Contract clause library

Data handling clause: Copy, customize, and use instantly

Introduction

A data handling clause outlines how data is collected, stored, processed, transferred, and protected under an agreement. It helps ensure transparency, security, and compliance with privacy laws—especially when sensitive or personal information is involved.

Below are templates for data handling clauses tailored to different scenarios. Copy, customize, and insert them into your agreement.

Data handling clause with general data protection obligation

This version applies a broad duty of care.

Each party agrees to handle all data exchanged under this agreement in a secure, lawful, and responsible manner, consistent with industry best practices and applicable data protection laws.

Data handling clause with confidentiality safeguards

This version focuses on keeping data private.

All data shared under this agreement shall be treated as confidential and may not be disclosed to third parties without prior written consent, except as required by law.

Data handling clause with purpose limitation

This version restricts how data can be used.

Data received from the other party shall only be used for the specific purposes defined in this agreement and shall not be retained, processed, or transferred for unrelated activities.

Data handling clause with encryption requirement

This version requires security at rest and in transit.

All data must be encrypted both in transit and at rest using industry-standard encryption protocols to prevent unauthorized access or loss.

Data handling clause with data retention policy

This version sets a limit on storage duration.

Parties shall retain data only for as long as necessary to fulfill the purposes of this agreement or as required by applicable law, after which it shall be securely deleted or anonymized.

Data handling clause with access control

This version limits who can access the data.

Access to data shall be restricted to authorized personnel on a need-to-know basis, and access logs shall be maintained to monitor all data interactions.

Data handling clause with data breach notification

This version requires prompt reporting of breaches.

In the event of a data breach, the affected party shall notify the other party within [X] hours of discovery and provide details of the nature, scope, and remediation efforts taken.

Data handling clause with cross-border transfer restrictions

This version limits international data movement.

Data may not be transferred outside of the jurisdiction in which it was collected unless adequate safeguards are in place and such transfer complies with applicable data protection laws.

Data handling clause with subcontractor compliance

This version holds vendors to the same standards.

Any third party or subcontractor involved in data handling must be bound by written agreements that impose the same data protection and confidentiality obligations as set out in this agreement.

Data handling clause with audit rights

This version allows verification of data practices.

Each party reserves the right to audit the other’s data handling practices on reasonable notice, to confirm compliance with the obligations in this agreement.

Data handling clause with data minimization requirement

This version limits data to only what’s needed.

Each party agrees to collect and process only the minimum amount of data necessary to fulfill the obligations under this agreement.

Data handling clause with anonymization commitment

This version promotes anonymizing data where possible.

Wherever feasible, personal data shall be anonymized or pseudonymized prior to processing, in order to minimize risk and enhance data privacy.

Data handling clause with audit trail obligation

This version requires maintaining logs.

All data access, transfers, and processing activities must be logged and retained for a minimum of [X] months for audit and investigation purposes.

Data handling clause with data classification system

This version organizes data by sensitivity.

Parties agree to categorize all data handled under this agreement into sensitivity tiers (e.g., public, internal, confidential, restricted) and apply appropriate controls to each tier.

Data handling clause with destruction certification

This version requires proof of deletion.

Upon termination of this agreement, each party must certify in writing that all data in its possession has been permanently and securely destroyed, unless otherwise required by law.

Data handling clause with physical security standards

This version extends protection to offline data.

Any physical storage of data (e.g., hard drives, printed documents) must be secured with locked access and restricted to authorized personnel only.

Data handling clause with employee training requirement

This version mandates internal education.

Each party shall ensure that employees and contractors handling data under this agreement receive regular training on data protection principles and secure handling practices.

Data handling clause with incident response plan

This version prepares for emergencies.

Parties shall maintain a written incident response plan outlining the steps to be taken in the event of a data compromise, including containment, notification, and remediation.

Data handling clause with data subject rights acknowledgment

This version ensures compliance with privacy rights.

Each party shall respect the rights of data subjects under applicable laws, including rights to access, rectify, delete, or restrict processing of their personal data.

Data handling clause with independent security assessment clause

This version enables outside evaluation.

Upon request, either party shall provide evidence of third-party security assessments or penetration testing related to systems that handle shared data.

Data handling clause with data portability support

This version supports secure export of data.

Upon termination or request, each party agrees to make data available to the other in a structured, commonly used, and machine-readable format, enabling portability.

Data handling clause with real-time monitoring protocol

This version requires live oversight.

Critical data handling systems must support real-time monitoring and alerting for unauthorized access attempts or anomalies.

Data handling clause with backup and disaster recovery policy

This version ensures business continuity.

All critical data must be regularly backed up and included in the party’s disaster recovery plan, with testing performed at least once every [X] months.

Data handling clause with role-based access control (RBAC)

This version limits access by job function.

Access to data must be governed by a role-based access control system, ensuring that individuals only have access to data necessary for their job responsibilities.

Data handling clause with change management procedure

This version manages how data systems evolve.

Any changes to systems or processes that impact data handling must be documented, reviewed, and approved in accordance with the party’s internal change management policy.

Data handling clause with encryption key management policy

This version governs encryption controls.

All encryption keys used for securing data must be managed according to documented key rotation and storage procedures, with access strictly limited.

Data handling clause with vulnerability disclosure process

This version facilitates security collaboration.

Each party shall maintain a process to receive, acknowledge, and respond to disclosures of security vulnerabilities related to data handling.

Data handling clause with no profiling or automated decisions

This version limits use of personal data.

Personal data handled under this agreement shall not be used for profiling, automated decision-making, or behavioral prediction without explicit consent.

Data handling clause with restrictions on re-identification

This version protects pseudonymized data.

Parties may not attempt to re-identify any anonymized or pseudonymized data received under this agreement, nor allow third parties to do so.

Data handling clause with DPO contact requirement

This version mandates a point of contact.

Each party shall designate a Data Protection Officer or equivalent contact for handling privacy-related inquiries and notifications related to this agreement.

Data handling clause with geographic data storage restriction

This version confines data to specific regions.

All personal data must be stored within [jurisdiction/country], unless prior written approval is obtained and appropriate cross-border transfer mechanisms are in place.

Data handling clause with system segregation requirement

This version separates sensitive from non-sensitive data.

Sensitive data must be stored and processed on systems that are logically and physically separated from general-purpose systems.

Data handling clause with third-party data usage disclosure

This version mandates listing external vendors.

A list of third-party vendors or subprocessors involved in handling shared data must be provided to the other party upon request and updated regularly.

Data handling clause with secure deletion methods

This version defines how data should be deleted.

All data deletions must be performed using secure, irreversible methods consistent with NIST or equivalent data destruction standards.

Data handling clause with accountability principle

This version requires evidence of compliance.

Each party shall be able to demonstrate its compliance with data handling obligations under this agreement, including maintaining written records of data activities.

This version regulates opt-ins.

If any data processing under this agreement requires end-user consent, the responsible party must implement and maintain a compliant consent management system.

Data handling clause with periodic compliance certifications

This version requires self-assessment.

Each party shall provide a written certification of compliance with this data handling clause at least once every [X] months or upon request.

Data handling clause with limited analytics permission

This version narrows data usage scope.

Data collected under this agreement may only be used for analytics or insights if it is aggregated and fully anonymized, with no possibility of individual identification.

Data handling clause with breach liability assignment

This version assigns accountability.

If a data breach is caused by a party’s failure to comply with this clause, that party shall be fully liable for all related damages, fines, and costs.

Data handling clause with continuous improvement commitment

This version promotes ongoing enhancement.

Each party agrees to regularly assess and update its data handling practices to align with evolving legal, ethical, and technological standards.

Data handling clause with subcontractor onboarding controls

This version requires vetting vendors before data access.

Before allowing any subcontractor to access data, the contracting party must conduct a risk assessment and ensure the subcontractor agrees in writing to the same data handling obligations.

Data handling clause with end-of-life hardware procedure

This version handles physical data disposal.

Any storage media or devices containing data must be securely wiped or destroyed at the end of their lifecycle, following industry-standard sanitization protocols.

Data handling clause with peer review requirement

This version mandates oversight of sensitive handling.

All data workflows involving sensitive information must undergo peer review to validate compliance with internal security and privacy standards.

Data handling clause with data type-specific rules

This version applies different rules for different categories.

Financial, health, and biometric data shall each be governed by specific handling protocols, as defined in Annex A of this agreement.

Data handling clause with zero data resale policy

This version prohibits data monetization.

Data exchanged under this agreement may not be sold, licensed, or otherwise monetized without the express written consent of the disclosing party.

Data handling clause with no co-mingling provision

This version requires data segregation between clients.

Client data must be logically or physically separated from that of other clients, and may not be co-mingled in shared environments without contractual approval.

Data handling clause with pre-processing validation

This version mandates data checks before use.

All incoming data must be validated for accuracy, completeness, and formatting compliance prior to being processed under this agreement.

Data handling clause with access revocation timelines

This version sets response time for offboarding.

When access to data is revoked, user credentials and system permissions must be deactivated within 24 hours of termination or role change.

Data handling clause with endpoint device controls

This version regulates laptops and mobile devices.

Any endpoint device used to access data must have full-disk encryption, remote wipe capability, and current security patches installed.

This version outlines what happens when consent is withdrawn.

If a data subject revokes consent, all associated data must be deleted or anonymized within [X] business days, unless retention is required by law.

Data handling clause with periodic penetration testing

This version requires system testing for vulnerabilities.

All systems handling data must undergo penetration testing by a qualified third party at least annually, with results shared upon request.

Data handling clause with secure remote access

This version governs offsite connections.

Remote access to data systems must occur over VPN or zero-trust architectures, with multi-factor authentication enabled.

Data handling clause with special category data ban

This version forbids handling highly sensitive data.

No party may collect, store, or process special category personal data (e.g., racial, religious, genetic) under this agreement unless explicitly permitted in writing.

Data handling clause with remediation timeframe

This version sets a deadline for fixing issues.

Any data handling non-compliance identified must be corrected within [X] days of discovery or notification, whichever comes first.

Data handling clause with due diligence on inherited data

This version applies when data is transferred from another party.

Any inherited or transferred data must be reviewed to ensure it was lawfully obtained and that its continued use complies with this agreement.

Data handling clause with automated data tagging

This version promotes metadata hygiene.

All data must be automatically tagged with metadata indicating its origin, classification level, and intended use, to ensure traceability and proper access controls.

Data handling clause with layered access rights

This version adds granular controls.

Access to data must follow a layered rights model, allowing only limited functions (view, edit, export, delete) based on the user's role.

Data handling clause with secure third-party API usage

This version governs integrations.

Any third-party API that accesses or processes data under this agreement must be subject to equivalent security, logging, and compliance obligations.

Data handling clause with mandatory downtime protocol

This version includes data safety during maintenance.

During system maintenance or downtime, access to sensitive data must be suspended or placed in read-only mode to prevent unauthorized changes.

Data handling clause with no derived dataset generation

This version restricts new datasets.

Parties may not generate new datasets or profiles derived from data exchanged under this agreement without written permission from the data originator.

Data handling clause with audit response deadline

This version ensures timely audit cooperation.

If an audit of data handling practices is requested, the receiving party shall provide the requested information or access within [X] business days.

Data handling clause with redaction protocol

This version outlines sensitive data filtering.

Any data shared externally must be reviewed and redacted to remove personally identifiable or sensitive information unless sharing is authorized under the agreement.

Data handling clause with pseudonymization fallback

This version provides a backup protection layer.

If anonymization is not technically feasible, pseudonymization shall be used, ensuring that identifying keys are stored separately and access is tightly controlled.

Data handling clause with mobile application compliance

This version addresses app-based data access.

Any mobile application accessing data under this agreement must comply with the same security, logging, and authentication requirements as desktop systems.

Data handling clause with biometric data safeguards

This version focuses on high-risk data.

Biometric data shall be subject to enhanced protections, including explicit consent, separate storage, and prohibition on secondary use without written authorization.

Data handling clause with legacy system control

This version covers outdated tech.

Parties must ensure that any legacy systems interacting with data under this agreement are isolated, monitored, and subject to compensating security controls.

Data handling clause with continuous monitoring

This version adds real-time compliance checks.

Data handling systems must support continuous monitoring for unusual access patterns, failed login attempts, and policy violations.

This version applies to minor data.

If any data subject is under the age of [X], processing of their data may only occur with verifiable parental or guardian consent.

Data handling clause with blockchain data inclusion disclaimer

This version clarifies irreversibility.

If any data is stored on a blockchain or distributed ledger, the parties acknowledge that such data may not be alterable or deletable once submitted.

This version makes audits mutual.

If one party undergoes a formal data protection audit by regulators, it agrees to share non-confidential results with the other party when relevant to joint data activities.

Data handling clause with runtime isolation requirement

This version enforces containerization.

Applications handling sensitive data must run in isolated environments (e.g., containers, VMs) to prevent lateral movement in the event of compromise.

Data handling clause with time-bound access windows

This version limits duration of access.

Access to sensitive datasets must be configured with automatic expiration after a defined time period, unless manually renewed with justification.

Data handling clause with multi-jurisdictional data map

This version documents international flow.

Parties agree to maintain an up-to-date map of all jurisdictions in which data is stored or processed under this agreement.

Data handling clause with client review of subprocessors

This version allows vetting of third parties.

The client shall have the right to review and object to any subprocessor engaged in data handling activities related to this agreement.

Data handling clause with zero-day response requirement

This version prepares for urgent vulnerabilities.

If a zero-day vulnerability is discovered affecting data systems, the affected party must act within 24 hours to assess impact and mitigate risk.

Data handling clause with end-user transparency requirement

This version supports consumer awareness.

If end-user data is processed under this agreement, the responsible party shall provide clear, plain-language notices describing how such data is used and protected.

This version applies GDPR-like standards globally.

Even where GDPR does not legally apply, parties agree to uphold equivalent data handling standards, including lawfulness, fairness, and accountability.

Data handling clause with audit-triggering events

This version defines when audits can be initiated.

A data audit may be triggered if either party experiences a breach, fails a compliance checkpoint, or materially changes its data infrastructure.

Data handling clause with litigation data hold

This version preserves data during disputes.

In the event of litigation or regulatory investigation, each party shall place a hold on relevant data and suspend any scheduled deletions until the matter is resolved.

Data handling clause with streaming data policy

This version addresses real-time data.

Streaming or real-time data processed under this agreement must be subject to the same logging, encryption, and retention standards as batch data.

This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.

Last updated 17 Apr 2025