Vital legal considerations for your business when outsourcing

Cover the data issues

Confidentiality and data protection is a major issue. Client data for instance has a whole level of legal considerations to prepare for. What if there is a data breach or hack What protection and liability has the third party agreed to

In the broader sense, what provision is in the contact for an unforeseen disaster relating to the third party that could dramatically affect your business

Disaster Recovery plans should be discussed in contractual terms. Data can be backed up to the cloud to protect your business for instance.

Changes in service provision also need to be tracked contractually, with renewed contracts agreed and signed. 

Cover all eventualities

Finally here are some important questions which you may not have considered:

Are you happy for the third party you have hired to subcontract the work

Have you considered Arbitration as a route to agree on prior to dispute resolution (this will mean it is a more private process of dispute resolution as opposed to going to court)?

Who will be liable if the client breaks the law on your behalf, in your company name

Fortunately, outsourcing does not usually fall into a legal quagmire and can be a very rewarding business deal for both parties involved but once in a while like a bad marriage an outsourcing relationship collapses into a mess of accusations and threats of legal action.

Its best to think carefully about responsibilities and assets prior to your new business partnership, just in case. 

Richard Forsyth is the PR Manager at Varn MediaContact the professional team at Halebury for legal advice on issues raised in this feature.

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