A Letter of Intent expresses preliminary terms for a potential transaction, outlining intent before formal contracts. This playbook clarifies binding vs. non-binding provisions and confidentiality obligations.
Why This Matters: Non-compliance with privacy regulations can lead to regulatory fines, reputational damage, and contractual penalties.
Negotiation strategy
If you're the Buyer:
Ensure that the contract includes comprehensive data protection clauses that align with the company's internal policies and regulatory requirements. Negotiate for clear breach notification timelines and responsibilities.
If you're the Seller:
Advocate for reasonable data protection obligations that are proportionate to the services provided. Ensure that liability for data breaches is fairly allocated and that the contractor's compliance capabilities are considered.
Essential elements
1
Data Security Measures
Technical and organizational safeguards.
2
Breach Notification
Timely reporting of data breaches.
3
Compliance with Privacy Frameworks
Adherence to GDPR, CCPA, etc.
Action framework
ACCEPT
Propose edits if the clause lacks specific security measures or breach notification timelines.
EDIT
Reject if the clause imposes unreasonable obligations or lacks enforceability.
ADD
Add language to cover jurisdiction-specific compliance or data subject rights.
PRO TIP
Always ensure that data protection clauses are tailored to the specific data processing activities involved.
Example clauses
FAVORABLE
Robust Data Security Clause
"The parties shall implement and maintain appropriate technical and organizational measures to protect personal data against unauthorized or unlawful processing and against accidental loss, destruction, or damage, ensuring a level of security appropriate to the risk."
NEUTRAL
Standard Breach Notification
"In the event of a data breach, the party experiencing the breach shall notify the other party without undue delay and, where feasible, not later than 72 hours after having become aware of it."
UNFAVORABLE
Lack of Specificity in Compliance
"Each party agrees to comply with applicable data protection laws."
Fallbacks
Cross-Border Data Transfers
When data is transferred across borders, ensure that the contract includes clauses addressing international data transfer mechanisms such as Standard Contractual Clauses or Binding Corporate Rules.
High-Risk Data Processing
For projects involving sensitive data, include enhanced security measures and detailed breach response plans to mitigate potential risks.
Outsourcing Data Processing
When outsourcing data processing, ensure that the contractor is bound by a Data Processing Agreement that specifies their obligations and liabilities.
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