How to Create a Data Processing Agreement (DPA)

A Data Processing Agreement (DPA) is a legally binding document that governs the relationship between a data controller and a data processor. It ensures that both parties adhere to data protection regulations, such as the General Data Protection Regulation (GDPR). This article will guide you through the essential clauses required in a DPA and explain each clause in detail.

1. Introduction and Definitions

This clause sets the stage for the entire agreement. It includes definitions for terms like “Data Controller,” “Data Processor,” “Personal Data,” “Processing,” and other relevant terms. Clearly defining these terms ensures both parties have a mutual understanding of the scope and purpose of the agreement. This section should be comprehensive to avoid any ambiguities.

2. Subject Matter and Duration

This clause outlines the specific subject matter of the data processing and the duration for which the data will be processed. It should detail what kind of data is being processed, for what purpose, and for how long. This helps in setting clear boundaries and expectations, ensuring that data is not processed beyond the agreed terms.

3. Nature and Purpose of Processing

Here, you describe the nature and purpose of the data processing activities. This includes specifying the types of data being processed (e.g., customer data, employee data) and the reasons for processing (e.g., for marketing purposes, service provision). This clause ensures that the processing activities are transparent and align with the agreed purposes.

4. Obligations of the Data Processor

This clause outlines the obligations of the data processor. It includes adhering to data protection laws, following the instructions of the data controller, implementing appropriate technical and organizational measures to protect the data, and ensuring the confidentiality of the data. The clause should also address the processor’s responsibility for ensuring that any sub-processors they engage also comply with these obligations.

5. Obligations of the Data Controller

This clause details the obligations of the data controller. It includes ensuring that the data processor has all the necessary information and access required to process the data, providing lawful instructions, and ensuring that the data subject’s rights are upheld. The controller must also ensure that the data processing activities are lawful and compliant with relevant regulations.

6. Security Measures

This clause requires the data processor to implement appropriate technical and organizational measures to ensure the security of the personal data. These measures should protect against unauthorized or unlawful processing, accidental loss, destruction, or damage of data. The clause should specify the types of security measures expected, such as encryption, access controls, and regular security audits.

7. Confidentiality

Confidentiality is a crucial aspect of data processing. This clause mandates that the data processor ensures the confidentiality of the personal data. It includes making sure that only authorized personnel have access to the data and that these personnel are bound by confidentiality obligations. It also covers the obligation to inform the data controller immediately if a breach of confidentiality occurs.

8. Sub-Processing

This clause governs the use of sub-processors by the data processor. It requires the data processor to obtain prior written consent from the data controller before engaging any sub-processors. The clause should also stipulate that the sub-processor must adhere to the same data protection obligations as the data processor and that the data processor remains liable for any breaches by the sub-processor.

9. Data Subject Rights

Data subjects have specific rights under data protection laws, such as the right to access, rectify, and erase their data. This clause ensures that the data processor assists the data controller in fulfilling these rights. It should detail the procedures for handling data subject requests and the timelines for responding to such requests.

10. Data Breach Notification

In the event of a data breach, this clause requires the data processor to notify the data controller without undue delay. The notification should include all relevant information about the breach, including its nature, the affected data, and the measures taken to address it. This clause ensures that both parties can respond promptly to mitigate any potential harm caused by the breach.

11. Data Transfer

This clause addresses the transfer of data outside the European Economic Area (EEA) or other jurisdictions with similar data protection laws. It should specify the conditions under which data transfers can occur and the measures taken to ensure the data remains protected. This might include standard contractual clauses, binding corporate rules, or other mechanisms recognized by data protection authorities.

12. Return or Deletion of Data

Upon termination of the DPA or at the request of the data controller, the data processor must return or delete the personal data. This clause should detail the procedures for returning or deleting the data and the timelines for doing so. It ensures that the data is not retained longer than necessary and is handled appropriately upon the end of the processing relationship.

13. Audits and Inspections

To ensure compliance with the DPA, this clause allows the data controller to conduct audits and inspections of the data processor’s operations. It should outline the conditions under which audits can be performed, the notice period required, and the scope of the audits. This clause ensures that the data processor maintains transparency and accountability in their data processing activities.

14. Indemnity

This clause provides for indemnification in the event of a breach of the DPA. It specifies that the data processor will indemnify the data controller for any losses, damages, or expenses incurred as a result of the processor’s failure to comply with the agreement. This clause protects the data controller from financial liabilities arising from the data processor’s non-compliance.

15. Limitation of Liability

This clause limits the liability of the data processor for breaches of the DPA. It should specify the extent to which the processor can be held liable and any caps on financial liability. This clause balances the need for accountability with the need to protect the data processor from excessive financial risk.

16. Governing Law and Jurisdiction

This clause specifies the governing law and jurisdiction that will apply to the DPA. It ensures that any disputes arising from the agreement will be resolved according to the laws of a specific jurisdiction. This clause provides clarity and predictability for both parties in the event of a legal dispute.

17. Termination

This clause outlines the conditions under which the DPA can be terminated. It should specify the notice period required for termination and any grounds for immediate termination, such as a breach of the agreement. This clause ensures that both parties understand their rights and obligations in the event of termination.

18. Miscellaneous

This clause includes any additional terms that are necessary for the DPA. It might cover issues such as amendments to the agreement, severability of the clauses, and the entire agreement clause. This section ensures that all relevant aspects of the data processing relationship are addressed and that the agreement is comprehensive.

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