Managed Services Agreement Template for the UK
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What is a Managed Services Agreement?
A Managed Services Agreement sets out how a service provider will handle specific business functions for their client on an ongoing basis. These contracts are common when companies outsource IT support, facilities management, or other operational services to specialist providers under English law.
The agreement spells out service levels, response times, and performance standards that the provider must meet. It also covers key issues like data protection, confidentiality, and liability limits. Most importantly, it creates clear accountability by defining exactly what services will be delivered, how they'll be measured, and what happens if things go wrong.
Sample clauses: standard wording in a UK managed services agreement
6. Service Levels and Service Credits
6.1 The Supplier shall perform the Services in accordance with the service levels, response times and performance standards set out in Schedule [2] (the "Service Levels"), and shall measure and report its performance against each Service Level within [10] Business Days of the end of each Measurement Period.
6.2 If the Supplier fails to meet a Service Level in any Measurement Period, the Customer shall be entitled to the service credits calculated in accordance with Schedule [2], provided that the aggregate service credits payable in any [rolling 12 month] period shall not exceed [10]% of the Charges paid or payable in that period.
6.3 Service credits are a price adjustment reflecting the reduced value of the Services received and are not a penalty; they are the Customer's sole financial remedy for a Service Level failure, save that the Customer retains its rights under clause 6.4 and its right to terminate for material breach.
6.4 If the Supplier fails to meet the same Service Level in [three] consecutive Measurement Periods, or any [five] Service Levels in any [rolling six month] period, the Customer may require the Supplier to produce a remediation plan within [10] Business Days and, if the failure continues, terminate this agreement on [30] days' written notice without further liability.
14. Limitation of Liability
14.1 Nothing in this agreement limits or excludes either party's liability for death or personal injury caused by negligence, for fraud or fraudulent misrepresentation, or for any other liability which cannot lawfully be limited or excluded.
14.2 Subject to clause 14.1, neither party shall be liable for loss of profit, loss of anticipated savings, loss of business opportunity or any indirect or consequential loss, provided that this clause does not exclude the Customer's liability to pay the Charges or either party's liability for breach of clause [15] (Confidentiality) or clause [16] (Data Protection).
14.3 Subject to clause 14.1, each party's total aggregate liability arising out of or in connection with this agreement, whether in contract, tort (including negligence) or otherwise, shall not exceed [125]% of the Charges paid and payable in the [12] month period preceding the date on which the claim arose.
Illustrative extract showing typical drafting under the law of England and Wales. Documents generated with GenieAI are tailored to your rules, standards and context.
Frequently Asked Questions
When should you use a Managed Services Agreement?
Consider putting a Managed Services Agreement in place when outsourcing vital business functions like IT support, facilities management, or customer service to external providers. This becomes especially important when the service involves handling sensitive data or mission-critical operations under UK data protection laws.
The agreement proves invaluable when your organization needs consistent, measurable service delivery over months or years. It's particularly useful for complex services requiring specific performance standards, regular reporting, and clear escalation procedures. Many companies implement these agreements when scaling operations or focusing internal teams on core business activities.
What are the different types of Managed Services Agreement?
- IT Managed Services Agreement: Focuses on technology support, network maintenance, and cybersecurity services with specific IT service levels and response times
- Cloud Managed Services Agreement: Covers cloud infrastructure management, data storage, and platform maintenance with special attention to data protection requirements
- Facilities Management Agreement: Addresses physical infrastructure maintenance, security, and property services with detailed performance metrics
- Managed Backup Service Agreement: Specializes in data backup, disaster recovery, and business continuity services with specific recovery time objectives
- Business Management Consulting Agreement: Focuses on strategic advisory services, operational improvements, and business process optimization
Who should typically use a Managed Services Agreement?
- Service Providers: Technology companies, facilities management firms, or specialist consultancies who deliver the managed services and must meet contractual obligations
- Client Organizations: Businesses of all sizes who outsource specific functions, typically represented by department heads or procurement teams
- Legal Teams: In-house counsel or external solicitors who draft and review agreements to ensure compliance with UK regulations
- Service Managers: Staff who oversee day-to-day service delivery and monitor performance against agreed metrics
- Finance Directors: Responsible for budgeting, cost control, and approving payment terms within the agreement
How do you write a Managed Services Agreement?
- Service Scope: Define exact services, delivery locations, and performance standards expected from the provider
- Key Personnel: List main contacts, decision-makers, and escalation paths for both parties
- Timelines: Map out service hours, response times, reporting schedules, and contract duration
- Compliance Requirements: Gather relevant UK data protection, industry regulations, and security standards
- Financial Details: Outline fee structure, payment terms, and any performance-linked incentives
- Exit Strategy: Plan transition arrangements, notice periods, and data handover procedures
What should be included in a Managed Services Agreement?
- Parties & Definitions: Full legal names, registered addresses, and clear definitions of key terms and services
- Service Specifications: Detailed scope, service levels, performance metrics, and quality standards
- Payment Terms: Fee structure, payment schedule, late payment consequences, and price review mechanisms
- Data Protection: GDPR compliance measures, data handling procedures, and confidentiality obligations
- Term & Termination: Contract duration, renewal options, and grounds for early termination
- Liability & Indemnity: Risk allocation, insurance requirements, and limitation of liability caps
- Dispute Resolution: Governing law, jurisdiction, and agreed resolution procedures
What's the difference between a Managed Services Agreement and a Cloud Services Agreement?
A Managed Services Agreement differs significantly from a Cloud Services Agreement in several key ways, though both deal with technology services. The main distinction lies in their scope and operational approach.
- Service Delivery Model: Managed Services Agreements cover ongoing, proactive management of business functions, while Cloud Services Agreements focus specifically on access to and use of cloud-based platforms or applications
- Resource Allocation: Managed services typically include dedicated staff and resources, whereas cloud services provide shared infrastructure without dedicated personnel
- Performance Metrics: Managed Services Agreements include comprehensive service levels across multiple business functions, while Cloud Services Agreements focus on technical metrics like uptime and data storage
- Support Structure: Managed services offer customised, hands-on support with designated account managers, while cloud services typically provide standardised technical support channels
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About the Managed Services Agreement
- Service Scope: Define exact services, delivery locations, and performance standards expected from the provider
- Key Personnel: List main contacts, decision-makers, and escalation paths for both parties
- Timelines: Map out service hours, response times, reporting schedules, and contract duration
- Compliance Requirements: Gather relevant UK data protection, industry regulations, and security standards
- Financial Details: Outline fee structure, payment terms, and any performance-linked incentives
- Exit Strategy: Plan transition arrangements, notice periods, and data handover procedures
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