6 Things to Include in Your Managed Service Providers Contract


Many companies outsource IT processes to a managed service provider (MSP). While it’s a great idea, they need to remember that to protect themselves, avoid surprises, and prevent any type of mishaps, they will need an MSP contract. But what kind of information should be included in an MSP contract?

When developing an MSP contract, be sure terms are clear and concise, and avoid using technical jargon. The more information that is included, the more it benefits both parties. While this isn’t a complete list, here are six things to ensure you include in an MSP contract:

1. Services

First, define exactly what it is that will be provided. What is the client getting? Be sure to be as clear and exact as possible. Outline and mention any and all services now to avoid any confusion in the future.

2. Contract Terms

Terms of the MSP contract include several important aspects, including the following:

  • Payment. Payment should include payment amount, dates, and method.
  • Taxes. Hiring a freelancer doesn’t mean taxes aren’t an issue. Be sure to include a section on how taxes will be handled.
  • Period of service. What is the length of the contract? 12 months? 36 months?
  • Agreement termination. Include a clause that allows for either party to terminate the agreement; however, be sure to state in clear and concise language the acceptable grounds for termination of the agreement. In addition, you can add a penalty if the agreement is terminated outside the agreement terms.

3. Responsibilities

The MSP contract should clearly define, in detail, what the responsibilities will be in various scenarios. In addition, be sure to define what each situation looks like in the contract (e.g., wear and tear versus willful destruction of property). The more detail the better to avoid any misconceptions of responsibilities later.

4. Priorities

Clearly define what constitutes a priority to avoid any confusion for both parties. This avoids the client prioritizing petty issues that may seem urgent at the time or using services for general technical issues.

5. Availability and Response

Clients often have unrealistic expectations regarding services. The MSP contract helps both parties come to a more realistic understanding of service availability and response. Define the services that will be provided in clear, concise, and realistic terms. In addition, what are the response terms? Be sure to state plainly what type of response the client can expect when or if they report an issue, including time and any additional charges.

6. Potential Issues, Problems, or Unforeseen Circumstances Having an MSP contract doesn’t mean issues, problems, or complications won’t arise. Misunderstandings happen. When preparing your MSP contract, take the extra time to protect everyone’s best interest, and give forethought to legal issues as well. Here are a few areas of the MSP contract that may require a little extra attention:

  • Privacy and confidentiality. A breach of confidentiality or privacy entails a host of legal issues for both parties involved. The MSP contract should state clear boundaries for what can and cannot be shared both during and after the contract terms.
  • Talent poaching. A satisfied customer luring away a talented technician is not uncommon. To prevent talent poaching, the MSP contract should include a non-solicitation clause.
  • Unforeseen or sudden termination of a project. As most freelancers working independently, unforeseen situations such as an illness or accident can make it impossible for them to continue the project. In such cases, the client must be protected, ensuring a backup is in place or that all files and assets will be turned over and continued by a secondary, and billed for work completed to that that point.

Many clients will act in good faith, especially if you have worked with them previously. However, knowing what’s expected from both parties and setting terms in advance helps to avoid potential disputes, issues, and problems. Having an MSP contract allows all parties to concentrate on doing the best work possible. As a bonus, if a problem occurs, you already have the answer. All you need to do is implement the solution.