Data Processing Agreement

A legally required contract under GDPR between a data controller (the business) and a data processor (a third-party service that handles personal data on the business's behalf), defining how data must be handled, protected, and retained.

Under GDPR, founders are legally responsible for ensuring any tool or service that processes their customers' personal data has appropriate contractual safeguards. Failing to have DPAs in place exposes the business to significant regulatory fines.

A founder uses an email marketing platform, a CRM, and a cloud storage service, all of which handle personal data from her customers. She ensures each provider has a DPA in place, which most major providers offer automatically in their terms of service, keeping her GDPR compliant.