Executive Summary
When engaging processors to handle personal data, contractual agreements allocate responsibilities and provide compliance assurance. A well-drafted Data Processing Agreement protects the Data Fiduciary, ensures processor compliance, and demonstrates accountability. This guide addresses key provisions and drafting considerations.
Key Takeaways
- 1Define processing scope precisely including data categories, purposes, and duration
- 2Include all mandatory provisions required by DPDPA
- 3Address security, confidentiality, and breach notification comprehensively
- 4Establish oversight mechanisms including audit rights
- 5Plan for termination including data return and deletion
1Purpose of the Data Processing Agreement
The DPA serves multiple functions: it defines the processing relationship, flows down compliance obligations, establishes accountability, and provides remedies if things go wrong. A good DPA protects both parties while enabling the business relationship to function.
2Defining Processing Scope
Precision in scope definition prevents disputes and demonstrates compliance.
Data Categories
Specify what personal data will be processed. List categories rather than generic references to 'personal data'.
Data Subjects
Identify whose data will be processed. Customers, employees, website visitors, etc.
Processing Purposes
Define the purposes for which data will be processed. The processor should be limited to specified purposes.
Processing Operations
Describe what the processor will actually do with the data. Collection, storage, analysis, transfer, etc.
Duration
Specify the processing duration, typically aligned with the service term plus post-termination wind-down.
3Processor Obligations
Core provisions establish what the processor must and must not do.
Instructions Compliance
Require processing only on documented instructions from the controller. Prohibit processing for the processor's own purposes.
Confidentiality
Impose confidentiality obligations on the processor and its personnel. Require appropriate confidentiality commitments from staff.
Security Measures
Specify required security measures. Reference specific standards (ISO 27001, SOC 2) or detail required controls.
Personnel
Require authorised personnel only, appropriate training, and confidentiality commitments.
Subprocessor Controls
Address whether and under what conditions subprocessors may be engaged. Require notice, consent, and flow-down obligations.
4Breach Notification
Breach provisions ensure timely information flow enabling compliance.
Notification Trigger
Define what triggers notification. Any breach affecting controller data, not just major incidents.
Notification Timeline
Specify notification timeline. Should enable controller to meet its own notification obligations.
Information Content
List information the notification must include: nature of breach, data affected, likely consequences, measures taken.
Cooperation
Require cooperation with investigation and remediation. The processor should assist the controller in meeting obligations.
5Rights Assistance
The processor must assist in responding to Data Principal rights.
Request Handling
Define how requests received by the processor will be handled. Forward to controller or respond as directed.
Information Provision
Require the processor to provide information needed to respond to access requests.
Deletion Support
Require capability to delete specific data upon controller instruction to support erasure requests.
Timeline Compliance
Ensure processor response timelines enable controller to meet regulatory deadlines.
6Audit and Oversight
Audit rights enable verification of processor compliance.
Audit Rights
Reserve the right to audit processor compliance. Define scope, notice requirements, and frequency limitations.
Audit Methods
Specify acceptable audit methods: on-site inspection, document review, third-party audit, or certification reliance.
Information Rights
Require provision of information necessary to demonstrate compliance upon request.
Cooperation
Require cooperation with audits and prompt remediation of identified issues.
7Cross-Border Transfers
If data will be transferred internationally, address transfer compliance.
Transfer Restrictions
Prohibit transfers except to permitted destinations or with controller approval.
Transfer Mechanisms
Specify required transfer mechanisms such as standard contractual clauses.
Subprocessor Locations
Disclose subprocessor locations and require consent for new foreign subprocessors.
8Termination Provisions
Plan for relationship end from the beginning.
Data Return
Require data return in usable format upon termination. Specify format and timeline.
Data Deletion
Require deletion of all data after return (or instead of return if preferred). Obtain deletion certification.
Survival
Specify which obligations survive termination, typically confidentiality, audit rights for historical period, and cooperation.
Transition Assistance
Require reasonable assistance in transitioning to replacement processor.
9Liability and Indemnification
Allocate risk appropriately between parties.
Liability Caps
Consider whether and how to cap liability. Caps for data protection breaches may be inappropriate given potential regulatory penalties.
Indemnification
Consider indemnification for losses resulting from processor non-compliance. Define trigger, scope, and procedure.
Insurance
Consider requiring appropriate insurance coverage for data protection liabilities.