Transition Services Agreement (TSA)
The agreement under which the seller provides services to the buyer post-close, and how to scope it to avoid open-ended consulting bills.
- Service scope definition
- Pricing structure (hourly, fixed, hybrid)
- Maximum duration and renewal terms
- Termination rights and notice periods
If this clause already feels aggressive in isolation, upload the full contract and see how it combines with payment terms, liabilities, and exit rights.
Analyze My ContractWhat this clause actually does
A transition services agreement (TSA) is a standalone contract under which the seller provides defined services (IT, accounting, customer relations) to the buyer for a defined period after close. It bridges the gap while the buyer integrates. Pricing, scope, and exit terms are highly negotiated.
Why people get burned by this clause
A vague TSA can become a $20K/month consulting arrangement that runs longer than the original transition timeline. A well-scoped TSA is hourly, capped, and has clear exit triggers.
What should make you slow down
- Open-ended scope (best efforts to support transition)
- No hourly cap or budget ceiling
- Auto-renewal beyond initial period
- Seller indemnification narrower than reps and warranties indemnification
- Termination requires 60+ day notice without cause
Where you usually see it
- Asset purchase agreements (as exhibit)
- Standalone transition services agreements
What the platform checks in the live contract
- Service scope definition
- Pricing structure (hourly, fixed, hybrid)
- Maximum duration and renewal terms
- Termination rights and notice periods
- Indemnification scope
What stronger language usually looks like
- Specific service catalog with defined hours per service
- Hourly billing with monthly cap
- Maximum 6-month duration
- 30-day termination right without cause
- Same indemnification standards as APA
Definitions worth opening next
Articles that go deeper
Scope the TSA tightly with hourly caps and a hard end date. Open-ended TSA arrangements are how the seller stays in your business longer than you wanted.
See how this clause behaves in the real contract.
The clause library gives you judgment. The full review shows how this clause combines with the rest of the agreement, then quotes the exact language, scores the risk, and explains what to push on next.