Outsourcing agreement

From CEOpedia | Management online

Among the main objectives of the outsourcing agreement to be concluded between the customer and a specialized service company is distinguishing the principles of mutual understanding and cooperation and the consequences of failure of parties to adopt arrangements. Therefore, in countries with developed market economy managers devote to this considerable attention. An example would be the characteristics of a outsourcing contract presented by Ch. Gay i J. Essinger [2002].

Requirements for outsourcing agreement

By developing this concept one can indicate the following requirements, which such contract should satisfy:

  • In terms of the arrangements for organizing and coordinating cooperation - implementation of outsourced services by professionals, precise understanding of the intentions and mutual expectations of the parties, mutual trust, long-term nature of cooperation, mutual benefits, the possibility of renegotiating the terms of cooperation in cases of unforeseen changes, the ability to oversee the implementation of the agreement by the subcontractors, coordination issues,
  • Within the provisions applicable to the execution of the tasks assigned - specification of the requested services, providing quality of service at the level desired by the client, mutual co-adaptation of machinery and equipment, timely delivery of ordered services, minimizing the risk of non-performance of the tasks assigned,
  • Under the regulations for organizing the flow of information - confidentiality of communication agreed upon by the partners, the types of information, reliability, adequate documentation of processes,
  • In terms of the provisions applicable to the financial settlement between the two sides - the main principles of settlement, base billing methods and terms of payment, timeliness of billing, rules for financial compensation of damage, destruction or loss of property entrusted to the contractor, the rules to impose financial penalties for non-performance or improper performance of the provisions of contract,
  • Within the regulations relating to the elimination of conflict - protection of property entrusted to the contractor against loss or damage, restrictions for improper fulfillment of contract, limiting the liability of the parties for improper fulfillment of contract, the possibility of interference by external actors such courts.

Different aspects of outsourcing agreements

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