Data Use Agreement: Key Components, Common Issues, Review
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What is a Data Use Agreement?
A data use agreement is a legal contract signed by a data provider and client. It specifies how data can be used. Since mishandling sensitive data can result in breaches or other issues, a data use agreement needs to be clear with protection measures.
There are various instances when data user agreements are essential, such as if a hospital is sharing patient data with a research company or a software company is sharing data with vendors.
If you need a data use agreement, read the rest of this article to explore key terms in this type of contract, the most common issues that appear in them, and how a lawyer can help you review or negotiate a data use agreement.
What are Key Components in a Data Use Agreement?
A data use agreement usually contains the following information.
- Data type. The agreement specifies what data will be used and who is allowed to access it.
- Use. The goal for using the data must be defined so that parties know how they’re allowed to use it. This section of the agreement should also specify what data usage is prohibited.
- Termination obligations. When the agreement is terminated, the data will have to be stored, returned, or destroyed. These requirements must be clear so that there is no confusion.
- Liability. If something goes wrong, such as there’s a data breach, this section of the agreement must specify who will take legal responsibility.
- Data protection. There should be measures in place to ensure that data is protected, such as message encryption and secure storage.
- Confidentiality. This specifies how the recipient is allowed to share the data so that it remains confidential and protected.
- Ownership. Who owns the data must be defined in the agreement to prevent disputes.
What are Common Red Flags in Data Use Agreements?
The most reported issues that are noted in data use agreements include the following:
Broad Uses
If the contract usage isn’t clear and specific, this can lead to violations. Prohibited activities must also be clearly defined.
Lack of Ownership
A common issue in data use agreements is little or no information about who owns the data. This can result in future disputes while also hampering the data owner when pursuing damages for breaches.
Unreasonable Liability
If liability or indemnification isn’t capped, it can result in potential financial losses from one party taking on too much responsibility.
Third Party Usage
If the agreement doesn’t limit or restrict the sharing of data with third parties or subcontractors, it can lead to legal or privacy issues.
Low Security Standards
The recipient should ensure they upkeep security standards. If there’s no obligation of this mentioned in the agreement, it can result in sensitive data exposure.
How Can You Review a Data Use Agreement?
If you have a data use agreement, it’s in your best interests to read and review it closely so you don’t agree to all its terms right away. Here are some tips for a thorough review.
Confirm Usage
The number one thing to do when reviewing a data use agreement is to confirm exactly what you’re allowed to do with the data. Perhaps this could be conducting research or training AI. Whatever the case, you don’t want any uncertainty that can cause problems.
Flag Vague Language
Any vague or misleading language can result in hidden risks and cause legal issues, so you want to make a note of it while reading the contract. Discuss and clarify them with the other party.
Check Privacy Compliance
You want to check that the agreement is clear on how the data will be legally handled and stored. It should mention all relevant laws regarding privacy.
Know Your Duties
It’s important to read through the entire agreement for information about what is your responsibility. This includes post-termination duties, such as how to handle the data when the contract ends.
Understand Audit Rights
If the provider is allowed to audit your processes, you want to define the scope for what they can do and prevent any security risks. For example, you might want to limit the audit process to the specific data use, not allow access to your entire infrastructure.
Get a Legal Review
It can be challenging to know how to review a data use agreement without a legal background. Hiring a qualified lawyer to help you thoroughly review the contract has various benefits.
A lawyer will identify any risks, protect your rights, and explain your duties so nothing is left to chance.
On ContractsCounsel, one of the biggest online legal marketplaces where you can connect with more than 1,000 vetted, experienced lawyers, you can request a legal review of your data use agreement. Here are the steps to follow:
1. Go to the ContractsCounsel marketplace.
2. Post your request for a legal review. It’s free.
3. Wait for lawyer bids. You’ll receive multiple bids from lawyers on the platform who will review your contract for a flat fee.
4. Review the lawyers' profiles. Before selecting the best lawyer for your requirements, view information provided on the platform. This includes the lawyers’ locations, their years of experience, their field of expertise, and client ratings for previous projects completed on the platform.
5. After reviewing the lawyers’ profiles, hire the best lawyer for your purposes.
Do You Need to Hire a Lawyer for a Data Use Agreement?
Besides reviewing your data use agreement, a lawyer can help you in other ways. This includes:
- Negotiating with the other party on your behalf. They are skilled at knowing how to push back for positive changes.
- Rewriting clause in the agreement. A lawyer will put everything negotiated in writing to ensure the contract is clear and specific.
- Structuring your deal. This ensures that it is aligned with your business goals.
- Aligning your agreement with other business contracts. This prevents conflict between important documents.
Why You Should Choose a Lawyer from ContractsCounsel
Hiring a lawyer for assistance with a data use agreement is easy on ContractsCounsel. You’ll get access to professional lawyers who know how to help you. Here are some benefits of hiring one:
- All lawyers on the platform are vetted.
- The platform offers fair, competitive pricing.
- Access lawyer profiles and choose the best one for your legal needs without having to find lawyers via traditional law firms.
ContractsCounsel is not a law firm, and this post should not be considered and does not contain legal advice. To ensure the information and advice in this post are correct, sufficient, and appropriate for your situation, please consult a licensed attorney. Also, using or accessing ContractsCounsel's site does not create an attorney-client relationship between you and ContractsCounsel.
Meet some of our Data Use Agreement Lawyers
Norman R.
Norman Romney is an attorney and professional engineer with over 35 years of experience in the engineering, construction, and real estate industries. He is a seasoned transactional lawyer experienced in the review, negotiation, drafting and analysis of commercial contracts, including: business asset purchase agreements, partnership buy-out agreements, non-disclosure/confidentiality agreements, commercial leases, cease-desist letters, payment demand letters, construction contracts, consulting agreements and many more. He is also experienced in the preparation and review of construction industry standard contract forms including AIA documents, EJCDC documents and FIDIC international construction industry forms. Norman’s practice has included serving a General Counsel for a large non-profit. He also represented and assisted clients in the resolution of business contract disputes. He is experienced in many forms of alternative dispute resolution such as mediation, arbitration and third-party neutrals. His clients include large and small businesses, entrepreneurs, non-profits and freelancers. He is devoted to all his clients and seeks to provide timely, efficient and cost-effective legal services.
Sarah T.
Sarah has been practicing law since 2010. Prior to becoming an attorney, Sarah worked in the insurance industry for 5 years. Sarah's practice includes civil litigation, contracts, and family matters.
"Sarah was extremely knowledgeable and helpful! Well worth the money!"
Tsion L.
Seasoned Fractional COO and Legal Counsel with a proven track record of driving operational excellence and legal compliance in high-growth companies. Skilled in developing and executing strategic plans, optimizing business processes, and managing complex legal matters. Demonstrated ability to draft commercial, partnership, and sponsorship agreements, file trademark applications and manage IP portfolios, support corporate filings and board governance. Industries served: small and medium sized small business, cannabis, hemp, consumer goods, e-commerce, SAAs and health and wellness.
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Ricardo A.
Ricardo Aponte Parsi is a real estate and corporate counsel with a 22+-year track record of assessing risk, managing litigation, and building compliance systems to protect organizational interests. Trusted business partner and problem solver, dedicated to delivering exceptional results that advance business objectives through preventive counseling, strategic risk management, and shrewd advocacy. Collaborative team leader and project manager who builds relationships, leads change, and communicates effectively with private and public stakeholders. He obtained a bachelor's degree from Syracuse University (1994) with a major in International Relations and his law degree from the Interamerican University of Puerto Rico School of Law (2000). In May 2014, he completed a Master of Laws from Northwestern University School of Law and a Certificate in Business Administration from IE Business School in Madrid, Spain. In 2018, he completed a second LL.M. at Georgetown University Law School in Securities and Financial Regulation. In 2022, he completed a certification in Privacy Law from Seton Hall University School of Law. He was president of the Board of the Puerto Rico Education Council, the licensing agency for the Commonwealth, and is currently the Chairman of the Board of Trustees of the San Juan Community College. Since November of 2024, he has worked as an attorney-advisor for the United States Air Force Installations, Energy and Environmental Law Division (SAF/GCN) at Lackland Air Force Base, in San Antonio, Texas.SAF/GCN provides legal and policy advice to members of the Secretariat, the Air Staff, and the Space Staff on virtually all matters relating to the Department’s 180 installations, nearly 10 million acres of real estate, Base Realignment, and Closure; annual $7 billion installation and operational energy budgets; annual multibillion-dollar military construction program; $8.3 billion military privatized housing portfolio; programs for environmental planning, compliance, and restoration and natural and cultural resources management; and programs for safety and occupational health. The Division advises the Center of Excellence for Environment, Facilities, and Installations and the Energy, Environmental, and Installations Directorates within the Air Force Civil Engineer Center. Experienced with estate planning, wills, trusts, prenuptial agreements and powers of attorney.
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Feras M.
Feras Mousilli is a globally recognized leader in intellectual property, entrepreneurship, and corporate strategy. As the founder and managing partner of Lloyd & Mousilli, he has driven scalable growth strategies for Fortune 500 companies as well as innovative startups in emerging markets.
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Benjamin E.
Dr. Ben Earwicker, J.D., Ph.D., is the director and administrator of the Idaho Human Rights Commission, the state-wide administrative law agency within the Idaho Department of Labor that enforces anti-discrimination law in Idaho. Prior to his work in administrative employment and civil rights law, he served as a faculty member and administrator at universities in the U.S. and New Zealand for 13 years and managed dual-enrollment modern language courses throughout Washington, Oregon, and Idaho. Ben is the CEO of VirNet Virtual Mediation, an online mediation platform with clients throughout the United States and abroad. He holds a Juris Doctorate from the University of Idaho College of Law, a Ph.D. in Spanish and Latin American Studies and a Master’s of International Studies from the University of Otago in New Zealand, and Bachelor of Arts Degrees in Psychology, Social Work, Spanish, and International Studies from Northwest Nazarene University.
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Brian W.
I founded Brian Wynne Law, PC (based in Los Angeles, CA) in late 2023 after spending over 25 years as an in-house lawyer and over 13 years serving in General Counsel and department head-level business & legal affairs, and corporate operations positions. I provide fractional general counsel and legal advisory services to a broad range of companies, both early-stage and more established, primarily in the technology, digital media, and hospitality sectors. I negotiate a variety of sales, licensing, marketing,g and technology agreements, and handle employment, compliance, privacy, board matters, dispute resolution, and risk management matters. I also assist my clients by managing corporate transactions, IP, M&A, and corporate/legal operations as a combination GC/COO.
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