MSA red flags to watch before you sign

Vendor MSAs often hide the same risk patterns. Spotting them early saves time in legal and keeps you from locking in terms you’ll regret.

Auto-renewal and notice windows. Many MSAs renew automatically unless you give notice 60 or 90 days before the end of the term. If you miss the window, you’re in for another year. Check the notice clause and calendar the deadline. Some vendors shorten the window in the fine print—30 days is common, and 90 days isn’t rare. Know which you’re signing.

Unlimited liability carve-outs. Cap on liability is standard. What isn’t is a long list of carve-outs that effectively uncap it. Indemnity, confidentiality, and sometimes “fees and costs” can blow past the cap. You don’t need to become a lawyer to spot this: look for “notwithstanding the foregoing” or a list of exceptions right after the cap. If everything important is carved out, the cap may not protect you when it matters.

IP and data. Who owns what you build or upload? Some agreements claim a broad license to your data or to anything “derived from” the services. For product or customer data, that can be a non-starter. Look for ownership and license-back language. Also check where data is processed and stored if you have compliance or residency requirements.

Termination and wind-down. Can you exit on reasonable notice? Are there minimum terms or early-exit fees? After termination, how long do you get your data back, and in what format? A 30-day data return window is common; 14 days can be tight if you have a lot of systems to update.

Fees and increases. Fixed price is one thing; “we can raise prices on 30 days’ notice” is another. Look for annual increase caps (e.g. 5–7%) or the right to pass through new taxes. If there’s no cap, price can move in one direction only.

None of this is legal advice. Use it to prepare for a conversation with counsel and to know where to push back. For a quick view of risk in a specific contract, you can get a free risk analysis or see an example report before sending it to legal.