What is a Kentucky MSA?

A Kentucky Master Services Agreement (MSA) is a foundational contract between a service provider and a client, setting the terms for all future engagements, including payment, liability, and intellectual property rights, specific to Kentucky's legal environment.

Definition

Definition: A Kentucky Master Services Agreement is a comprehensive contract that establishes the legal framework for ongoing business relationships between service providers and clients in Kentucky. It covers essential terms such as payment schedules, liability limits, and intellectual property rights, ensuring compliance with Kentucky statutes like KRS 413.090 and KRS 360.010.

Why You Cannot Use a Generic MSA in Kentucky

Using a generic MSA template in Kentucky can expose businesses to legal risks due to specific state laws that govern worker classification, non-compete agreements, and intellectual property rights. Here's why a Kentucky-specific MSA is crucial.

Worker Classification Rules

Kentucky follows a common law approach to worker classification, focusing on the degree of control a business has over a worker. This is similar to the IRS guidelines, which assess behavioral control, financial control, and the nature of the relationship. Misclassification can lead to severe penalties, including back taxes and fines. According to Kentucky Revised Statutes (KRS) 336.010, businesses must ensure proper classification to avoid potential liabilities.

Non-Compete Enforceability

Non-compete agreements are enforceable in Kentucky but must meet specific criteria to be valid. The agreements must be reasonable in terms of duration, geographic scope, and the interests they protect. Typically, a non-compete should not exceed two years and should be limited to areas where the employer operates. KRS 336.700 prohibits non-competes that unreasonably restrict a worker's ability to earn a livelihood. Alternatives like confidentiality agreements and non-solicitation clauses can offer protection without overstepping legal boundaries.

IP/Work-for-Hire Considerations

In Kentucky, intellectual property assignments must be explicitly stated in the contract. The "work made for hire" doctrine applies, meaning that unless otherwise agreed, the employer owns the rights to works created by employees. For independent contractors, explicit IP assignment clauses are necessary to transfer ownership. KRS 355.2-201 requires written agreements for such transfers, ensuring clarity and legal enforceability.

What's Included in This Template

Flexible SOW Structure

The MSA includes a flexible Statement of Work (SOW) structure, allowing parties to define specific project terms without renegotiating the entire agreement.

Kentucky-Specific Indemnification

The indemnification clause is tailored to Kentucky law, balancing risk between parties and including provisions for gross negligence and willful misconduct.

Dispute Resolution and Venue

The template sets the venue to Kentucky courts, as per KRS 355.1-301, ensuring any legal disputes are handled within the state.

• 15-year statute of limitations (KRS 413.090)
• Interest rate on late payments (KRS 360.010)
• Kentucky Consumer Protection Act compliance (KRS 367.110 et seq.)

Who Needs This Document?

How to Use This MSA Template

Step 1: Define the Parties

Identify the legal names and entity types of both the Provider and Client, ensuring they match official registrations.

Step 2: Set the Term

Decide on a fixed term or an evergreen agreement that renews automatically unless terminated.

Step 3: Attach Your First SOW

Use the provided SOW template to specify project details like scope, deadlines, and payment terms.

Step 4: Execute the Agreement

Both parties should sign the MSA once, with future projects requiring only new SOWs under the existing terms.