You have a client who wants to keep working with you, and every new project restarts the same conversation about payment terms, who owns what, and what happens if something goes wrong. A master services agreement (MSA) settles those questions once.
The MSA is the umbrella. Each project hangs off it as a short statement of work (SOW) with the scope, fees and dates. Get the MSA right once and the SOWs become routine.
How an MSA and SOW fit together
The MSA holds terms that do not change between projects: how you invoice, who owns the work, confidentiality, liability, termination and disputes. The SOW holds what does change: deliverables, timeline, fees, milestones and acceptance criteria.
Add one line that decides conflicts, so nobody has to argue about it later: the SOW wins on scope and fees for that project, and the MSA wins on everything else.
The clauses, with sample wording
The wording is deliberately plain. Use the list to check a client's draft as much as to write yours.
Who you are to each other
State that you are an independent contractor, not an employee, so the client has no PF, ESI or gratuity obligations and you control how you work.
The Freelancer provides services as an independent contractor. Nothing in this Agreement creates an employment, partnership or agency relationship. The Freelancer decides how, when and where the work is done, subject to the deadlines in each SOW, and is responsible for their own taxes.
Scope by SOW
Each project will be described in a Statement of Work (SOW) signed or accepted by email by both parties. The SOW sets out the deliverables, timeline, fees, milestones and acceptance criteria. Work outside an SOW, or changes to it, need a written change request agreed by both parties before the work starts. If an SOW conflicts with this Agreement, the SOW applies to scope and fees for that project; this Agreement applies to everything else.
Payment and late payment
Say how fees are quoted (in rupees, plus GST if you are registered), when you invoice, how long the client has to pay, and what happens if they do not. The deposits and payment terms playbook covers advances, milestone splits and the MSMED Act rules for Udyam-registered micro and small enterprises in more detail.
Fees are set out in each SOW in Indian rupees and are exclusive of GST, which will be added at the applicable rate where the Freelancer is registered. The Client may deduct TDS as required by law and will issue the TDS certificate on time. The Freelancer will invoice as set out in the SOW. Invoices are due within 15 days of the invoice date. Overdue amounts carry interest at 1.5% per month, or the rate under the MSMED Act, 2006 where it applies, whichever is higher. If an invoice is more than 15 days overdue, the Freelancer may pause work after giving written notice, and deadlines will move by the length of the pause.
Keep the contractual rate moderate. Section 74 of the Indian Contract Act says a higher interest rate from the date of default may be treated as a penalty, and a court can cut it down. The MSMED Act rate is different: it is set by law and applies whatever the contract says, if you qualify.
IP transfer on full payment
The common mistake is a clause that hands the client "all work product" from the moment it is created. Tie the transfer to full payment, and keep your own tools.
On receipt of full payment for an SOW, and in consideration of the fees in that SOW, the Freelancer assigns to the Client all copyright and other rights in the final deliverables listed in that SOW, worldwide and for the full term of those rights. The assignment does not lapse if the Client does not use any of the rights within a year. Until full payment, the Client has a licence to review the work only. The Freelancer keeps ownership of their pre-existing material and general know-how, including code libraries, templates, frameworks and design systems used in the deliverables, and grants the Client a perpetual, non-exclusive licence to use them as part of the deliverables. The Freelancer may show the work in their portfolio after public launch, unless the SOW says otherwise.
Section 19 of the Copyright Act sets the rules this clause is written around. An assignment has to be in writing and signed by you as the assignor. It should name the work, the rights, the duration, the territory and the payment. If it leaves out the duration, it lasts five years; if it leaves out the territory, it covers India only; and rights the client does not use within a year lapse unless the assignment says otherwise. "Worldwide, for the full term" and the no-lapse line deal with those defaults. Sign the MSA or SOW that carries the assignment with a wet signature, a DSC or eSign, not just a typed name in an email.
Confidentiality
Mutual, with the usual exclusions and an end date. The NDA review checklist covers the details if the client sends a separate NDA.
Each party will keep the other's confidential information private and use it only for the work under this Agreement. This does not cover information that is public, already known to the receiving party, independently developed, or required to be disclosed by law. These obligations last for two years after this Agreement ends.
Liability cap
One bug, a missed deadline or a typo in a campaign should not put your savings at risk. Cap your total liability, and exclude indirect losses like lost profits.
Each party's total liability under this Agreement is limited to the fees paid to the Freelancer in the 12 months before the claim. Neither party is liable for indirect or consequential losses, including lost profits or lost data. These limits do not apply to fraud, wilful misconduct or breach of confidentiality.
An uncapped indemnity elsewhere in the draft can undo the cap.
Termination and kill fee
Both sides should be able to leave with notice. What matters is that you are paid for work done, and for the time you reserved.
Either party may end this Agreement or any SOW with 15 days' written notice. Either party may end it immediately if the other materially breaches it and does not fix the breach within 10 days of written notice. On termination the Client will pay for all work done up to the termination date, any approved expenses, and a kill fee of 25% of the remaining fees for the SOW if the Client ends it without cause. The Freelancer will hand over completed work on receipt of payment. Clauses on payment, IP, confidentiality, liability and disputes continue after termination.
Keep the kill fee proportionate to the time you blocked and the work you turned down. Under section 74 of the Indian Contract Act, a court awards reasonable compensation up to the stated figure, not the figure itself, and courts have generally expected a real loss behind it. A modest, justified amount is easier to enforce than a punitive one.
Governing law, jurisdiction and disputes
Choose Indian law and a city you can reach, usually your own. Then set the order of steps: talk first, then mediation or arbitration, then court only if needed.
This Agreement is governed by the laws of India. The parties will first try to resolve any dispute by discussion between senior representatives within 15 days of written notice.
If that fails, the dispute will be referred to arbitration by a sole arbitrator appointed by both parties under the Arbitration and Conciliation Act, 1996. The seat and venue of arbitration will be {{your city}}, and the language English. Subject to this, the courts at {{your city}} have exclusive jurisdiction.Arbitration is private and usually faster than a civil suit, but an arbitrator's fees can exceed a small unpaid invoice. For amounts under a few lakh rupees, a lawyer's legal notice, or the MSME delayed payment route if you are Udyam-registered, is often the cheaper first move. The difficult clients playbook covers what to do when a client stops paying.
Clauses to push back on in the client's draft
Clause in their draft | Why it is risky | What to ask for |
|---|---|---|
Unlimited liability or uncapped indemnity | One mistake could end your practice | Cap at fees paid in the last 12 months |
Non-compete across a whole industry | Blocks future work; often void after the contract anyway | Limit to named direct competitors, during the term |
Termination without payment for work done | You lose the in-flight work | Pay for work to date plus a kill fee |
Client owns "all works" from creation | Takes your tools and templates | Assign final deliverables on full payment; keep pre-existing IP |
Payment "on client's satisfaction" | No objective point at which you are owed money | Acceptance criteria in the SOW, with deemed acceptance after 7 days of silence |
Courts in a city you cannot reach | A dispute becomes too expensive to pursue | Your city, or a neutral online arbitration |
Red flags that mean walk away
Some drafts are not worth negotiating. A client who wants to convert you to near-full-time hours without a salary conversation, an "as needed" scope with no SOW gating, or an uncapped indemnity for third-party claims that they refuse to cap is telling you how the relationship will run.
Using your MSA in practice
Send your MSA, signed by you, with your first proposal to a new client. Most small and mid-sized Indian clients accept a sensible template with light edits. Larger companies send their own; check it against the table above and ask for the few changes that matter most rather than redlining every line. Keep the signed MSA, each SOW and every change request in one folder per client.
Common questions
Do freelancers in India need a master services agreement?
If you work with the same client on more than one project, yes, it saves time. The MSA holds the legal terms once, and each new project needs only a short SOW with scope, fees and dates. For a single small project, a combined agreement with the scope attached does the same job.
Is an MSA signed by email or e-signature valid in India?
Usually, yes. The IT Act says a contract is not unenforceable just because it was made electronically, so acceptance by email or a click-to-sign tool generally holds, and electronic records can be produced in court. The signatures the Act specifically recognises are digital signature certificates and eSign based on Aadhaar or other e-KYC. For high-value work, and for the IP assignment you sign, use one of those and keep the emails that show both sides agreed.
Does an MSA need stamp duty?
Agreements in India attract stamp duty under the stamp law of the state where they are signed. The Supreme Court has held that an unstamped agreement is not void, but a court will not admit it as evidence until the duty and any penalty are paid. The amount depends on the state and the type of document. Buy an e-stamp paper for your state or ask your lawyer.
Can a client make me sign a non-compete?
Section 27 of the Indian Contract Act makes an agreement that restrains anyone from carrying on a lawful profession or business void to that extent, and courts have generally applied it to non-competes that run after the contract ends. Restrictions during the contract, or a promise not to poach the client's staff or use their confidential information, have generally been treated differently. Ask to narrow any non-compete to named direct competitors for the contract's term.
Who owns the work if the MSA says nothing about IP?
As a freelancer you are not an employee, so for most work the copyright starts with you and moves to the client only by an assignment in writing signed by you. Some commissioned work has a different default: for a photograph, painting, portrait, engraving or film made for payment at the client's request, the client owns the copyright unless you agree otherwise. Do not rely on defaults in either direction; write the IP clause.
