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SOW against MSA: statement of work and master agreement
A master services agreement carries the legal terms that apply to every engagement between two parties: liability, confidentiality, insurance, termination and who owns the output. A statement of work carries one specific piece of work under it: what is being built, by when, for how much, and how it will be accepted.
The split exists so you negotiate the hard terms once and the next project is a two page document instead of a six week legal review.
Nuwan Madhusanka · Co-founder
3 min read · Published
| Master agreement | Statement of work | |
|---|---|---|
| Signed | Once, at the start of the relationship | Per project |
| Carries | Liability, confidentiality, IP, termination | Scope, deliverables, dates, price, acceptance |
| Length | Long, negotiated | Short, mostly written by the delivery team |
| Changes | Rarely, by formal amendment | Often, by change control |
| Without the other | Terms with nothing to apply to | A scope with no legal terms behind it |
Why the order of precedence matters
Both documents will eventually say something about the same subject, and the pair should state which wins. The usual arrangement is that the master agreement governs except where a statement of work expressly says otherwise for that project. Without that clause, a well meaning sentence in a statement of work can quietly override a negotiated liability cap, which is the sort of thing nobody discovers until it matters.
Acceptance is the clause that gets skipped
A statement of work should say who tests each deliverable, against what, within how many days, and what happens if they say nothing. That last part is the one people leave out, and it is the reason invoices sit behind untested deliverables for months. A deemed acceptance window, where silence after a stated period counts as acceptance, is standard and fair to both sides.
Assumptions protect the supplier
Every estimate rests on things the client controls: how many environments, whose data, which people are available and when. Writing those down as assumptions, specifically rather than vaguely, is what lets you reprice honestly when one turns out to be wrong. A statement of work with a page of generic assumptions protects nobody, because none of them can be shown to have failed.
Questions people ask
Can I send a statement of work without a master agreement?
You can, but the client is then agreeing to a scope with no legal terms behind it, and the first thing their lawyer will do is ask for the rest. If there is no master agreement, either put the terms into the statement of work or sign a service agreement first.
Which document holds the price?
The statement of work, because price belongs to the specific project. The master agreement may hold a rate card or a discount structure that applies across projects, but the number for this work belongs with the scope for this work.
How do I change a signed statement of work?
Through the change control clause, as a written variation signed by the same people, priced, with its effect on the dates stated. An email agreement to add a small thing is how projects end in dispute, because three months later everybody remembers the conversation differently.
Fixed price or time and materials?
Either, as long as the document says which and the client cannot mistake one for the other. The dangerous shape is a rate card sitting next to a total with no word saying whether the total is a cap. Time and materials suits work whose shape is known and volume is not; fixed price suits work you have done before.
Does the master agreement need renewing?
It should have a term and a renewal mechanism, and it is worth reviewing when insurance, liability caps or data protection obligations change. What you do not want is a five year old agreement governing new work under conditions neither party would agree to today.
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