Organizations frequently share and process personal data, making compliance with privacy laws a top priority because data was being abused. This led to the need for companies to have Data Processing Agreements (DPA) which is a legally binding contract that governs how personal data is handled between entities, ensuring protection and accountability. Whether you’re a business owner, data controller, or processor, understanding DPAs is essential for safeguarding data and meeting regulatory standards like the General Data Protection Regulation (GDPR). This guide explores key aspects of DPAs, from templates to requirements, to help you navigate this critical compliance tool.

Data Processing Agreement Template

A DPA template provides a standardized starting point for drafting an agreement tailored to your needs. It typically includes sections defining the parties (data controller and processor), the scope and purpose of data processing, obligations of each party, security measures, and terms for data breaches or termination. Templates are widely available online—often from legal firms, software providers, or regulatory bodies like the UK’s Information Commissioner’s Office (ICO)—but must be customized to reflect specific business practices and legal requirements. Using a template saves time, but ensure it aligns with applicable laws, such as GDPR, to avoid gaps in compliance.

Data Processing Agreement (DPA) Template

This Data Processing Agreement (“Agreement”) is entered into between [CONTROLLER COMPANY NAME], a company registered under the laws of [JURISDICTION] with its registered office at [ADDRESS] (“Controller”), and [PROCESSOR COMPANY NAME], a company registered under the laws of [JURISDICTION] with its registered office at [ADDRESS] (“Processor”), collectively referred to as the “Parties.” This Agreement governs the processing of personal data under the General Data Protection Regulation (GDPR) and is effective as of [DATE].

1. Definitions

1.1. “Personal Data” means any information relating to an identified or identifiable natural person as defined by GDPR.
1.2. “Processing” means any operation performed on Personal Data, such as collection, storage, or deletion.
1.3. “Data Subject” means the individual whose Personal Data is processed.
1.4. “GDPR” means Regulation (EU) 2016/679 of the European Parliament and Council.

2. Scope and Purpose

2.1. The Processor shall process Personal Data on behalf of the Controller as described in Annex 1 (Details of Processing).
2.2. This Agreement applies to all Personal Data processed by the Processor under the [MAIN SERVICE AGREEMENT NAME] dated [DATE] (“Service Agreement”).

3. Obligations of the Processor

3.1. The Processor shall process Personal Data only on documented instructions from the Controller, unless required by applicable law.
3.2. The Processor shall ensure that persons authorized to process Personal Data are bound by confidentiality.
3.3. The Processor shall implement appropriate technical and organizational measures to ensure a level of security appropriate to the risk, including [e.g., encryption, access controls].
3.4. The Processor shall assist the Controller in fulfilling obligations related to Data Subject rights (e.g., access, deletion) and data breach notifications under GDPR.

4. Subprocessing

4.1. The Processor shall not engage a subprocessor without prior specific or general written authorization from the Controller.
4.2. Where general authorization is given, the Processor shall inform the Controller of any intended changes, allowing the Controller to object.
4.3. Any subprocessor shall be bound by a written agreement imposing the same data protection obligations as this Agreement.
4.4. The Processor remains fully liable to the Controller for the subprocessor’s performance.

5. Security and Data Breaches

5.1. The Processor shall notify the Controller without undue delay, and no later than [e.g., 48 hours], after becoming aware of a Personal Data breach.
5.2. The Processor shall provide sufficient information to enable the Controller to meet GDPR breach notification obligations.

6. Audits and Inspections

6.1. The Processor shall make available all information necessary to demonstrate compliance with this Agreement.
6.2. The Controller may conduct audits, with [e.g., 30 days] prior notice, to verify compliance, subject to reasonable confidentiality terms.

7. International Data Transfers

7.1. The Processor shall not transfer Personal Data outside the European Economic Area (EEA) without the Controller’s prior written consent.
7.2. Any such transfer shall comply with GDPR, using mechanisms like Standard Contractual Clauses (SCCs) as attached in Annex 2.

8. Term and Termination

8.1. This Agreement shall remain in effect for the duration of the Service Agreement.
8.2. Upon termination, the Processor shall, at the Controller’s choice, delete or return all Personal Data and certify completion, unless retention is required by law.

9. Liability

9.1. Each Party shall be liable for damages caused by Processing that violates this Agreement or GDPR, subject to applicable limitations in the Service Agreement.

10. General Provisions

10.1. This Agreement is governed by the laws of [JURISDICTION].
10.2. Any disputes shall be resolved in the courts of [LOCATION].
10.3. Amendments to this Agreement must be in writing and signed by both Parties.

Signed:
[CONTROLLER COMPANY NAME] __________________________ Date: [DATE]
[PROCESSOR COMPANY NAME] __________________________ Date: [DATE]

Annex 1: Details of Processing

Customize this section based on your companies needs and jurisdiction in which you process data:

– Subject Matter: [e.g., Provision of cloud storage services].
– Duration: [e.g., Duration of the Service Agreement].
– Nature and Purpose: [e.g., Storage and analysis of customer data for marketing].
– Types of Personal Data: [e.g., Names, email addresses, purchase history].
– Categories of Data Subjects: [e.g., Customers, employees].

Annex 2: Standard Contractual Clauses

[Insert applicable SCCs from the European Commission, available at ec.europa.eu, if international transfers apply]

Note: This is a template for illustrative purposes. Remove italicized instructions and customize placeholders (e.g., [COMPANY NAME]) before use. 

If you’d like to use our free template above please follow the following instructions:

1. Copy the entire text above.
2. Remove the italicized explanatory notes (e.g., Note: This is a template…) before publishing.
3. Replace placeholders like [CONTROLLER COMPANY NAME], [DATE], etc., with your specific details.
4. Preview and adjust formatting if needed to match your site’s style and if you have questions or need more help reach out to our team here at CaptainCompliance.com.

This template provides a GDPR-compliant foundation but is generic—tailor it to your business context.

Data Processing Agreement Checklist

Before signing a DPA, a checklist helps ensure all critical elements are covered. Key items to verify include:

• Clear identification of the data controller and processor.
• A detailed description of the data processing activities (e.g., types of data, purposes, duration).
• Security measures to protect data (e.g., encryption, access controls).
• Procedures for handling data breaches, including notification timelines.
• Rights and obligations, such as audits or data subject requests.
• Subprocessor terms, if applicable, and liability clauses.
• Termination conditions and data deletion protocols.

Reviewing these points ensures the DPA is comprehensive and enforceable, reducing risks for all parties.

Data Processing Agreement GDPR

Under the GDPR, a DPA is mandatory whenever a data controller (the entity determining how and why data is processed) engages a data processor (the entity processing data on the controller’s behalf). Article 28 of GDPR outlines specific requirements, mandating that the DPA include the subject matter, duration, nature, and purpose of processing, as well as the types of personal data and categories of data subjects. It must also bind the processor to GDPR obligations, such as implementing technical safeguards and assisting with data subject rights. Non-compliance can lead to hefty fines, making a GDPR-aligned DPA a cornerstone of EU data protection.

Data Processing Agreement ICO

The UK’s Information Commissioner’s Office (ICO) provides guidance on DPAs post-Brexit, aligning with the UK GDPR—a version of the EU regulation adapted for the UK. The ICO emphasizes that DPAs must clearly define responsibilities between controllers and processors, especially for cross-border data transfers. It offers sample clauses and templates on its website (ico.org.uk) to assist organizations in drafting compliant agreements. The ICO also stresses transparency and accountability, encouraging regular reviews of DPAs to ensure they reflect evolving data practices and legal standards.

Data Processing Agreement Requirements

DPAs have specific legal requirements that vary by jurisdiction, but common elements include:

• Scope and Purpose: Define what data is processed and why.
• Processor Obligations: Mandate confidentiality, security, and compliance with instructions.
• Subprocessing: Require controller approval for engaging subprocessors.
• Data Subject Rights: Ensure support for requests like access or deletion.
• Audits and Inspections: Allow the controller to verify compliance.
• Data Transfers: Address international transfers with safeguards like Standard Contractual Clauses.

These requirements protect data subjects and clarify liabilities, making DPAs a critical compliance tool.

Data Processing Agreement Standard Contractual Clauses

Standard Contractual Clauses (SCCs) are pre-approved contractual terms issued by the European Commission to facilitate secure international data transfers under GDPR. In a DPA, SCCs are often incorporated when personal data moves outside the European Economic Area (EEA) to countries without an adequacy decision (e.g., the US post-Privacy Shield). Updated in 2021, SCCs cover controller-to-processor and processor-to-processor transfers, ensuring processors adhere to GDPR-equivalent protections. Including SCCs in a DPA is essential for legal cross-border data flows, with templates available from the European Commission’s website.

Data Processing Agreement Between Processor and Subprocessor

When a processor engages a subprocessor (a third party processing data on the processor’s behalf), a separate DPA is required. This agreement mirrors the controller-processor DPA but focuses on the processor-subprocessor relationship. It must include the same GDPR Article 28 obligations—security, confidentiality, and compliance with the controller’s instructions—while ensuring the controller’s prior approval (general or specific) for subprocessors. The processor remains liable to the controller for the subprocessor’s actions, so the DPA should include indemnification clauses and audit rights to manage risks effectively.

Why DPAs Matter

Data Processing Agreements are more than legal formalities—they’re vital for trust and compliance in data-sharing relationships. They clarify roles, reduce risks of breaches or fines, and ensure accountability across complex data ecosystems involving controllers, processors, and subprocessors. Whether you’re drafting a DPA from a template, aligning with GDPR, or incorporating SCCs, understanding these components helps protect personal data and maintain regulatory compliance.