Managed IT Agreement Checklist Before Signing

Key takeaways

Read scope and exclusions, service levels, term and renewal, termination fees and price-change terms first, since they drive most disputes.

Make sure the agreement says you own your data, accounts and Microsoft 365 tenant, and that the provider will hand over credentials and documentation when you leave.

This is general information, not legal advice; have your attorney review any agreement before you sign.

Before you sign a managed IT services agreement, read the scope and exclusions, service levels, term and renewal, termination and early-termination fees, price-change terms, data ownership and exit help, security responsibilities and liability limits. Those clauses decide what you get, what you pay and how you leave. This checklist is general information, not legal advice; your attorney should review any agreement you plan to sign.

Why the agreement matters

Most disagreements between firms and IT providers come back to something written, or not written, in the agreement. A task one side thought was included turns out to be a project. A term renews without notice. An exit takes longer because credentials were never part of the deal.

The FTC's advice to small businesses applies directly: set security expectations in the contract and put them in writing. A provider that resists clear terms is telling you something.

The checklist

Scope and exclusions

• Is there a written list of included services, and does it match what you were told?

• Are exclusions stated, such as projects, hardware, licensing, on-site work and after-hours support?

• How are out-of-scope requests priced and approved before work begins?

Service levels

• Are response times listed by priority and support hours?

• Are they targets or guarantees? Targets describe intent; guarantees usually come with defined remedies such as credits.

• Does a response target mean a first reply or a resolution?

Term and renewal

• How long is the initial term, and is month-to-month offered?

• Does it renew automatically, for how long, and what notice stops renewal?

Termination and early-termination fees

• What notice is required to terminate, and in what form?

• How is any early-termination fee calculated?

• Can either side terminate for cause, such as a serious breach, without the fee?

• Are non-cancellable third-party costs, such as annual software subscriptions, passed through?

Price changes

• Can the provider raise prices during the term, and with how much notice?

• Are pass-through costs from vendors handled separately?

• When does billing start: signing, go-live, or a fixed date?

Data ownership and exit help

• Does the agreement state that you own your data, accounts and Microsoft 365 tenant?

• What transition help does the provider give at exit, and is it included or billed?

• How and when is your data returned or deleted after termination?

Admin credentials and documentation

• Will the provider hand over all admin credentials and documentation at exit?

• Will your firm keep its own top-level admin access throughout?

• Will the provider's access be removed promptly when the relationship ends?

Licensing ownership

• Are Microsoft 365 and other licenses in your name or the provider's?

• If the provider resells licenses, how are they transferred if you leave?

Security responsibilities

• Does the agreement describe who is responsible for what? Microsoft's shared responsibility model leaves customers responsible for their data, accounts and access settings, so it helps to know which of those the provider takes on.

• Are your own obligations stated, such as keeping staff trained or approving security changes?

• How will the provider notify you of an incident affecting your systems?

• Is the provider's access limited to the roles it needs?

Insurance and liability

• What insurance does the provider carry, and will it provide a certificate?

• What is the limitation of liability, and is it tied to fees paid over a period?

• Are there carve-outs from the limit, such as for data breaches or gross negligence?

• Check with your insurance broker how the agreement fits your own coverage.

Subcontractors

• Does the provider use subcontractors or third-party services, and are they disclosed?

• Do the same confidentiality and security terms apply to them?

An example from our own terms

To show what published terms can look like, here is how NexJen's agreement handles a few of these points, as stated on our website. It is a 12-month agreement with no month-to-month option. Early termination requires 30 days' written notice and a fee of 75% of the remaining monthly fees plus any non-cancellable third-party costs. Billing starts on the earlier of go-live or 30 days after the start date. Our response times are targets, not guarantees.

Whether terms like these suit you is a judgment for you and your attorney. The point is that they are written down where you can read them before any conversation.

A worked example

Take a hypothetical 20-person insurance agency reviewing an agreement. Its office manager works through this checklist and finds three gaps: the agreement is silent on credential handover, licenses would be registered to the provider, and the renewal clause requires 90 days' notice. She lists them in one email. The provider agrees to add a handover clause and explains the license transfer process. The agency's attorney reviews the final version before signing.

Common mistakes

• Reading the proposal but not the master agreement it references.

• Treating response targets as guarantees.

• Missing the renewal notice window.

• Not asking how licensing and the Microsoft 365 tenant are owned.

• Skipping attorney review because the agreement looks standard.

How NexJen can help

We publish our pricing and key agreement terms so you can review them early. If you are comparing agreements, we are happy to explain ours plainly and answer questions in writing. For your own contracts, we recommend review by your attorney.

Common questions

Is a 12-month managed IT agreement normal?

Multi-month terms are common because onboarding takes real work up front. What matters is that the term, renewal and exit terms are clear.

What is the difference between an SLA target and a guarantee?

A target is the time a provider aims to respond. A guarantee usually carries a defined remedy, such as a service credit, if missed. Read which one the agreement offers.

Can I negotiate a managed IT agreement?

Often, on points such as handover help or notice periods. Ask in writing and have your attorney review the final version.

Sources

Cybersecurity for small business: Vendor security (Federal Trade Commission)Choosing a managed service provider (MSP) (UK National Cyber Security Centre)Shared responsibility in the cloud (Microsoft Learn)Introduction to granular delegated admin privileges (GDAP) (Microsoft Learn)

Read our terms before you talk to us

Our pricing and agreement terms are published on our website. We are glad to walk through them with you.

Talk with us about managed IT See our pricing and terms

Managed IT Services Agreement Checklist: What to Review Before Signing