An Outsourcing Agreement Between Two Companies is a comprehensive legal document used when one business entity wishes to delegate specific functions or operations to another company. This agreement, governed by the laws of England and Wales, establishes the framework for service delivery, performance standards, and commercial terms. It addresses critical aspects such as data protection, intellectual property rights, employee transfers under TUPE, and risk allocation. The agreement is particularly important in today's business environment where companies increasingly focus on core competencies while outsourcing supporting functions to specialized service providers.
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1. Parties: Identifies and defines the contracting parties, including registered addresses and company numbers
2. Background/Recitals: Sets out the context and purpose of the agreement
3. Definitions and Interpretation: Defines key terms used throughout the agreement and interpretation rules
4. Services: Detailed description of services to be provided, including scope and service levels
5. Term and Termination: Duration of agreement and circumstances for termination
6. Charges and Payment: Pricing, payment terms, and invoicing arrangements
7. Service Levels and Performance: Performance standards, KPIs, and measurement criteria
8. Data Protection and Security: Obligations regarding data handling and security measures
9. Confidentiality: Protection of confidential information
10. Liability and Indemnities: Allocation of risks and limitations of liability
1. TUPE Provisions: Required when staff transfer is involved - used when employees may transfer between parties
2. Anti-Bribery Compliance: Compliance with anti-corruption laws - used for international services or high-risk sectors
3. Change Control: Process for managing changes to services - used for complex or long-term arrangements
4. Force Majeure: Provisions for unforeseeable circumstances - used when service delivery might be affected by external events
5. Step-In Rights: Right to take over services - used for critical services or regulated industries
1. Service Description Schedule: Detailed specification of services
2. Service Levels Schedule: Detailed performance metrics and measurement methods
3. Pricing Schedule: Detailed pricing structure and calculations
4. TUPE Information Schedule: Details of transferring employees if applicable
5. Data Processing Agreement Schedule: Detailed data protection obligations and procedures
6. Business Continuity Plan Schedule: Disaster recovery and service continuity procedures
7. Exit Plan Schedule: Procedures for service transition at contract end
8. Governance Structure Schedule: Management and escalation procedures
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