Understanding Basic Contracts: The (Ir)Relevant Title
By Kevin Vela
A client reached out yesterday to ask what the difference was between an independent contractor agreement and a master services agreement. He had two sitting in his inbox – different titles, though they were for the same project. At their core, they are the same thing: a services agreement.
In fact, there really isn’t much difference between (1) an independent contractor agreement, (2) a marketing services agreement, (3) a master services agreement (an “MSA”), and (4) a development services agreement (or other similarly named agreements). All of them cover the provision of services by a person or company for a client.
The key provisions in any sort of services agreement should cover:
- What is being done?
- When & how is it delivered?
- How much will it cost?
- When are payments made?
- Who owns the deliverables?
- What happens if something isn’t delivered on time, or paid for on time?
Each of these questions/sections will be covered in any of the four agreements listed above (along with other provisions like standard miscellaneous provisions, indemnification, and insurance).
Now, I wouldn’t say that the agreements are interchangeable. For instance, a Marketing Services Agreement would usually contain language around marketing programs, advertising budgets, revenue shares, etc.; whereas a Development Services Agreement would contain much more language around development of intellectual property. Moreover, Master Services Agreements are usually intended for longer term projects whereby the MSA will govern the relationship generally, and a “Statement of Work” (aka “Scope of Work” or “SOW”) will be used for each project under the MSA.
In closing, a services agreement can have a number of different names. It’s useful for a contract to be titled correctly, but it’s critical that it contain the applicable provisions. Hopefully this blog, and the rest in the series, will help you understand basic contracts. As always, please review your agreements with your attorney before signing anything.