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A Beginner’s Guide To Understanding An MSP Contract

An MSP contract or Managed Service Provider contract is essentially an agreement between a service provider and their client that details the relationship between them, the rules and regulations governing their arrangement, and any established boundaries that can serve as a legal reminder for all their future dealings and disputes. The more a company grows, the more are the chances of them being at risk of legal proceedings and challenges from unhappy clients, and hence it is necessary that all companies maintain well-drafted contracts that cover their back.

While it isn’t advised that companies use the same by default contract for everyone, however, it isn’t possible to draw a new contract for every new client. Hence, it is recommended that a comprehensive draft be created under the supervision of a legal advisory team.

What areas does an MSP cover?

An MSP contract should cover the names of the service provider and the client in addition to their mutual level of service. It should also include clauses that define termination, liability, and any terms for excessive fees for any additional services provided by the provider which aren’t a part of the initial agreement. With respect to termination, your contract should include details for which party or parties can terminate the agreement and what would be the liable course of action in case of agreement termination.

An important part of any and every MSP agreement is the definition and description of all services that are provided by the vendor and their pricing. This would include prices of all services included and additional costs of providing excluded services; cost of services provided on-site and cost for those provided remotely; cost of services; cost of services provided during off-hours; and payment terms as to when is the client supposed to make payment and through which channel.

It should also include the limit for support and a minimum and maximum response time by the service provider. Other important details that ought to be included are payment conditions, start and end dates of the contract, and conditions for renewal.

What are the benefits of a well-written MSP contract?

There are multiple benefits associated with a well-written MSP contract which include the following:

1.Defines rules

A well-written MSP contract defines the rules and regulations that define the relationship between a service provider and their client. It essentially covers all clauses that are to be presented in your dealings with your clients currently and in the future.

2.Defines responsibilities

A well-written MSP contract establishes the roles and relationships between the service provider and client. In case of a dispute, both parties can fall back and refer to the agreement to gain clarity.

3.Defines processes

In order to maintain a good working relationship with your client, it is essential that your relationship be maintained in a smooth manner. A well-written MSP contract keeps all systems in place and hence ensures a smooth working relationship with your clients.

An MSP agreement is an important draft for all service providers and hence should be taken very seriously by all parties involved. Under no circumstance should managers take their MSP drafts lightly and draft the same with close consideration owing to the document’s sensitivity.


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