MSAs, Frameworks, Or Bespoke Contracts: Considerations For Your Organisation

In the world of commercial contracting, one size rarely fits all. Whether your organisation is procuring services, engaging suppliers, or delivering complex projects, the structure of the contract can significantly impact the pace, risk, and flexibility of a business relationship.

Among the most common models are Master Services Agreements (MSAs) or Framework Agreements setting out the overarching legal terms governing the commercial relationship with separate Call-Offs, Statements of Work (SoWs), or Orders setting out the more operational elements for each engagement.

As an alternative, there are individually negotiated bespoke contracts for each engagement.

Each approach reflects different priorities and assumptions about the nature of the relationship, the work involved, and the commercial context. While individually negotiated bespoke contracts offer tailored terms, they can introduce additional complexity and delay, especially where a long-term or repeat business relationship is anticipated. This is where Master Services Agreements (MSAs) or Framework Agreements are often used.

What is an MSA or Framework Agreement?

An MSA or Framework Agreement is a form of pre-agreed umbrella contract that sets out the core overarching legal and commercial terms that will govern the parties’ relationship over time. These agreements are typically used where there is an expectation of ongoing or repeat business or the scope of the services or goods may vary from project to project, and therefore, there is a foreseeable need for speed and consistency in future business dealings. The MSA or Framework does not usually commit either party to specific work at the outset. Instead, it provides a structure under which individual projects or transactions can be initiated through Call-Offs, SoWS, or Orders.

This model is often associated with sectors or relationships where services or deliverables are modular, repeatable, or capable of being scoped incrementally. The initial agreement tends to focus on standardising key terms such as audit, liability, intellectual property, confidentiality, dispute resolution, and jurisdiction while leaving the specifics of each engagement to be defined later.

Call-Offs, Statements of Work, and Orders

Once an MSA or Framework is in place, individual projects or transactions are governed by individual discrete engagements which the parties can enter into by issuing a Call-Off or agreeing a SoW or Order. These documents typically define the scope, deliverables, timelines, pricing, and any project-specific terms (including service levels). They are usually shorter and more operational in nature, and reference (incorporate) the MSA or Framework legal terms.

This layered approach can support agility and consistency, particularly where multiple projects are being delivered in parallel or over time. It can also reduce the need for repeated negotiation of standard terms, making subsequent engagements quicker and simpler to negotiate.

Bespoke Contracts: The Standalone Approach

In contrast, bespoke contracting involves drafting a new, standalone agreement for each transaction or project. These contracts are typically tailored to the specific commercial and legal risks of the deal in question. Every term, from payment structure through to liability caps is negotiated from scratch.

This approach may be preferred where the transaction is unique, of high-value, or strategically significant, or where the parties do not anticipate further engagements. It allows for a high degree of specificity and control but can also involve longer negotiation cycles and greater legal input.

Comparing the Approaches

MSAs and Frameworks can support speed and consistency, particularly in long-term relationships or where services are delivered in phases. They may also facilitate better governance across a portfolio of work. However, they require careful drafting at the outset to ensure that the umbrella terms are robust and adaptable to different types of work.

Bespoke contracts, on the other hand, offer a clean slate for each engagement. This can be advantageous where the parties need to address novel risks or where the commercial terms vary significantly from deal to deal. The trade-off is often a longer lead time and higher transaction costs.

The table below provides a comparative overview of MSAs/Framework Agreements against individually negotiated bespoke contracts. It outlines key features, advantages, and considerations for each approach, which may assist what is better suited for your organisation’s needs.

Conclusion

Each of the above approaches reflects a different way of structuring commercial relationships. Their value lies not in being inherently better or worse than one another, but in how well they align with the nature of the work, the expectations of the parties, and the broader commercial context. By understanding their respective characteristics, organisations can make informed decisions about which structure best supports the relationship and objectives at hand.  In practice, organisations may use a combination of both models depending on the nature and frequency of their engagements.