The Outsourcing Agreement Between Two Companies is a critical commercial contract used when one company wishes to engage another to perform specific business functions or services in Malaysia. This document is essential for businesses looking to optimize operations, reduce costs, or access specialized expertise while ensuring compliance with Malaysian legal requirements. The agreement comprehensively addresses service delivery, performance metrics, risk allocation, and regulatory compliance, particularly concerning data protection, employment, and industry-specific requirements. It is structured to protect both parties' interests while facilitating effective service delivery and business relationship management. The document is particularly relevant in the current business environment where companies increasingly rely on specialized service providers for non-core functions.
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1. Parties: Identification of the service provider and customer, including registered addresses and company registration numbers
2. Background: Context of the agreement, including brief description of the parties' businesses and purpose of the outsourcing arrangement
3. Definitions: Definitions of key terms used throughout the agreement
4. Scope of Services: Detailed description of services to be provided, including any excluded services
5. Term and Renewal: Duration of the agreement and renewal provisions
6. Service Provider's Obligations: Key responsibilities and commitments of the service provider
7. Customer's Obligations: Key responsibilities and commitments of the customer
8. Service Levels: Performance standards, metrics, and measurement methodology
9. Charges and Payment: Pricing, payment terms, invoicing, and related financial provisions
10. Data Protection and Security: Compliance with PDPA 2010 and data security requirements
11. Confidentiality: Protection of confidential information and trade secrets
12. Intellectual Property Rights: Ownership and licensing of IP, including pre-existing and newly created IP
13. Personnel and Resources: Requirements for staff, facilities, and resources
14. Liability and Indemnities: Limitation of liability and indemnification provisions
15. Force Majeure: Provisions for handling events beyond parties' reasonable control
16. Termination: Termination rights, process, and consequences
17. Exit Management: Transition arrangements upon termination
18. General Provisions: Standard boilerplate clauses including notices, assignment, and governing law
1. Change Control: Procedures for managing changes to services or agreement terms. Include if services are likely to evolve significantly
2. Business Continuity: Disaster recovery and business continuity requirements. Essential for critical services
3. Regulatory Compliance: Specific regulatory obligations. Include if operating in regulated industries
4. Anti-Bribery and Corruption: Compliance with anti-corruption laws. Important for high-value or government-related contracts
5. Insurance: Insurance requirements and coverage. Important for high-risk services
6. Environmental Compliance: Environmental protection obligations. Include if services have environmental impact
7. Subcontracting: Rules and restrictions on subcontracting. Include if subcontracting is likely
8. Parent Company Guarantee: Guarantee from service provider's parent company. Include for financial security
1. Schedule 1 - Services Description: Detailed technical and operational specifications of services
2. Schedule 2 - Service Levels and KPIs: Detailed service level requirements, measurement methods, and penalties
3. Schedule 3 - Charges: Detailed pricing structure, rate cards, and payment milestones
4. Schedule 4 - Customer Dependencies: Detailed list of customer-provided resources and requirements
5. Schedule 5 - Governance and Reporting: Management structure, meeting schedule, and reporting requirements
6. Schedule 6 - Security Requirements: Detailed security protocols and compliance requirements
7. Schedule 7 - Exit Plan: Detailed transition and handover procedures
8. Schedule 8 - Approved Subcontractors: List of pre-approved subcontractors if applicable
9. Appendix A - Form of Change Order: Template for documenting and approving changes
10. Appendix B - Key Personnel: List of key staff members and their roles
Relevant legal definitions
Clauses
Relevant Industries
Information Technology
Business Process Outsourcing
Manufacturing
Financial Services
Healthcare
Telecommunications
Logistics
Human Resources
Customer Service
Facilities Management
Relevant Teams
Legal
Procurement
Operations
Finance
Information Technology
Risk and Compliance
Human Resources
Commercial
Project Management
Service Delivery
Relevant Roles
Chief Executive Officer
Chief Operating Officer
Chief Financial Officer
Chief Technology Officer
Head of Legal
Head of Procurement
Commercial Director
Operations Manager
Contract Manager
Risk Manager
Compliance Officer
Project Manager
Service Delivery Manager
Vendor Manager
Legal Counsel
Finance Manager
IT Manager
Human Resources Director
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