Data Protection Agreements: Contract Review Tips


  • Ensure basic data security measures and encryption standards are in place.
  • Make sure you’re aligned with internal stakeholders, such as compliance, IT, and cybersecurity.
  • Clearly define data ownership, monitoring, and also destruction of data post service completion.

Data Protection Agreements: Contract Review Tips by Akshay Verma

When you review data protection agreements (DPAs), you’re doing more than just going through paperwork—you’re protecting your business from serious risks. A DPA outlines the terms and conditions for handling personal data between your organization and third parties, covering key aspects like data processing, storage, transfer, and security measures. It’s crucial to ensure these agreements comply with relevant regulations and protect your organization’s interests. 

During your review of DPAs, focus on understanding the key terms and verifying their alignment with regulatory standards. This article provides eight contract review tips for DPAs. 

1. Ensure data security measures are in place

When reviewing DPAs, check data security measures to ensure they shield sensitive data effectively. Assess encryption standards and access controls thoroughly. Insist on regular, independent security audits to identify vulnerabilities and guarantee compliance. 

For example, the DPA might mandate annual security audits conducted by an independent firm, covering aspects such as encryption protocols, access controls, and vulnerability testing. You may negotiate more frequent audits, such as biannual reviews, or adjust the scope to include specific checks relevant to your organization’s needs.

Also, define the frequency and scope of these audits clearly, ensuring they are performed by neutral parties. Finally, share the results with all stakeholders to maintain transparency and facilitate corrective measures.

This proactive approach not only secures data but also builds trust through transparency.

2. Align with your compliance department

Before you start the review process, align with your compliance department to conduct a thorough and effective DPA review. Discuss your organization’s key compliance priorities to identify non-negotiable clauses and areas of flexibility. 

Ensure the DPA aligns with relevant regulations, such as GDPR, CCPA, or industry-specific standards. Scrutinize clauses related to data retention, transfer mechanisms, and breach notification protocols, ensuring they meet legal and organizational standards. Consider the operational impact of these clauses, ensuring they don’t impede business functions or conflict with internal policies. 

This alignment streamlines the review, minimizes risks, and maintains a consistent approach to regulatory obligations, supporting your organization’s legal responsibilities and business goals.

3. Define the purpose for data use

Ensure the DPA clearly defines the purposes for which data can be used, outlining specific activities like analytics, marketing, or service provision. Scrutinize any clauses allowing for data usage extensions, ensuring they include mechanisms for obtaining explicit consent from data subjects.

For example, the DPA might permit extending data use to marketing, provided explicit consent is obtained through a double opt-in process, with mechanisms to record and store this consent.

Verify that the DPA imposes strict controls to prevent unauthorized data usage. Establish processes for monitoring usage, reviewing adherence to agreed terms, and implementing corrective measures if violations occur. Ensure provisions are in place to revoke consent as needed, particularly for extensions beyond the initial purpose.

4. Clarify data ownership and monitoring

Clearly define ownership rights, specifying which party owns the data and how these rights interact with regulations like GDPR or CCPA.

Ensure data portability rights are addressed, including procedures for responding to data subject requests to access, amend, or transfer data. For example, the DPA might specify that requests are fulfilled within 30 days. You might negotiate this down to 10-15 days if you are the processor or higher to 45-60 days if you are the controller..

Ensure processes for data deletion are defined clearly, particularly for data subjects’ right to be forgotten, including timelines and verification steps.

5. Evaluate data breach response protocols

Evaluate the established protocols for responding to data breaches. Confirm that the agreement includes prompt notification requirements and check if the standard notification timeline meets your needs or if more stringent timelines are justified based on data sensitivity.

For example, while the standard notification timeline might be within 72 hours of discovering a breach, controllers might negotiate this down to 24-48 hours based on internal requirements or the sensitivity of the data involved. These negotiations ensure that response times are swift, minimizing damage and maintaining trust with all stakeholders.

6. Verify compliance with laws and standards

Verifying that your data agreements comply with relevant data protection laws and standards is a critical step. Start by reviewing provisions to ensure compliance with applicable regulations, such as GDPR, CCPA, or HIPAA. This includes ensuring clauses address key elements like data processing, retention, and transfer mechanisms, in alignment with these regulations.

Next, review the agreement’s provisions for regular audits and assessments to ensure ongoing compliance. Clarify how these audits assess adherence to applicable laws and standards, covering aspects such as data subject rights, breach notification protocols, and data security measures.

For example, the DPA might specify quarterly assessments to verify compliance with GDPR requirements, including checks on data portability rights, consent mechanisms, and timely breach notifications. You may negotiate for more comprehensive assessments or different frequencies based on your organization’s needs and the complexity of the regulations.

7. Ensure data destruction post service completion

Review the terms related to data return and destruction at service completion or contract termination. Ensure these terms are precise and meet both parties’ capabilities and requirements to prevent data mishandling or unauthorized retention.

Make sure these terms are not only precise but also realistic, reflecting what both parties can practically implement. Assess whether the stipulated processes are adequate to protect sensitive information and comply with applicable data protection laws. 

Properly defined terms ensure that all data is handled securely and is either returned or destroyed in accordance with the agreed-upon procedures, safeguarding both you and your vendor from potential data breaches.

8. Use AI for efficient DPA reviews

Using an AI review tool can be incredibly effective for quickly spotting potential issues in DPAs and other types of agreements. It can flag clauses that may require further scrutiny and ensure compliance with your specific guidelines.

By using an AI contract review tool plus the contract review tips above, we calculated that it is possible to save more than 15 hours a week for contract reviews in general. 

Reviewing DPAs is more than a routine task—it’s our line of defense in a world where data is both valuable and vulnerable. So, keep pushing for precision, clarity, and a bit of tenacity in every agreement you review. This is not just about compliance—it’s about maintaining a standard that protects and enhances the value of your organization.

About the Author

More Articles

About the Author

Leave a Reply

Your email address will not be published. Required fields are marked *

For security, use of Google's reCAPTCHA service is required which is subject to the Google Privacy Policy and Terms of Use.

I agree to these terms.

Related Articles

Most Recent

Follow Contract Nerds

© 2022 Contract Nerds United, LLC. All rights reserved.
The opinions expressed throughout this website are not intended to provide legal advice or create an attorney-client relationship.

Subscribe to our weekly newsletter!
By subscribing to our newsletter, you agree to our Terms of Use and Privacy Policy. We promise not to spam you!
Contract Nerds Logo

Download PDF

[download id='9545']