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A statement of work is legally binding, but it is not the final, formal contract signed at the end of the contracting process. It can be thought of as the formal foundation of a final contract.

A statement of work is a legally binding agreement between a client and a vendor that describes the terms and conditions for the execution of a project's scope of work. There's a lot of information to describe in the SOW.

It's also important for both parties to sign off on an SOW before any work begins as this makes it legally binding on both sides. Failure to do so could mean that one party has no legal recourse should things go wrong further down the line.

written SOW will define the scope and Key Performance Indicators (KPIs) for the agreement. These KPIs can then be used as a baseline to determine whether the service provider has met conditions of the SOW.

Both MSAs and SOWs are used in service transaction contracts. The major difference between them is that, while an MSA sets the legal framework for the relationship between contracting parties, an SOW deals with specific projects or transactions.