The term of an agreement may seem like a no-brainer. The traditional way of dealing with the term is to have the master service agreement (“MSA”) begin on a specific day and terminate or renew after a fixed period. But this doesn’t always work for the MSA-order form model I posted about earlier.
If the supplier provides multiple products, you could have various orders with varying subscription terms that may end before or after your MSA term.
And if you’re the supplier, you do not want to be bound by any legal obligations if you’re not being paid for a subscription. That is, you wouldn’t want to have the MSA start before the customer orders a subscription, and you wouldn’t want it to continue if all subscriptions have expired.
This is why in most SaaS arrangements you’ll see that the MSA begins when the first order begins and terminates when the last order terminates. This solves the problem of a live MSA when there are no live subscriptions.
However, there are other considerations when choosing this approach. What drawbacks have you seen with this approach?