00:10
Adam Stofsky
So, David, MSAs are very common in the technology and software as a service sector especially. Can you talk a bit in detail about how they tend to work both for people who are selling software and buying it?
00:24
David Tollen
Yeah, so this is a lot of my work is on technology, almost all my work on technology contracts and MSAs common there. So normally in the tech field, you'd use an MSA when the main thing that you're providing is again, services. And I don't mean software as a service, cloud services. Those are actually a little bit more like products because it's confusingly called services, but it's really about buying technology. We set up an MSA because the vendor's people are going to provide some service. So let's say they're writing software or customizing software for the customer, and they expect, you know, multiple different projects doing that. Negotiate all the terms in an msa, and then each project is described in a separate statement of work.
01:14
David Tollen
In most cases, the really technical terms about what the software they're developing is supposed to be, that's in the statement of work. You wouldn't want to put all those technical specifications and stuff in the main body. The theory that there's going to be different ones for different projects. The other thing to understand when you're doing this for a project, like I'm describing, where the service involves creating a product, you sort of crossing the line from a services contract to a product contract. Often in master services agreements, particularly about technology, you'll have this defined term, deliverables. Deliverables is the thing that people are making that the professional services are making as part of the services described under the statement of work. And when they finish a deliverable, they finish this version of the software, they will deliver it literally to the customer.
02:16
David Tollen
And the customer will often do acceptance testing to determine whether it's right. And if it's accepted, they move on to the next project or maybe the next phase in that project. And as a result, the MSA will also have terms, even though it's mostly about services, about those products. Maybe it's software. So you've got a license to that software in the main body, the MSA that basically says once the deliverable is accepted, the following license kicks in and the customer has a license to, you know, reproduce it and put it on their computers for five years, whatever it might be.
