Master Service Agreement vs Statement of Work
Last updated: February 2025
Quick Comparison
| Aspect | Master Service Agreement (MSA) | Statement of Work (SOW) |
|---|---|---|
| Scope | General terms for the entire relationship | Specific terms for one project |
| Duration | Ongoing; covers multiple projects | Project-specific; has a defined timeline |
| Content | Legal and commercial framework | Deliverables, milestones, and project-specific pricing |
| Negotiation | Negotiated once at the start of the relationship | Agreed for each new project, typically faster |
| Hierarchy | Overarching document; takes precedence unless SOW states otherwise | Subordinate to the MSA |
What Is a Master Service Agreement (MSA)?
An overarching contract that establishes the general legal and commercial terms governing all future work between two parties.
Key Features
- • Sets out standard terms for the entire relationship
- • Covers liability, IP, confidentiality, termination, and dispute resolution
- • Individual projects are documented in separate SOWs
- • Negotiated once and applies to all engagements
Best For
- • Long-term client relationships with multiple projects
- • Reducing negotiation time for each new engagement
- • Ensuring consistency across all work with a client
What Is a Statement of Work (SOW)?
A document that defines the specific scope, deliverables, timeline, and pricing for an individual project under the terms of an MSA.
Key Features
- • Specific to a single project or phase
- • Defines deliverables, milestones, and acceptance criteria
- • Pricing and payment terms for the specific project
- • Governed by the overarching MSA
Best For
- • Documenting individual projects within an ongoing relationship
- • Varying scope and pricing between engagements
- • Allowing quick project kick-off without renegotiating terms
When to Use a Master Service Agreement (MSA)
Use an MSA when you expect an ongoing relationship with multiple projects. It saves time and legal costs by establishing standard terms once, so each new project only requires a SOW.
When to Use a Statement of Work (SOW)
Use a SOW for each individual project or engagement under your MSA. It should focus on what is being delivered, when, and for how much, leaving the legal terms to the MSA.
Which Does Your Business Need?
You typically need both. The MSA provides the legal framework, and SOWs define each project's specifics. For a one-off engagement, a single service agreement combining both elements may be more practical.
FAQ
What happens if the SOW conflicts with the MSA?
The MSA should include a precedence clause stating which document prevails in case of conflict. Typically the MSA takes precedence, but parties sometimes agree that the SOW prevails for project-specific matters. Clarity on this point is essential.
Can a SOW exist without an MSA?
Yes, but it must then contain all necessary legal terms to be a standalone contract. In practice, a SOW without an MSA is essentially a project contract and should include liability, IP, confidentiality, and termination provisions.
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Get Started FreeThis is guidance for UK businesses, not legal advice. Consult a solicitor for complex matters.
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