Draft Transition Services Agreement

Skill: Transition Services Agreement Drafting (Carve-Out)

1. Subject-matter triage (only if applicable)

• Use this skill when the matter is a post-closing carve-out or similar divestiture that requires the seller to keep operating selected functions for a transitional period.
• Identify the operative source set before drafting: the purchase agreement, scoping matrix, shared-services materials, transition memo, and any negotiated points on term, pricing, service levels, and exit assistance.
• If the source set contains multiple service lines, systems, entities, or transition periods, enumerate them first and draft the TSA so each discrete service is captured separately in the exhibit rather than collapsed into a generic bucket.
• If the principal transaction agreement already addresses post-closing services, treat the TSA as subordinate and conform it to that hierarchy.

2. Failure modes the skill is correcting

• The services schedule is left at a high level and omits the actual services, systems, personnel commitments, dependencies, and transition notes reflected in the deal record.
• Fee language is drafted without a clear pricing method tied to each service or service category, creating ambiguity in post-closing invoicing.
• Term and termination language does not permit service-by-service phaseout or partial termination as the buyer migrates functions off the seller’s platform.
• Transition assistance, data return, and offboarding obligations are too thin to support a real operational migration.
• The TSA is not harmonized with the principal transaction agreement, creating conflicting interpretation or priority issues.
• Service levels, downtime handling, and continuity expectations are not tied to practical carve-out operations.
• IP, data, confidentiality, and possession issues are not addressed with enough specificity for a temporary operating arrangement.

3. Legal frameworks / domain conventions that apply

• A TSA is a temporary operational bridge, not a standalone commercial outsourcing deal; draft it to preserve continuity while the buyer stands up independent capabilities.
• The services exhibit is the operative core: it should identify each service category, the provider, the recipient, the scope of work, deliverables or service levels, pricing method, term, dependencies, and transition notes.
• Pricing may vary by service category, and the agreement should state the applicable methodology for each category rather than relying on a single generic fee clause.
• Term provisions should align to the expected transition timeline and permit staged wind-down where operationally necessary.
• Partial termination should be available by service or service package when the buyer no longer needs a function.
• Transition-out assistance should include reasonable cooperation, knowledge transfer, and return or destruction of transition data and materials at the end of the term.
• Confidential information, work product, systems access, and data ownership should be allocated expressly for the transition period.
• The TSA should include an order-of-precedence clause making the principal transaction agreement controlling in the event of conflict.

4. Analytical scaffolds

• Start by extracting every discrete service from the source materials, then map each one to the relevant provider, recipient, system, and business owner.
• For each service, determine the pricing basis, operational assumptions, service level commitments, start and end dates, dependencies, and any special transition notes.
• Check whether the deal record contains agreed exclusions, retained functions, shared personnel limits, or gating milestones that should be reflected in the exhibit.
• Cross-check the TSA against the principal transaction agreement for conflict, overlap, or missing definitions, and conform the TSA where the purchase agreement already governs.
• Draft the exhibit first as a complete operating matrix, then draft the main agreement so the defined terms and mechanics align to the exhibit.
• Build the termination architecture around service-by-service discontinuation, overall term expiry, and end-of-term assistance.
• Include practical administration provisions for invoicing, expense treatment, changes in scope, escalation, service failures, and continuity during outage periods.
• Include data handling and possession mechanics that fit a temporary service relationship and a post-closing migration.

5. Vertical / structural / temporal relationships

• The principal transaction agreement controls over the TSA if there is any inconsistency.
• The exhibit controls the service-specific economics and operational details; the body of the TSA should not restate or dilute exhibit terms.
• Service terms may differ across categories, but the overall agreement term should still track the transition program as a whole.
• Transition assistance should be timed to the end of each service and, where needed, extend briefly beyond operational cutoff to support handoff.
• Partial termination should not defeat ongoing services that remain necessary for the remaining transition period.

6. Output structure conventions

• Produce a single execution-ready TSA with an integrated defined-terms section, standard operative covenants, and a detailed services schedule exhibit.
• Use industry-conventional drafting headings rather than a rubric-shaped checklist.
• The services schedule should be organized by discrete service line, with each entry capturing scope, provider, recipient, pricing method, service term, dependencies, service levels, and transition notes.
• Include standard sections for fees and invoicing, service standards, confidentiality, data return, transition assistance, term and termination, liability allocation if sourced from the record, and conflict hierarchy.
• Draft the exhibit so it can be signed without further narrative explanation.
• Before finishing, confirm the primary deliverable file is the actual agreement, is non-empty, and contains operative clauses and the full schedule exhibit, not a summary of them.