What Should Be in Your Statement of Work? A Business Owner’s Checklist

Executive Summary: A statement of work is one of the most important documents in any business contract, but it’s also one of the most overlooked. A clear, consistent SOW can reduce risk, prevent disputes, and save you time and money down the road. If your business uses SOWs for services, software, or deliverables, take the time to get it right.

Most companies treat the statement of work (SOW) as an afterthought. The master service agreement (MSA) gets all the legal attention, and the SOW is treated like a project memo. But here’s the reality: the SOW is where most legal fights start. And if it’s not clear and consistent, it could be the reason you end up in court.

What Is a Statement of Work?

A statement of work is a document that details what work will be done, how it will be delivered, and what each party is responsible for. It’s typically attached to a broader master agreement and used for specific projects. While the MSA lays out the legal terms of the relationship, the SOW spells out the work.

Companies may sign one MSA but have many different SOWs over the course of the relationship. And because it looks like a simple project outline, it often gets rushed, copied and pasted from the other side, or handed off to someone without legal review. That’s where mistakes happen.

Why It Matters More Than You Think

An unclear or inconsistent SOW opens the door to misunderstandings, missed expectations, payment disputes, and even litigation. The SOW governs how the contract plays out in real life. If the deliverables, deadlines, scope, or acceptance criteria are vague or poorly written, both parties will interpret things differently. And that’s a problem.

In many cases, the SOW ends up carrying more weight in a dispute than the MSA. Judges, arbitrators, and opposing counsel will refer directly to the SOW to determine what was agreed upon. If it’s sloppy, unclear, or contradicts the master agreement, you’re at risk.

Common Mistakes to Avoid

• Misaligned documents: A surprising number of SOWs contradict the MSA they’re attached to. This occurs when different people draft them or someone reuses a document without verifying its consistency.

• Missing scope details: Vague terms like “support,” “detailed,” or “as needed” leave too much room for interpretation. Define exactly what work will be done, who is doing it, and what completion looks like.

• No acceptance criteria: If the agreement doesn’t specify when or how deliverables will be reviewed and accepted, you may be left waiting for approval that never comes.

• Assumptions and dependencies not stated: Always make it clear what you’re relying on the other party to provide, and what happens if they don’t.

• Legal terms in the wrong place: Keep indemnification, warranties, and other legal clauses in the MSA, unless there’s a good reason to include them in the SOW.

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Issues to Address Before Signing

Use a checklist to avoid common pitfalls:

• Confirm the project scope, deliverables, timelines, and payment terms.

• Ensure pricing is transparent and accurately reflects the work.

• Spell out shipping, testing, completion, and acceptance criteria.

• Avoid legal terms in the SOW unless previously discussed with legal counsel.

• Identify subcontractors and any key personnel.

• Consider change of control language if the counterparty could be acquired.

• Don’t reuse the other party’s form without review since it’s likely to favor them.

• Don’t bind yourself to vague obligations or agreements to agree later.

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Pro Tip: Don’t DIY with ChatGPT

Yes, AI can help draft a basic SOW. But if you’re dealing with a project that impacts your business’s time, money, or risk, don’t leave it to a chatbot. AI doesn’t know your master agreement, your priorities, or your risks. We often see clients using AI-generated documents that contradict their MSAs or are entirely unenforceable.

Having a lawyer review your SOW may feel like overkill until it prevents a lawsuit.

At Temple Law, PLLC, we help businesses protect themselves by reviewing or drafting SOWs that match their MSAs and reflect their actual deal. Reach out if you want clear, enforceable contracts that reduce friction and protect your bottom line.