Startup MSA Redline Checklist

Use it as a shared standard: pin it, share it with anyone who touches deals, and treat deviations as decisions, not accidents.

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How to use this

1. Open the latest .docx (not a PDF screenshot of a Word file).
2. Work top to bottom. Flag anything that fails a check.
3. For each flag: accept, counter with your standard language, or escalate (outside counsel / board).
4. Keep one canonical version. If you're still hunting attachments named FINAL_v7_REAL.docx, fix the process before you fix the clause.

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1. Parties, effective date, and what's actually in scope

• Legal names match the entities that will invoice and pay (no "doing business as" ambiguity).
• Effective date is filled in, or clearly tied to signature / first invoice.
• Scope of services is specific enough that "out of scope" work would be obvious.
• Related docs (SOW, Order Form, DPA, SLA) are listed and attached, not "to be agreed later."
• Order of precedence is clear if the MSA and SOW conflict (how MSAs, SOWs, and order forms stack).

Why it matters: Ambiguous parties and floating exhibits are how you end up enforcing the wrong deal.

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2. Term, renewal, and exit

• Initial term length matches what you intended (12 vs 24 months is a common silent change).
• Auto-renewal: exists or not, and notice window is realistic for your board / budget cycle (30 days is tight; 60–90 is common for quarterly planning).
• Termination for convenience: who has it, and what's the wind-down / refund?
• Termination for cause: cure period is defined (often 15–30 days).
• Survival clauses listed (confidentiality, IP, liability, indemnity), and not everything "survives forever."

Redline cue: If auto-renew needs board approval and notice is 30 days, you will miss it. Push the notice window or kill auto-renew. More on auto-renewal notice windows.

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3. Fees, payment, and price changes

• Fees, currency, and billing frequency match the commercial deal you actually sold / bought.
• Payment terms (Net 15 / 30 / 60) match cash-flow reality, not a quiet edit in the last round.
• Late fees / interest are capped and reasonable.
• Price increases: capped, noticed in advance, or tied to a clear index, not "at our discretion."
• Taxes, expenses, and pass-throughs are explicit.
• Refunds / credits on early termination are spelled out.

Redline cue: Diff payment terms against your last approved draft. Net 30 → Net 60 is a classic invisible change (Net 30 vs Net 60).

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4. Intellectual property

• Pre-existing IP stays with its owner.
• Work product / deliverables: who owns what after payment?
• License grants (to customer and to vendor) are limited to what's needed to perform the deal.
• Feedback / suggestions aren't an unbounded IP assignment unless you mean that.
• Open-source / third-party components: disclosure and license compliance if relevant.

Redline cue: "Vendor owns all improvements" can quietly eat your custom work. Narrow it.

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5. Confidentiality and data

• Confidentiality mutual (or deliberately one-way, and you're okay with that).
• Definition of Confidential Information isn't so broad it covers public marketing materials.
• Residuals / "general knowledge" clauses: accept only if you're comfortable with the leak risk.
• Data Processing Agreement / security exhibit attached if personal data or customer data is involved.
• Breach notification timing is defined.
• Return / destruction of confidential materials on exit is practical (and excludes archival backups if needed).

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6. Representations, warranties, and disclaimers

• Mutual authority to sign.
• Service warranty: what "good" looks like (professional manner, conformity to docs, uptime if SLA exists).
• Disclaimer of implied warranties is present and paired with meaningful express warranties, not a total wipeout.
• No hidden "as-is" for paid production services unless that's the deal.

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7. Indemnity (who pays when something goes wrong)

• Indemnity is mutual where both sides create risk (IP infringement, data breach, negligence).
• Covered claims are listed; "any and all claims related to the Agreement" is a fight.
• Procedure: prompt notice, control of defense, no settlement that binds you without consent.
• Customer indemnity for misuse / illegal content is fair; vendor indemnity for IP and security failures usually is too.

Redline cue: One-sided indemnity toward the bigger party is common in vendor paper. Push for symmetry on the risks each side actually controls. See indemnity clauses explained.

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8. Limitation of liability (the clause that decides the lawsuit)

• There is a liability cap (uncapped liability is a hard stop for most startups).
• Cap amount is tied to fees (e.g. 12 months of fees paid), not a token $100.
• Cap applies per claim or in the aggregate, know which.
• Consequential / indirect damages exclusion exists (lost profits, etc.).
• Carve-outs from the cap are limited (typically: confidentiality breach, IP indemnity, willful misconduct, unpaid fees), not a laundry list that voids the cap.
• Your insurance actually covers what you just promised.

Redline cue: "Liable for all damages arising out of this Agreement" with no aggregate cap is nonstandard for SaaS/services. Insert your standard cap language, and see liability caps for startups for what "standard" usually means.

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9. Insurance, compliance, and audit

• Required coverages (GL, cyber, E&O) and limits match deal size.
• Certificates available on request, not as a weekly homework assignment.
• Audit rights: reasonable notice, frequency capped, scoped to relevant records.
• Compliance with laws is mutual and proportionate.

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10. Dispute resolution, law, and logistics

• Governing law is somewhere you can actually litigate or arbitrate.
• Venue / arbitration rules are defined.
• Injunctive relief for IP / confidentiality is preserved if you need it.
• Assignment: change-of-control and financing paths aren't accidentally blocked.
• Notices: email is allowed for operational notices; formal notices have a working address.
• Entire agreement / amendments in writing (no "side Slack deals").
• Counterparts and e-signature explicitly okay.

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Fast "walk away" signals

Treat these as escalate-or-exit unless counsel says otherwise:

1. Uncapped liability with broad carve-outs that empty the cap
2. Unlimited IP assignment of everything you create or improve
3. Auto-renew + short notice you can't operationally hit
4. Unilateral price changes mid-term with no out
5. Audit / security obligations that cost more than the contract
6. Silent edits: tracked changes off, or a "clean" copy that differs from the last redline

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Make the checklist stick

A checklist only works if the document process does:

• One record per deal: every version, every decision, attributed
• Real Word tracked changes (what counterparties actually open)
• Internal notes that can't accidentally forward to the other side
• AI review that points at the clause it claims to have found, so "liability uncapped" is a citation, not a vibe

That's the operating system behind this list. If your current process is still reply-all archaeology and MSA_final_FINAL(2).docx, fix the record before you negotiate the next cap.

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One-page printable summary

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