Outsourcing Services Contract in India

Outsourcing Agreement is a legally binding document between a business and a service provider. The service provider delivers IT services, data processing and information management services and more with the help of its own staff and equipment. An outsourcing services agreement in India is drafted to pen down the responsibilities of both the parties, tasks to be delivered, goals, payment breakup, etc. Looking for best lawyers to draft an outsourcing contract in Delhi? Contact Feelium E-contract, one-stop digital destination for all your agreement requirements.

This blog talks about the types of outsourcing services contract in India and major clauses to include in the agreement.

Types of Outsourcing Contracts

Time & Material Outsourcing Contract

This model is used for a long-term software development project and the estimated time and cost cannot be predetermined. It works on the basis of IT services or product required and the time taken to complete it. This contract is very flexible because it ends only when the client is satisfied with the final delivery.

Fixed Price Outsourcing Contracts

Fixed Price Outsourcing Contracts are commonly used for IT outsourcing services. It’s a well-managed project in which the requirements are clearly mentioned in the RFP along with the estimated costs. As the name signifies, clients need to pay a fixed amount for a particular service. The fixed cost outsourcing agreement minimizes flexibility or any involvement in the project scope.

Dedicated Team Outsourcing Agreement

This contract is drafted when you hire a dedicated team for outsourcing and are allocated to work on a specific project. The outsourcing agreement includes the tasks to be done by the team and goals to be achieved. You can choose various engagement models to build and collaborate with the team for a seamless communication.

Major Components of an Outsourcing Contract in India

Detailed Project Scope

This clause includes the service requirements and response the outsourcing company sent while bidding. Ensure that the final scope of the project and services is mentioned clearly for the offshore teams to understand.

Asset Transfer Info

Various IT assets are transferred to the clients by the service providers. It may include telecommunication equipment, computer hardware, leases on equipment, software licenses, etc. Make sure your contract clearly mentions all the transferring costs.

Cost and Payment Structure

The pricing of the outsourcing arrangement, mode of payment, and the payment structure should be clearly mentioned in any outsourcing contract. It should also lay down the amount to be paid along with its break-up. Any re-negotiation of the costs in a said period of time must be mentioned in the contract.

Dispute Resolution Section

Disputes may arise between the parties due to various reasons. Hence, any third-party or an arbitrator assigned to resolve the dispute must be mentioned in the contract.

Exit Strategy

This part covers following questions related to the termination process of an outsourcing agreement:

How do you terminate the outsourcing relation?

Would it hurt your business?

Will you still have complete control over the software?

Ownership of Product

Every company wishes to take the ownership of the intellectual property and the final product. However, in some legal binding outsourcing contracts in India, vendors and the company outsourcing IT services share the ownership. The ownership rights should be clearly mentioned by the company to avoid future disputes.

It is important to include the main clauses in your outsourcing contract to avoid any type of misunderstanding or missing out of information. So if you are looking for outsourcing services in delhi, outsourcing agreements in mumbai, outsourcing contracts in kolkata, outsourcing service agreements in ahmedabad, legal binding outsourcing agreement in pune, it services outsourcing agreement in hyderbad, outsourcing agreements in chennai; you can talk to our certified lawyers. Feelium E-contract offers lawyer drafted Outsourcing Agreement Template that can be customized as per your requirement. You can edit, sign and share Authentic Outsourcing Agreement Templates with the clients digitally in a few clicks.