NDA, MSA, SOW and SLA. Confidentiality agreements when you outsource QA

Today, the world wide web processes tones of private data we openly share. Sure, building trust with each other is crucial for healthy relationships. But sometimes we come across negative experiences of stolen ideas, plagiarism, or privacy policy violation.

The same fears come up when you plan to execute your software business project. Often, start-ups use outside services for web development, design, and quality assurance. However, you may worry about the copyright security when it comes to sharing your idea with so many people. We decided to briefly explain the legal ways to protect your software from leakages when you hire an independent QA team. With this information in mind, you`ll keep the cooperation safe and result-oriented.

Sign a Non-Disclosure Agreement (NDA)

NDA is one of the most commonly used documents in the sphere of business and tech in particular. The companies strive to keep a great deal of confidentiality regarding their ongoing developments, and that’s not surprising at all. And it makes sense to look at this kind of agreement in more detail.

NDA meaning

Let’s start with the essentials – NDA meaning. NDA is a legal document between two or more parties that includes confidential information shared by the company and the client. The primary goal of this agreement is to keep private information secure from shares to third parties. It protects your business idea against copyright violation.

Types and Particularities of an NDA

NDA can be unilateral (one-way), bilateral (signed between a contractor and a client), and multilateral (several parties involved). The form is mostly individual. The parties usually create it after the initial discussion of the project scope. In any case, it is important to sign NDA agreement before revealing any project details.

Standard NDA should:

• Include the information to consider as confidential
• Explain which information doesn`t undergo NDA policy
• Protect intellectual property rights
• Pinpoint a duration of NDA (usually it is valid 2, 5, or 10 years)
• Set conditions of breaking the contract

When you are hiring independent QA engineers for your project, make sure the company is ready to follow NDA policy with the clients. Such confidentiality agreement prevents the company from using your product idea, design, functionality, etc. Moreover, it forbids QA engineers presenting their work publicly.

You can find an example of an NDA below.

NDA example – download PDF

Why Have a Master Service Agreement?

The MSA sets the basic terms that will regulate future agreements between a client and an agency. It includes maximum possible terms and speeds up the agreement process. In the future, you won`t need to renegotiate the deal and focus on project details instead.

An MSA typically includes:

• Service overview
• Payment terms: the rate, deadlines, covered and uncovered expenses
• Audits: the ways a client can check the progress of the project completion
• Confidentiality terms
• Product warranties
• Dispute resolution process

So, MSA governs the entire relationship between the parties. It doesn`t include the process of service delivery. You may be interested in signing a Master Service Agreement if you never worked with an agency before. However, if you don`t have MSA, it is crucial to outline all the legal terms in the Statement of Work.

MSA example – download PDF

Now, let’s take a look at how MSA is different from other business agreements, such as SOW (statement of work) and SLA (service level agreement).

MSA vs SOW

The main difference between MSA and SOW is their scope. MSA describes the general terms and conditions and sets up the legal framework of a business relationship, while SOW defines the specific details of a particular project or engagement under the MSA. In other words, MSA governs SOW, but SOW can exist independently due to its specificity when it comes to an individual project.

Further, MSA typically acts as a long-term basis for cooperation. Master service agreement outlines how both parties will engage generally. So there is no need to draft another MSA if the hired company needs to proceed with one more project. SOW, on the other hand, should be updated or drafted from scratch for each new project during an ongoing business venture.

In short, a master service agreement and a statement of work are distinct in the following areas:

• Scope of work.
• Level of detail.
• Duration.
• Dependence (MSA can include several SOWs, but SOW usually depends on one MSA).

To conclude “master services agreement vs statement of work” in one sentence, MSA is better suited for prolonged and complex partnerships, and SOW is optimal for one-time or highly precise collaborations (though they are often used together).

MSA vs SLA

Simply put, the differences between MSA and SLA are somewhat similar to those between MSA and SOW. But to put it in perspective, SOW regulates provided services, and SLA establishes how these services are measured.

So, when we talk about master service agreement vs service level agreement, the primary distinction is their purpose. MSA dictates the relationship between a vendor and a client, i.e., the responsibilities and obligations of each party, and SLA determines how to ensure that the provided services are delivered per the set conditions.

While MSA is flexible to accommodate future cooperation, failure to provide services defined under SLA can lead to contract termination. Hence, the most notable differences between MSA and SLA are:

• Governing area (MSA controls the entire client-vendor cooperation, and SLA regulates specific services within it).
• Specificity (MSA is the foundation for future agreements, and SLA is a document outlining performance goals).
• Timeframe (MSA lasts for the entire duration of the business relationship, and SLA applies only to a particular project).

So, you can use SLA when there is a particular project with clear goals and metrics and MSA if you plan to continuously work with a service provider.

Statement of Work vs Service-Level Agreement

Statement of work (SOW) is a contract between a client and an agency that includes the specifics of each product and the services to be delivered. It usually works as a project agreement and sets expectations. The parties often sign SOW along with MSA.

These are the key elements of SOW:

• Project overview and results to achieve.
• Project stages: the ways each will be completed.
• Deliverables: what is to be produced.
• Deadline.
• Costs: estimates and payment schedule.
• KPI.
• Additional legal sections (if no MSA).

SOW provides in-depth information on deliverables, requirements, standards, and criteria of every project stage. It becomes a “guideline” for the parties to determine what is “in scope” and “out of scope.” That is why a well-structured statement of work prevents conflicts between the parties and makes the outsourcing process safe.

If you plan to hire a QA company, you may request working under a service-level agreement. While SOW regulates the services to provide, SLA assigns metrics to measure them. In this case, the company guarantees high-quality project delivery as a result.

A service-level agreement contains:

• Business objectives to achieve.
• Service deliverables.
• Performance expectations customer sets to the provider.
• Legal effects if the provider doesn`t follow performance standards.
• Pricing terms.

Put simply, SLA helps you to clarify what product you will receive.

EU GDPR

Outsourced software testing is a safe way to keep your project bug-free. It is important for us to deliver high-quality services and protect your data from leakages. QA Madness works under NDA, MSA, and SOW (SLA) agreements. Moreover, we are compliant with the EU General Data Protection Policy (GDPR). It applies to the organizations that offer services and process private information. Per your request, we can sign the GDPR agreement to make sure your data is secure.

To Wrap Up

Ideas are senseless if you don`t give them a chance to live. In other words, a successful business requires ideas to execute. In this case, additional precautions keep your product unique and secure. And that means a lot in a highly competitive market.