What is a Data Processing Agreement (DPA)?

A Data Processing Agreement (DPA) is a legally binding contract between a data controller and data processor that defines how personal data should be handled, protected, and processed. Under GDPR and other privacy regulations worldwide, DPAs aren’t just recommended, they’re mandatory when third parties process personal data on your behalf.

Why Do You Need a Data Processing Agreement?

Every business that handles personal data through third-party services needs a DPA. Whether you’re using cloud storage, email marketing tools, customer support platforms, or analytics services, these vendors become your “data processors” and must sign a comprehensive DPA to ensure compliance with:

GDPR (General Data Protection Regulation)
CCPA (California Consumer Privacy Act)
LGPD (Brazil’s General Data Protection Law)
Other international privacy laws

What Makes a DPA Legally Compliant?

A proper Data Processing Agreement must include several critical elements:

Core Requirements:

Clear definition of processing purposes and scope
Detailed security measures and data protection protocols
Data breach notification procedures
Data subject rights protection mechanisms
International data transfer safeguards
Sub-processor management rules

Legal Obligations:

Processor can only act on documented instructions
Confidentiality commitments from all personnel
Assistance with data subject requests
Regular compliance audits and reporting
Secure data deletion or return procedures

DPA vs. Privacy Policy vs. Terms of Service: What’s the Difference?

While all three documents address data handling, they serve different purposes:

Privacy Policy: Public-facing document explaining how you collect and use personal data
Terms of Service: General terms governing user relationships with your service
Data Processing Agreement: B2B contract governing how third parties process data on your behalf

Who Needs to Sign a Data Processing Agreement?

Data Controllers (businesses that determine why and how personal data is processed) must have DPAs with:

Cloud hosting providers
Email service providers
CRM and marketing automation platforms
Analytics and tracking services
Payment processors
Customer support tools
HR and payroll systems
Any vendor that accesses personal data

Key Components of an Effective DPA Template

Our comprehensive DPA template covers all essential elements:

Processing Details: Categories of data, purposes, and legal basis
Security Measures: Technical and organizational safeguards
Data Subject Rights: Procedures for access, deletion, and portability requests
International Transfers: Adequacy decisions and Standard Contractual Clauses
Breach Management: Notification timelines and response procedures
Audit Rights: Compliance verification and reporting requirements
Termination Procedures: Data return and deletion protocols

GDPR Penalties for Missing or Inadequate DPAs

Organizations without proper DPAs face severe consequences:

Fines up to €20 million or 4% of annual global turnover
Regulatory investigations and enforcement actions
Business disruption from suspended data processing activities
Reputational damage and loss of customer trust
Legal liability for data breaches and privacy violations

DATA PROCESSING AGREEMENT (DPA) FREE TEMPLATE

Effective Date: [DATE]

Between:

Data Controller: [CONTROLLER NAME]
Data Processor: [PROCESSOR NAME]

1. DEFINITIONS

“Agreement” means this Data Processing Agreement, including all schedules and amendments.

“Controller” means the entity that determines the purposes and means of processing Personal Data.

“Data Subject” means an identified or identifiable natural person whose Personal Data is processed.

“GDPR” means Regulation (EU) 2016/679 (General Data Protection Regulation).

“Personal Data” means any information relating to an identified or identifiable natural person.

“Personal Data Breach” means a breach of security leading to accidental or unlawful destruction, loss, alteration, unauthorized disclosure of, or access to Personal Data.

“Processing” means any operation performed on Personal Data, including collection, recording, organization, structuring, storage, adaptation, retrieval, consultation, use, disclosure, dissemination, restriction, erasure, or destruction.

“Processor” means the entity that processes Personal Data on behalf of the Controller.

“Sub-processor” means any third party engaged by the Processor to process Personal Data.

2. SCOPE AND APPLICATION

2.1 Scope

This Agreement applies to all Processing of Personal Data by Processor on behalf of Controller in connection with the services described in the underlying service agreement (“Main Agreement”).

2.2 Hierarchy

This Agreement supplements the Main Agreement. In case of conflict between this Agreement and the Main Agreement regarding data protection matters, this Agreement prevails.

2.3 Data Protection Laws

Both parties shall comply with applicable data protection laws, including but not limited to GDPR, CCPA, and other relevant regional privacy regulations.

3. DATA PROCESSING DETAILS

3.1 Categories of Data Subjects

[Specify categories, e.g.:]

Employees of Controller
Customers of Controller
Website visitors
[Other categories]

3.2 Categories of Personal Data

[Specify data types, e.g.:]

Contact information (names, email addresses, phone numbers)
Identification data (ID numbers, passport information)
Financial data (payment information, bank details)
Technical data (IP addresses, device information)
[Other categories]

3.3 Special Categories of Personal Data

[If applicable, specify:]

Health data
Biometric data
Racial or ethnic origin data
[Other sensitive categories]

3.4 Processing Activities

[Describe processing activities, e.g.:]

Data storage and hosting
Data analysis and reporting
Customer support services
[Other activities]

3.5 Processing Purposes

Processor shall process Personal Data only for the following purposes:

[Purpose 1]
[Purpose 2]
[Purpose 3]

4. PROCESSOR OBLIGATIONS

4.1 Processing Instructions

Processor shall process Personal Data only on documented instructions from Controller, including this Agreement and any additional written instructions. Processor shall immediately inform Controller if instructions violate applicable data protection law.

4.2 Confidentiality

Processor ensures that persons authorized to process Personal Data have committed themselves to confidentiality or are under appropriate statutory obligations of confidentiality.

4.3 Security Measures

Processor shall implement appropriate technical and organizational measures to ensure security of Personal Data, including:

Pseudonymization and encryption of Personal Data
Ongoing confidentiality, integrity, availability, and resilience of processing systems
Regular testing, assessing, and evaluating effectiveness of technical and organizational measures
Ability to restore availability and access to Personal Data in case of physical or technical incidents

4.4 Sub-processing

Processor shall not engage Sub-processors without prior specific or general written authorization from Controller
Where Controller provides general authorization, Processor shall inform Controller of any intended changes concerning addition or replacement of Sub-processors
Controller may object to such changes within [NUMBER] days of notification

4.5 Data Subject Rights

Processor shall assist Controller in fulfilling obligations to respond to Data Subject requests, including:

Access requests
Rectification requests
Erasure requests (“right to be forgotten”)
Restriction of processing requests
Data portability requests
Objection to processing requests

4.6 Data Protection Impact Assessments

Processor shall assist Controller in carrying out data protection impact assessments where required by applicable law.

4.7 Records of Processing

Processor shall maintain records of all categories of processing activities carried out on behalf of Controller, including:

Name and contact details of Processor and Controller
Categories of processing
Description of technical and organizational security measures

5. DATA TRANSFERS

5.1 International Transfers

If Processor transfers Personal Data outside the European Economic Area, it shall ensure adequate protection through:

European Commission adequacy decisions
Standard Contractual Clauses
Binding Corporate Rules
Other approved transfer mechanisms

5.2 Government Access Requests

Processor shall notify Controller immediately of any legally binding request for disclosure of Personal Data by law enforcement authorities, unless prohibited by law.

6. DATA BREACH NOTIFICATION

6.1 Breach Notification to Controller

Processor shall notify Controller without undue delay after becoming aware of a Personal Data Breach, and in any case within 24 hours. The notification shall include:

Nature of the breach
Categories and approximate number of Data Subjects concerned
Categories and approximate number of Personal Data records concerned
Likely consequences of the breach
Measures taken or proposed to address the breach

6.2 Documentation

Processor shall document all Personal Data Breaches, including facts, effects, and remedial action taken.

7. DELETION AND RETURN OF DATA

7.1 End of Processing

At the end of the provision of services, Processor shall, at Controller’s choice:

Delete all Personal Data and existing copies, or
Return all Personal Data to Controller

7.2 Certification

Processor shall provide written certification that all Personal Data has been deleted or returned as requested.

7.3 Legal Requirements

Processor may retain Personal Data to the extent required by applicable law, provided it ensures ongoing protection of such data.

8. AUDITS AND COMPLIANCE

8.1 Audit Rights

Controller may conduct audits and inspections to verify Processor’s compliance with this Agreement. Such audits shall be:

Conducted during regular business hours
Upon reasonable notice (minimum [NUMBER] days)
At Controller’s expense unless significant non-compliance is found

8.2 Compliance Reporting

Processor shall provide Controller with all information necessary to demonstrate compliance with this Agreement and applicable data protection laws.

9. LIABILITY AND INDEMNIFICATION

9.1 Liability

Each party’s liability under this Agreement shall be subject to the limitation of liability provisions in the Main Agreement, except for:

Intentional misconduct or gross negligence
Violations of data protection laws
Breach of confidentiality obligations

9.2 Indemnification

Processor shall indemnify and hold harmless Controller from any claims, damages, losses, or expenses arising from Processor’s breach of this Agreement or applicable data protection laws.

10. TERM AND TERMINATION

10.1 Term

This Agreement shall remain in effect for the duration of the Main Agreement and any processing of Personal Data thereafter.

10.2 Termination for Breach

Either party may terminate this Agreement immediately upon written notice if the other party materially breaches this Agreement and fails to cure such breach within [NUMBER] days of written notice.

10.3 Survival

Provisions relating to data deletion, confidentiality, liability, and audit rights shall survive termination of this Agreement.

11. GENERAL PROVISIONS

11.1 Governing Law

This Agreement shall be governed by the laws of [JURISDICTION].

11.2 Dispute Resolution

Any disputes arising under this Agreement shall be resolved through [DISPUTE RESOLUTION MECHANISM].

11.3 Amendment

This Agreement may only be amended in writing and signed by both parties.

11.4 Severability

If any provision of this Agreement is held invalid or unenforceable, the remainder shall remain in full force and effect.

11.5 Entire Agreement

This Agreement, together with the Main Agreement, constitutes the entire agreement between the parties regarding data processing.

SIGNATURES

Controller:

Name: _________________________ Title: _________________________ Date: _________________________ Signature: _____________________

Processor: