A DPA outlines obligations between data controllers and processors regarding the handling of personal data under privacy laws. This playbook discusses key terms including processing scope, security measures, and cross-border transfers.
Why This Matters: Proportionate liability clauses control potential financial risk and incentivize proper contract performance while protecting both parties from excessive claims.
Negotiation strategy
If you're the Data Controller:
Negotiate for balanced liability caps and ensure carve-outs for gross negligence. Clearly define indemnification triggers to limit exposure.
If you're the Data Processor:
Advocate for reasonable liability limits and ensure indemnification obligations are specific to avoid broad exposure.
Essential elements
1
Liability Caps
Limits on financial responsibility.
2
Gross Negligence Carve-Outs
Excludes gross negligence from caps.
3
Indemnification Triggers
Events activating indemnification.
Action framework
ACCEPT
Propose edits when liability caps are too high or indemnification triggers are vague.
EDIT
Reject clauses that do not include gross negligence carve-outs.
ADD
Add language for clear indemnification triggers if absent.
PRO TIP
Always ensure liability caps do not apply to gross negligence or willful misconduct.
Example clauses
FAVORABLE
Balanced Liability Clause
"The liability of each party shall be capped at the total contract value, except in cases of gross negligence or willful misconduct."
NEUTRAL
Standard Indemnification Clause
"Each party agrees to indemnify the other for third-party claims arising from breaches of this agreement."
UNFAVORABLE
Uncapped Liability
"The contractor shall be liable for all damages without limitation."
Fallbacks
In high-risk projects, ensure liability caps are proportionate to the potential risk and include specific carve-outs for negligence.
Data Breach Incidents
For data breach incidents, indemnification should cover all associated costs, including legal fees and penalties.
Cross-Border Transactions
In cross-border transactions, consider jurisdictional differences in liability and indemnification laws.
Technology & DataPlaybook Template (Pro both parties )
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