An outsourcing contract sample is a guide to use when you need to draft an agreement to contract out a particular function within your business. Outsourcing is a practice becoming more and more common, and the term is familiar to most employees of private and public entities.
When a function is outsourced, that means the work related to that particular task or field is handed off to an outside company that specializes in that particular arena. Outsourcing reduces costs, but it also saves time. A specialized contractor can usually do the work more efficiently and accurately.
Some examples of commonly outsourced fields are:
An outsourcing services agreement is a legal document that requires all the parties to follow the rules set out in the business relationship. Such an agreement reduces the risk of fraud and helps ensure that the work gets done on time.
It's important to have the agreement in writing. Verbal agreements are unreliable unless the parties do business often and are very close with a great deal of trust between them. Another advantage of written agreements is that they make it easier to avoid ambiguities and disagreements that make the environment less pleasant for employees.
The contents of an outsourcing agreement will vary based on the needs of the parties. Some factors could be:
These components are common to most outsourcing contracts:
Putting together an outsourcing agreement is a task for the board of directors or an attorney. A lawyer can watch for any legal problems in the language to minimize the risks of conflicts later. Though risks can never be eliminated completely, it's wise to have the agreement reviewed by someone who specializes in creating contracts. Including all the right terms and conditions reduces the risk of fraud and improves efficiency.
Either party can be guilty of negligence. The specific language in the agreement is important because a client can refuse to pay for work that isn't done to satisfaction. Likewise, contractors can delay finishing a job or produce a substandard product if they don't have a clear blueprint to work from.
As the business world gets smaller thanks to the internet, your contracts may need to involve the contract law of multiple countries. Different jurisdictions allow for different levels of protection for confidential information and other matters. Intellectual property (IP) is another area for special consideration.
You may need to seek IP rights in other countries before you can hire contractors there. Professional advice is imperative in these situations. A template found online won't be sufficient to protect your best interests.
Vested outsourcing is a new trend that allows a company to outsource functions and work more closely with the contractors. The approach is collaborative and based on performance. The interests of the parties are aligned so that each is more invested in the success of the other.
The pricing model in a vested outsourcing arrangement should provide incentives for reducing costs and trading resources. Confusion often arises about the different types of vested outsourcing due to a lack of consistency in terms.
If you need help with finding a sample outsourcing contract, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.