Master Services Agreement¶

Payment Dispute (client-facing)

Payment Dispute. If any amount claimed as payable is disputed in good faith, the Customer shall pay the undisputed portion and give a 5 business days notice specifying the basis of the dispute in reasonable detail.

Payments that are undisputed by the Customer within 5 business days of receipt are considered accepted.

Difference from Payment Dispute (subcontract version)¶

Mechanically identical, different party:

Same silent-acceptance mechanism applied in opposite roles.

Things to watch¶

• 5 business days is short for client workflows too. Large enterprises often run 10–15 day approval chains — negotiate if needed.
• "Considered accepted" works in our favor here: if the client misses the window, we get paid.
• This clause pairs with Late Payments Interest: 5-day dispute window first, interest after that.

Late Payments Interest

Late Payments. If the Customer does not pay invoices when due, interest on the unpaid amounts of 0.5% per calendar day will be charged starting the day after the payment becomes due.

How this clause works in practice¶

Defensive mechanism for two reasons:

1. Psychological pressure. 0.5%/day ≈ 180% annualized. Client finance teams notice this number and bump our invoices up the payment queue.
2. Legal footing. If collection escalates to court, we have a clean contractual basis for including interest in the claim, without renegotiation.

What this clause doesn't do¶

• Doesn't override Payment Dispute (client-facing). If the client legitimately disputes an amount, interest doesn't accrue on the disputed portion.
• Not a profit mechanism. The point is prompt payment, not earning on delays.
• Not auto-triggered. In practice we only invoice interest on serious delays (30+ days). Smaller delays are negotiated informally.

Why this clause doesn't exist in subcontracts¶

This clause is absent from our subcontract agreements. The reason is simple: we pay subcontractors, and charging ourselves interest for late payment would be absurd. This clause is one-directional, present only in contracts where we are the payee.

Client IP Assignment

Final Works. The Contractor transfers to the Customer all intellectual property rights (IP rights) in all materials developed for or provided to the Customer by the Contractor through the performance of Services (Deliverables), as necessary payments are made during the agreement. If the agreement is terminated, the Contractor shall transfer all finished and unfinished Deliverables previously paid for.

No copyleft licenses. The Contractor warrants that it has not included or used, and will not include or use, any Open-Source Software or any libraries or code licensed under the General Public License, AGPL, or any similar copyleft license in the Software, where such license would require the Customer to license the Software onwards or otherwise make it available to others, without the Customer's prior written consent.

How this works in practice¶

Three principled differences from the subcontract version:

Rolling IP transfer is the important change. The client gets rights progressively as they pay, not "all or nothing after the last invoice." This protects the client if we stop working mid- project for any reason — they retain rights to what they paid for and can continue development with another contractor.

Things to watch¶

• "Necessary payments are made" is slightly awkward legal phrasing. In practice it means: "after we invoice and the customer pays."
• Unfinished Deliverables. On termination we hand over even incomplete code that was paid for. Honest, but it means our repositories must be in a shippable state at all times.
• Copyleft warning is identical to the dev-subcontract version, and that's the point: if a subcontractor introduces a GPL dependency into our code and we ship it to the client, we break both agreements simultaneously.

Mutual Confidentiality

Confidential Information means all material, non-public, business-related information, written or oral, whether marked or not, that is disclosed or made available to the receiving party, directly or indirectly, through any means of communication or observation.

Restrictions do not apply to information that, without breach of this agreement:

• is already known to the receiving party;
• is or becomes publicly known;
• is obtained from a third party without confidentiality obligations;
• is independently developed without using Confidential Information.

Burden of proof for all exceptions to the Confidential Information definition rests with the receiving party.

Confidentiality obligation. The receiving party will hold Confidential Information in confidence, use it only for the Purpose specified in the agreement, and exercise reasonable care to prevent loss or unauthorized disclosure.

Return or destruction. On expiration or termination of the agreement, or on the disclosing party's request, the receiving party shall promptly return all Confidential Information and destroy all copies.

Term of confidentiality. Trade secrets remain protected for as long as the information qualifies as a trade secret. Other Confidential Information is protected for 3 years from the agreement's Effective Date.

When to use this clause¶

Core to any NDA. Present in:

• NDA General — the main document, where this clause is expanded with additional procedures (return/destruction, required disclosure, permitted disclosure).
• Can be referenced from a Services Agreement as an additional layer of protection, though typically NDA and MSA are signed as separate documents.

What this clause doesn't cover¶

• Doesn't prevent reverse engineering of publicly available products.
• Doesn't create obligations for information obtained from public sources.
• Doesn't limit legally-required disclosures (court, regulator), but requires prompt notification of the disclosing party.

Limitation of Liability and Indemnification (mutual)

Mutual Indemnification. Each party (as an indemnifying party) shall indemnify the other (as an indemnified party) against all losses arising out of:

• any proceeding brought by either a third party or an indemnified party; and
• the indemnifying party's wilful misconduct or gross negligence.

Mutual Limit on Liability. Neither party shall be liable for breach-of-contract damages suffered by the other party that are remote or that could not have reasonably been foreseen on entry into this agreement.

Maximum Liability. The Subcontractor's (or Contractor's in a client agreement) liability under this agreement shall not exceed the fees paid under this agreement during the 12 months preceding the date upon which the related claim arose.

Why these three layers¶

Three layers working together:

1. Mutual indemnification — covers third-party suits (e.g., a client sues us over our software; we can flow the indemnification through to the subcontractor if it was their code that caused the problem).
2. Mutual limit — excludes speculative damages (e.g., "we lost a $10M contract because of your 2-day delay" — such unforeseeable consequences aren't covered).
3. Max liability cap — hard ceiling on any liability, tied to the real money that moved between the parties.

Why 12 months¶

This is industry standard in IT services. The argument: liability should be proportional to engagement size. If we paid a subcontractor $100k a year, their maximum liability is $100k. Not $1M, not $50k. Predictable and symmetric.

Some clients try to reduce the cap to 3–6 months or a fixed amount. When they do, understand whether that reduction actually matches the risk profile of the specific project.

What this clause doesn't cover¶

• IP infringement. If we shipped the client code with a GPL dependency and they get sued by the Free Software Foundation — our 12-month fee cap does not limit our liability for IP infringement. That's a separate risk category.
• Confidentiality breach. Breach of Mutual Confidentiality often escapes the mutual limit because damages are "remote by definition" — the client can't exactly calculate what a leak cost.
• Willful misconduct. Intentional breach isn't capped. This is mandatory in many jurisdictions and written into the indemnification clause.

Where used¶

Identical or near-identical clause in:

• Subcontract Dev 2026
• Subcontract PM 2026
• Subcontract Marketing 2026
• Services Agreement 2026

This is the second genuine cross-pillar clause (after Dispute Resolution UK). Changing the cap from 12 to 6 months is one edit across four contracts.

Term and Termination (MSA, at will)

Term. This agreement takes effect on the Start date and continues until terminated by either party in accordance with the terms below.

At-will termination. Either party may terminate this agreement at any time, without cause, by giving the other party 30 calendar days prior written notice.

Shortened notice. After the initial 30-day notice period, the parties may move to 14-day notice for any further amendments or terminations within the scope of this agreement.

Why 30 days¶

A deliberate difference from subcontract agreements (which cap at 14 days). Reasons:

• Client-project handover is harder. When a client leaves, we lose not just a single performer but a whole context: documentation, access credentials, decision history, product knowledge.
• Revenue planning. Client projects are our revenue. 30 days gives Finance and Account Management time to re-plan resources and find a replacement.
• Reputation. Abrupt client-agreement termination is a reputational hit. 30 days signal professionalism.

At-will vs for-cause¶

In the Anglo-Saxon legal tradition, at-will termination means "without having to prove the other party breached the agreement." It's simpler legally because:

• No dispute about what constitutes breach
• No need to document specific failures
• Minimal litigation risk over the termination itself

In exchange, the mandatory 30-day notice is the "price" of that clean exit. Both parties get predictability instead of having to justify themselves.

Where else¶

This clause appears in the Master Services Agreement. Subcontract agreements use a different termination model.

Dispute Resolution (England and Wales)

Negotiation. In case of any controversy or claim arising out of this agreement, the parties shall consult and negotiate with each other and attempt to reach a mutually satisfactory solution.

Choice of forum. If the parties do not reach a settlement within a period of 60 days, any unresolved controversy or claim shall be settled in the courts of England and Wales.

Why England and Wales¶

• Neutral jurisdiction for most of our clients and subcontractors (Germany, Ukraine, EU, US).
• Commercial speed — English commercial courts have a reputation for being fast (relatively) and predictable.
• Language — English, matching the language of most of our contracts.
• Enforcement — English court decisions are widely recognized in many jurisdictions through treaty.

Where this clause is used¶

This is a true cross-pillar clause — it's present in every contract we sign, regardless of payment direction:

• Services Agreement 2026 (client-facing)
• Subcontract Dev 2026 (subcontract)
• Subcontract PM 2026 (subcontract)
• Subcontract Marketing 2026 (subcontract)

If Legal changes the forum (say, to Estonia EL27 following a restructuring of our legal entities), a single edit to this file updates every contract at once. That's the composition model's whole point.

Why 60 days¶

No magic number. 60 days is a compromise:

• Long enough for the parties to meet, exchange positions, and possibly engage a mediator.
• Short enough that a bad-faith party can't drag negotiations indefinitely.
• If a dispute is truly irreconcilable, 60 days is enough to establish that.