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An Outsourcing Agreement lets a company transfer specific business functions or services to another company, setting clear rules for how that work gets done. In the Philippines, these contracts commonly cover IT services, customer support, and back-office operations, following guidelines set by the Department of Trade and Industry.

The agreement spells out key details like service standards, confidentiality requirements, and data privacy protections under Philippine law. It also defines payment terms, performance metrics, and what happens if either party needs to end the relationship. Filipino companies must ensure these agreements comply with local labor laws and the Data Privacy Act, especially when handling sensitive information.

Use an Outsourcing Agreement when your company needs to delegate specific business functions to external providers in the Philippines. This is especially important for IT services, customer support operations, or manufacturing processes where you need to maintain quality control while reducing operational costs.

The agreement becomes essential when handling sensitive customer data, managing large-scale operations, or working with multiple service providers. Filipino businesses must put these agreements in place before any service transition begins, particularly when operations involve personal data processing under the Data Privacy Act, or when working with BPO providers regulated by PEZA.

• Outsourcing Agreement Between Two Companies: Basic framework for any business process outsourcing arrangement, covering general terms and conditions
• Software Development Outsourcing Agreement: Specialized for IT projects, including intellectual property rights and code ownership provisions
• Agreement For Outsourcing Call Center Support: Focused on customer service metrics, call handling standards, and data security
• Data Outsourcing Agreement: Emphasizes data privacy compliance and security measures under Philippine law
• Software Development Outsourcing Contract: Detailed version for complex software projects with milestone-based deliverables

• Client Companies: Philippine businesses that outsource their operations, including major corporations, SMEs, and startups looking to reduce costs or access specialized expertise
• BPO Service Providers: Companies offering outsourced services, particularly in IT, customer support, or back-office operations registered with PEZA
• Legal Departments: In-house lawyers and compliance officers who draft and review Outsourcing Agreements to ensure regulatory compliance
• Data Protection Officers: Professionals responsible for ensuring agreements meet Philippine Data Privacy Act requirements
• External Legal Counsel: Law firms specializing in corporate and technology law who advise on complex outsourcing arrangements

• Scope Definition: List all services to be outsourced, including specific deliverables, timelines, and performance metrics
• Provider Details: Gather the service provider's legal name, registration details, and PEZA certification if applicable
• Data Handling: Document data types being processed and required security measures under Philippine privacy laws
• Service Levels: Define measurable performance standards, reporting requirements, and quality benchmarks
• Cost Structure: Detail payment terms, currency, tax implications, and any performance-based incentives
• Exit Strategy: Plan transition procedures, data return protocols, and intellectual property ownership terms

• Party Details: Complete legal names, addresses, and authorized representatives of both client and service provider
• Service Scope: Detailed description of outsourced services, deliverables, and performance standards
• Data Protection: Compliance measures with the Data Privacy Act, including data handling protocols and security requirements
• Confidentiality: Terms protecting business secrets, customer information, and proprietary processes
• Term and Termination: Contract duration, renewal options, and conditions for ending the agreement
• Dispute Resolution: Philippine law as governing law, preferred venue for disputes, and arbitration procedures
• Payment Terms: Fee structure, payment schedule, and currency specifications following BSP regulations

An Outsourcing Agreement differs significantly from an Agency Agreement, though both involve third-party services. While outsourcing focuses on transferring specific business functions to external providers, agency relationships create legal authority for one party to act on behalf of another.

• Scope of Authority: Agency Agreements grant legal power to represent the principal, while Outsourcing Agreements only allow the provider to perform specific operational tasks
• Legal Liability: In agency relationships, the principal can be directly liable for the agent's actions. Outsourcing providers bear their own liability for service delivery
• Control Level: Agencies must follow strict principal directions, while outsourcing providers have more operational autonomy within agreed service parameters
• Regulatory Framework: Agency relationships fall under the Civil Code of the Philippines, while outsourcing often involves additional regulations like PEZA rules and data privacy laws