We may only be halfway done with 2021, but already, legal teams like ours are thinking about and preparing businesses for 2023. The California Consumer Privacy Act (CCPA), passed into law just a few years back, has already brought about sweeping changes to the way businesses process and protect data, and the California Privacy Rights Act (CPRA) is hot on its heels with modifications and expansions aplenty that go into effect January 1, 2023. Tupac Shakur’s “California Love” introduced a generation to the wild, Wild West, but as businesses and their contractors acclimate to the new expectations and responsibilities of the CPRA, it may get wilder still. Setting the specific regulations aside for another day, let’s focus here on the future impact of the CPRA on your third-party agreements and what your legal team should be doing now to prepare.
The CPRA is expanding on the contracting requirements for businesses that sell, share, or disclose personal information to now include “contractors” and “third parties”, in addition to “service providers” (which are currently covered under the CCPA). These third-party contractors, including sub-contractors where relevant, of the business will soon need to contractually agree to comply with the CPRA requirements, too. Current third-party agreements will need to be amended and templates updated.
Your CPRA-compliant contracts will need to address:
In most cases, an addendum can be prepared by your legal counsel to incorporate these new or refined terms into your current agreements, and standard templates for future contracts should be updated, as well. The content of these provisions is crucial to adequately protect your business and advance your goals within the parameters of the CPRA. With fines being levied on a per consumer basis, a seemingly minor oversight could mean the end for a once thriving business. Contact your legal counsel to assess whether these regulations may impact your business and, if so, create an action plan to have you CPRA-ready.
This blog was written by Hunter Business Law Attorney Haley Lemon.
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