Executive Focus: Microsoft Agreement Hierarchy

Microsoft relies on a set of linked agreements that taken together establish an organization’s licensing and pricing rights, obligations, and commitment. The risk to customers is that some agreements in the chain can be modified by Microsoft at will, which can financially impact customers unless customers take steps to mitigate those impacts through amendments.

The following agreements are presented in order of precedence used to resolve conflicts between the agreements; however, the terms in any organization’s agreements could affect this precedence. Notice that the customer-negotiated agreements (and most importantly, the associated amendments to those agreements) generally take precedence over Microsoft’s generic Product Terms and Online Service Terms.

Customer Negotiated Parts

Master Business Service Agreement (MBSA) is an evergreen document that has no set termination date. It records numerous terms and conditions that apply to a customer’s Enterprise Agreement and other contracts, such as product support and consulting contracts. The MBSA covers important topics, such as ownership, rights, restrictions, privacy, warranty (or lack of warranty), limits of liability, verifying compliance, termination, and applicable law and dispute resolution. An MBSA does not commit a customer to make any purchases, but it is a precondition for entering into other agreements. Microsoft typically resists modifying the text of an MBSA, except for very large customers, although customers can address specific requirements through amendments.