Master Service Agreement
Table of Contents
A Master Service Agreement is a set of terms and conditions between a customer and a service provider. In the consumer world, these are commonly referred to as a contract or agreement. Essentially, a service agreement is a legally binding contract between two or more parties.
For example, when a customer purchases a product or services from a company, that company would provide the customer with a service agreement. In many cases, companies will provide both verbal and written instructions on how to use their products or services. In that case, the written instructions are part of the service agreement.
A service agreement is typically created when a customer purchases valuable goods or services from a business. The customer may need to read through the service agreement to understand its terms and conditions. A service agreement typically contains important information such as the name of the company, the date the agreement was signed and an acknowledgment that all terms are understood by both parties.
The customer must also acknowledge that they have read and understood the terms of the agreement before signing it. Once all parties have agreed to the terms, the customer then signs it and sends it to the business. After receiving the signed contract, the business will enter into this legally binding contract with its customers.
A common term found in any service agreement is payment disbursal policies. This usually outlines how payments should be made to businesses-
for example, by bank transfer or credit card payment. Some service agreements also outline how long payments should continue after a product or service has been provided- this is known as post-delivery support.
It is also common for agreements to specify how disputes should be handled between business partners and clients. If a business ever has to handle a dispute between two clients, it will make its customers look better in court by complying with their terms.
While some businesses make amendments to their master agreements annually, others do so quarterly or monthly. When updating an agreement, businesses can add new clauses or make amendments to existing ones- this is known as master amendment clauses.
For example, an airline may decide to increase its prices at specific times of year for business reasons- this would be an amendment applied to its Master Service Agreement pricing agreement. New customers can agree online to new terms when signing up for a valued service from that company. In these instances, customers are agreeing to amend their existing contracts with businesses at an agreed frequency.
A service agreement is an important document that helps define how two or more parties should interact with each other regarding goods or services. Depending on industry norms, some businesses treat annual amendments seriously while others treat monthly adjustments casually. Either way, businesses agree to amend their agreements so often that it affects their business practices anyway!