Delaware Outsourcing Agreement - Long Form
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FAQ
An outsource agreement, sometimes called a commercial outsourcing services agreement, is a legal contract between a company and the contracted service provider they hire to perform services on their behalf.
There are three main types of outsourcing contracts that you may want to consider: fixed price, target cost contract, and time and materials contract.
In short, an outsourcing contract is a legal document that goes over what work will be handled by the third-party, what expectations you have, what timelines should be achieved, and things of that nature. It basically protects your investment and also dictates how the third-party gets paid.
The fact is, when cost reduction is the primary objective in an outsourcing initiative, the service provider often achieves that goal within the first two years. But outsourcing is a long-term arrangement, with many contracts having a five- or even 10-year term.
Outsourcing can involve using a large third-party provider, such as a company like IBM to manage IT services or FedEx Supply Chain for third-party logistics services. But it can also involve hiring individual independent contractors, temporary office workers and freelancers.
The four most common types of outsourcing contracts include fixed-price contracts, time-and-materials contracts, cost-plus contracts and managed services contracts.
No matter the contract type, a well formed outsourcing agreement should include: Intellectual property rights. Business process. Detailed description of services. Payment schedule. Insurance requirements. Warranties. Contract terms. Service level agreements.
