What Is a Minnesota MSA?

A Minnesota Master Services Agreement (MSA) is a foundational contract between a service provider and a client that sets out the essential terms—such as payment, liability, intellectual property, and dispute resolution—that will govern all future work engagements. This agreement allows the parties to execute subsequent Statements of Work (SOWs) for specific projects without renegotiating the entire contract.

Definition

Definition: A Minnesota Master Services Agreement is a comprehensive contract between two parties (typically a client and a service provider) operating in Minnesota. It establishes the legal framework—including payment terms, liability limits, and intellectual property rights—that applies to all future projects. Instead of drafting a new contract for each engagement, parties sign a single MSA and attach simple "Statements of Work" (SOWs) for individual tasks.

Why You Cannot Use a Generic MSA in Minnesota

Using a generic Master Services Agreement in Minnesota can expose businesses to significant legal risks. Minnesota has specific laws and regulations that affect contract enforceability, worker classification, and intellectual property rights. Here’s why a tailored MSA is crucial:

Worker Classification Rules

Minnesota primarily uses the common law test to determine whether a worker is an employee or an independent contractor. This test considers factors such as the level of control over the work performed and the method of payment. Misclassification can lead to penalties, including back taxes and fines. According to Minn. Stat. § 541.05, the statute of limitations for contract disputes is six years, which means misclassification issues can have long-lasting financial implications.

Non-Compete Enforceability

Non-compete agreements are enforceable in Minnesota, but they must be reasonable in scope, duration, and geographic area. According to Minnesota case law, non-competes must protect a legitimate business interest and cannot impose undue hardship on the employee. Alternatives, such as confidentiality agreements, can be used to protect business interests without the stringent requirements of non-competes.

IP/Work-for-Hire Considerations

In Minnesota, intellectual property rights are typically governed by contract law. It's crucial to clearly define whether the work is a "work for hire" or if IP rights are assigned to the client. This distinction affects ownership and rights to use the work product. Properly drafted IP clauses in an MSA can prevent disputes and ensure that both parties understand their rights and obligations.

What's Included in This Template

Flexible Statement of Work (SOW) Structure

The MSA serves as a legal umbrella, while attached SOWs detail specific deliverables, timelines, and fees, allowing for streamlined project management.

Minnesota-Specific Indemnification

The indemnification clause is tailored to Minnesota standards, balancing risk between parties with mutual hold-harmless provisions and insurance requirements.

Dispute Resolution and Venue

The template sets venue to Minnesota courts, ensuring that any disputes are resolved within the state’s jurisdiction, which is crucial for local businesses.

• Late payment interest per Minn. Stat. § 334.01
• Waiver of unknown claims per Minn. Stat. § 541.05
• Data protection compliance under the Minnesota Data Privacy Act (2023)
• 6-year statute of limitations acknowledgment per Minn. Stat. § 541.05

Who Needs This Document?

How to Use This MSA Template

Step 1: Define the Parties

Identify and fill in the legal names and entity types for both the Provider and Client, ensuring accuracy for legal purposes.

Step 2: Set the Term

Decide on a fixed term or an evergreen agreement that continues until either party provides written notice of termination.

Step 3: Attach Your First SOW

Do not include project deliverables in the MSA itself. Use the attached SOW template for specific scope, timeline, and payment terms.

Step 4: Execute the Agreement

Both parties sign the MSA once. Future projects only require signing a new SOW, with the MSA terms automatically applying.