Outsourcing Agreement Template for the UK
Generate a bespoke document
What is an Outsourcing Agreement?
An Outsourcing Agreement sets out the terms when a business hands over specific tasks or services to another company. It's the key contract that governs everything from IT support and payroll processing to manufacturing and customer service operations, laying out exactly what each party must deliver.
Under English law, these agreements need clear performance standards, data protection commitments, and service levels. They typically include provisions for staff transfers under TUPE regulations, confidentiality safeguards, and detailed exit arrangements to ensure smooth transitions when the contract ends. Good agreements also build in flexibility for changing business needs while protecting both parties' interests.
Sample clauses: standard wording in a UK outsourcing agreement
8. Service Levels and Service Credits
8.1 The Supplier shall perform the Services so as to meet or exceed each Service Level set out in Schedule [2], measured over each [calendar month] and reported to the Customer within [10] Business Days of the end of the measurement period.
8.2 If the Supplier fails to meet a Service Level, the Customer may claim the corresponding service credit calculated in accordance with Schedule [2], provided that the aggregate service credits accruing in any Contract Year shall not exceed [15]% of the Charges payable in that Contract Year.
8.3 Service credits are a price adjustment reflecting reduced value received and are not a penalty, and, save where expressly stated to be an exclusive remedy, do not limit the Customer's right to claim damages or to terminate for material breach.
8.4 Where the Supplier fails to meet the same Service Level in [three] consecutive measurement periods, the Supplier shall, at its own cost, produce a rectification plan within [10] Business Days and the Customer may terminate the affected Service on [30] days' written notice.
14. Employees and TUPE
14.1 The parties acknowledge that the commencement of the Services may constitute a relevant transfer under the Transfer of Undertakings (Protection of Employment) Regulations 2006, such that the contracts of employment of the Transferring Employees listed in Schedule [4] transfer to the Supplier on the Commencement Date.
14.2 The Customer shall indemnify the Supplier against all liabilities arising from any act or omission of the Customer in relation to the Transferring Employees before the Commencement Date, and the Supplier shall indemnify the Customer against all liabilities arising from its own acts or omissions on or after that date.
14.3 Each party shall provide the other with the employee liability information required by regulation 11 of those Regulations, and such further information as is reasonably requested, within [14] days of a written request.
14.4 On expiry or termination of this Agreement, the Supplier shall co-operate with the Customer and any Replacement Supplier to give effect to any relevant transfer of the Supplier's personnel assigned to the Services, and clause 14.2 shall apply with the necessary changes.
Illustrative extract showing typical drafting under the law of England and Wales. Documents generated with GenieAI are tailored to your rules, standards and context.
Frequently Asked Questions
When should you use an Outsourcing Agreement?
Use an Outsourcing Agreement when your business needs to delegate core functions to external providers while maintaining control and quality. This applies when outsourcing IT services, customer support operations, manufacturing processes, or back-office functions to specialized vendors in the UK market.
The agreement becomes essential before any service handover begins, particularly when dealing with sensitive data, critical business processes, or situations covered by UK data protection laws. It's crucial for protecting intellectual property, ensuring service levels, and establishing clear accountability. Many businesses implement these agreements when scaling operations or focusing on core competencies while managing costs effectively.
What are the different types of Outsourcing Agreement?
- Software Development Outsourcing Contract: Focuses on technical deliverables, IP rights, and code ownership
- Outsourcing Service Level Agreement: Details performance metrics, response times, and quality standards
- Agreement For Outsourcing Call Center Support: Covers customer service standards, call handling, and data protection
- Hr Outsourcing Contract Agreement: Addresses payroll, recruitment, and HR compliance services
- Outsourcing Contract Agreement: General framework for any business function outsourcing
Who should typically use an Outsourcing Agreement?
- Client Organizations: Companies outsourcing their business functions, typically mid to large enterprises seeking specialized services or cost efficiencies
- Service Providers: Specialist companies or contractors delivering outsourced services, from IT firms to call centers
- Legal Teams: In-house counsel and external solicitors who draft and review agreements to ensure compliance with UK regulations
- Project Managers: Oversee implementation and monitor service delivery against agreed standards
- Data Protection Officers: Ensure compliance with UK GDPR when personal data processing is involved
- HR Directors: Handle staff transfers under TUPE regulations and manage workforce implications
How do you write an Outsourcing Agreement?
- Scope Definition: List all services to be outsourced, including specific deliverables, timelines, and quality standards
- Provider Details: Gather full company information, certifications, and track record of the service provider
- Cost Structure: Document pricing, payment terms, and any performance-linked incentives or penalties
- Service Levels: Define measurable performance metrics, reporting requirements, and review periods
- Data Protection: Map out data flows, security requirements, and GDPR compliance measures
- Exit Strategy: Plan transition arrangements, notice periods, and handover procedures
- TUPE Impact: Assess if staff transfers apply and gather relevant employment details
What should be included in an Outsourcing Agreement?
- Parties and Services: Clear identification of contracting parties and detailed scope of outsourced services
- Service Levels: Specific performance metrics, quality standards, and measurement methods
- Payment Terms: Pricing structure, payment schedules, and any performance-related adjustments
- Data Protection: GDPR compliance measures, data handling procedures, and security requirements
- TUPE Provisions: Staff transfer arrangements and employment protection measures
- Intellectual Property: Ownership rights, licenses, and usage permissions
- Termination Rights: Exit conditions, notice periods, and transition arrangements
- Liability Limits: Risk allocation, indemnities, and insurance requirements
What's the difference between an Outsourcing Agreement and an Agency Agreement?
An Outsourcing Agreement differs significantly from an Agency Agreement, though both involve external parties performing services. The key distinctions lie in control, liability, and relationship structure.
- Legal Relationship: Agency Agreements create authority for one party to act on behalf of another, while Outsourcing Agreements establish a vendor-client relationship without representation powers
- Control Level: Agents must follow principal's direct instructions; outsourced providers maintain operational independence within agreed service levels
- Liability Structure: Agents can legally bind their principals to third parties, while outsourcing providers cannot create legal obligations for their clients
- Performance Metrics: Outsourcing focuses on specific deliverables and SLAs, while agency relationships emphasize duty of loyalty and fiduciary obligations
- Risk Management: Outsourcing requires detailed service specifications and data protection provisions; agency focuses on authority limits and third-party dealings
Why Trust GenieAI?
- 244,337 businesses have trusted GenieAI to draft 365,360 legal documents (and growing).
- Across every document GenieAI reviews, the median document carries 4 high-priority risks.
- Vague or ambiguous wording is the single most common problem, at 14.6% of all issues raised.
- GenieAI reviews a full contract, clause by clause, in typically under two minutes.
Source: GenieAI internal data Updated 6 hours ago
About the Outsourcing Agreement
- Scope Definition: List all services to be outsourced, including specific deliverables, timelines, and quality standards
- Provider Details: Gather full company information, certifications, and track record of the service provider
- Cost Structure: Document pricing, payment terms, and any performance-linked incentives or penalties
- Service Levels: Define measurable performance metrics, reporting requirements, and review periods
- Data Protection: Map out data flows, security requirements, and GDPR compliance measures
- Exit Strategy: Plan transition arrangements, notice periods, and handover procedures
- TUPE Impact: Assess if staff transfers apply and gather relevant employment details
Explore 208,390+ legal templates
Explore 208,390+ legal templates
All Outsourcing Agreement templates
- Agreement For Outsourcing Call Center Support
- Data Outsourcing Agreement
- Employee Outsourcing Agreement
- Hr Outsourcing Contract
- Hr Outsourcing Contract Agreement
- IT Outsourcing Agreement
- Manufacturing Outsourcing Agreement
- Outsourced Employee Contract
- Outsourcing Service Level Agreement
- Recruitment Process Outsourcing Agreement
- Sales And Marketing Outsourcing Agreement
Genie's Security Promise
Genie is the safest place to draft. Here's how we prioritise your privacy and security.
Your data is private:
We do not train on your data; Genie's AI improves independently
All data stored on Genie is private to your organisation
Your documents are protected:
Your documents are protected by ultra-secure 256-bit encryption
We are ISO27001 certified, so your data is secure
Organizational security:
You retain IP ownership of your documents and their information
You have full control over your data and who gets to see it