is a master services agreement enforceable under Japanese law? Yes. A services contract between businesses is governed mainly by the Civil Code (Minpo) and the Commercial Code (Shoho). The Civil Code's law of obligations was substantially reformed with effect from 1 April 2020, the first major rewrite since 1896; the reform updated rules on contract formation, non-performance, warranties against defects (now treated as non-conformity) and statutes of limitation, so older templates may use outdated concepts. Points that shape a Japanese MSA: - Two service models. Japanese law distinguishes a contract for work (ukeoi), where the provider owes a completed result, from a quasi-mandate (jun-inin), where the provider owes diligent effort but not a specific result. Which one applies changes liability for defects and the right to fees. Say clearly which model each service follows.

• Choice of law and forum. Under the Act on General Rules for Application of Laws, parties to an international contract may generally choose the governing law. For a purely domestic deal, Japanese law and Japanese courts or arbitration apply.
• The Subcontract Act. If a larger company outsources work to a smaller one, the Act against Delay in Payment of Subcontract Proceeds (the Subcontract Act, Shitauke Ho) can apply. It requires prompt written order terms, sets payment deadlines, and prohibits unfair acts such as unjustified price cuts. A significant amendment takes effect on 1 January 2026, including a ban on paying by promissory note. Where you deal with individual freelancers, the Freelance Act, in force since 1 November 2024, adds further protections.
• Language. Japanese-language contracts are common and are easier to enforce locally; bilingual contracts should name a controlling language.
• Tax. Japanese consumption tax (currently 10 percent) generally applies to services. ## Key clauses in a Japanese MSA - Framework and orders. State that the MSA governs and that each SOW or individual order is subject to it, with the order of precedence.
• Services and model. Define the services and whether each is a contract for work (ukeoi) or a quasi-mandate (jun-inin).
• Fees and payment. Amounts, consumption tax, invoicing and payment deadlines (mind the Subcontract Act limits where it applies).
• Term and termination. Duration, renewal, termination for cause and for convenience, and the effect on open orders.
• Intellectual property. Ownership of deliverables and background materials. Software and written works are protected under the Copyright Act, so assign or licence clearly, and address moral rights, which authors cannot assign in Japan.
• Confidentiality and data. Mutual confidentiality, and a data clause or DPA where personal data is processed under the APPI.
• Non-conformity and warranties. Remedies for deliverables that do not conform to the agreement, reflecting the reformed Civil Code.
• Limitation of liability. A cap and exclusion of indirect damages, subject to limits (you cannot exclude liability for wilful misconduct or gross negligence).
• Indemnities. For third party and IP claims.
• Governing law, dispute resolution and language. ## A simple MSA skeleton you can adapt 1. Parties and purpose

2. Definitions
3. Structure: MSA, SOWs or orders and precedence
4. Services and service model (ukeoi or jun-inin)
5. Fees, consumption tax and payment
6. Term and termination
7. Intellectual property and moral rights
8. Confidentiality and data protection
9. Non-conformity and warranties
10. Limitation of liability
11. Indemnities
12. Compliance (Subcontract Act, Freelance Act where relevant)
13. Force majeure
14. Governing law, dispute resolution and language
15. General provisions
16. SOW or order template as an annex ## Common mistakes in Japanese MSAs - Using pre-2020 concepts. The Civil Code reform changed how defects and non-performance work. Templates that still speak only of hidden defects (kashi tanpo) are out of date; use non-conformity.

• Not choosing the service model. Leaving ukeoi versus jun-inin unstated creates uncertainty over whether a result is owed and when fees are due.
• Ignoring the Subcontract Act. When it applies, late or vague order terms and unfair price cuts can breach it, with regulatory consequences; the 2026 amendment adds the promissory-note ban.
• Overlooking moral rights. Authors keep moral rights in Japan even after assigning economic rights; deal with a waiver or non-assertion where needed.
• Over-broad liability waivers. You cannot exclude liability for wilful misconduct or gross negligence.
• English only without a controlling-language clause. Agree which language governs. ## Keeping your contracts under control The work around an MSA is rarely the signing. It is issuing each order on consistent terms, watching renewal and termination dates, keeping versions straight across many projects, and making sure every document still reflects the reformed Civil Code and the subcontracting rules. When this runs in email and scattered folders, teams lose track of which order is live and which clause was last agreed. That is the work an AI contract workspace is built to hold in one place: draft from your approved MSA and order templates, see per-clause risk flagged against how your company contracts, edit clauses in plain language, and keep a live timeline of versions and obligations. Adira is one such workspace if you want to see the idea in practice. Its depth outside India is on the roadmap, so confirm Japan-specific review with local counsel. ## FAQ