Outsourcing Agreement

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What is

Outsourcing Agreement


“Outsourcing agreement is an agreement between a business and a service provider in which the service provider promises to provide necessary services. Such services include data processing and information management, using its own staff and equipment, and usually at its own facilities.

A good outsourcing agreement is one that provides a comprehensive road map of the duties and obligations of both the parties – outsourcer and service provider. It thus minimizes complications in case a dispute arises. But the irony is many times people neglect to pay attention while drafting an outsourcing agreement.


1. What are the three types of outsourcing contracts?

The three primary types of relationship-based software outsourcing: Staff augmentation outsourcing, managed team outsourcing, and project-based outsourcing.


2. What are the advantages of outsourcing your work?

The advantages of outsourcing the work are:-

  • Access to competent people and quick completion of work
  • Outsourcing other projects of the company gives the company quality time to focus on main business areas.
  • It helps to reduce the risks involved when taking any business decisions.
  • It helps to reduce the costs involved in setting up the business and the necessary infrastructure for it, the costs involved in retaining the organization, and the costs involved in hiring the staff for the outsourced work.