---
title: "Data protection clause for service providers, including AI vendors (no training, retention, offshore disclosure)"
url: "https://ailawframework.com/precedents/privacy-data-protection-and-cyber/data-processing-ai-vendor-clause"
type: "precedent"
site: "AI Law Framework"
id: "a25-data-processing-ai-vendor-clause"
area_id: "A25"
kind: "clause"
ai_level: "yellow"
version: 1
law_stated_as_at: "2026-10-17"
---

# Data protection clause for service providers, including AI vendors (no training, retention, offshore disclosure)

> An Australian-law data protection clause for a services or SaaS agreement that controls how a supplier, including an AI provider, uses, stores, moves and deletes customer data, with no-training and breach-cooperation…

Canonical page: https://ailawframework.com/precedents/privacy-data-protection-and-cyber/data-processing-ai-vendor-clause  
Law stated as at: 2026-10-17

Site index for agents: https://ailawframework.com/llms.txt

An Australian-law data protection clause for a services or SaaS agreement that controls how a supplier, including an AI provider, uses, stores, moves and deletes customer data, with no-training and breach-cooperation terms that fit the Privacy Act.

## Key facts

- Kind: Clause. Wording to drop into a longer document.
- Practice area: [Privacy, Data Protection & Cyber](https://ailawframework.com/precedents/privacy-data-protection-and-cyber.md)
- Jurisdictions: Australia
- AI level: Yellow. AI can help in set ways. A lawyer checks specific points before use.
- Law stated as at: 2026-10-17
- Status: Maintained. Checked on 2026-10-17 against the 6 authorities it cites, for Australia.

## When to use it

Use as the customer's position when buying a service that will hold personal or confidential information, especially one with AI features. Not suitable as is where the supplier is the controller of its own data or where the GDPR's article 28 terms are mandatory; adapt for those.

## How AI may be used

AI may compare a vendor's terms with this clause and list gaps. Negotiated positions and acceptance of residual risk are for the lawyer and the client.

**AI may:**

- Extract the vendor's terms on training, retention, sub-processors, locations and incident notice into a table against each clause here.
- Prepare a first mark-up of the vendor's paper using this clause as the playbook, for lawyer review.
- Track the vendor's sub-processor list and model-change notices against clauses 7 and 10.

**AI must not:**

- Must not accept a vendor position or decide that residual risk is acceptable.
- Must not upload the client's confidential drafts into a tool whose terms allow training on inputs.
- Must not treat a vendor's marketing or trust-centre statements as contractual commitments.

**The lawyer checks:**

- The vendor's online terms, data processing addendum and AI terms have all been read, including the order of precedence.
- Locations and sub-processors match what the client's privacy policy says about overseas disclosure.
- The incident notice period lets the client meet s 26WH and s 26WK.

## Authorities

- [Privacy Act 1988 (Cth) Sch 1 APP 6 (use and disclosure)](https://www.legislation.gov.au/C2004A03712/latest/text)
- [Privacy Act 1988 (Cth) Sch 1 APP 8 and s 16C (cross-border disclosure; accountability for overseas recipients)](https://www.legislation.gov.au/C2004A03712/latest/text)
- [Privacy Act 1988 (Cth) Sch 1 APP 11 (security, including technical and organisational measures)](https://www.legislation.gov.au/C2004A03712/latest/text)
- [Privacy Act 1988 (Cth) ss 26WC, 26WH, 26WK and 26WL (deemed holding; assessment; notification)](https://www.legislation.gov.au/C2004A03712/latest/text)
- [Privacy Act 1988 (Cth) Sch 1 APP 1.7 to 1.9 (automated-decision disclosures, from 10 December 2026)](https://www.legislation.gov.au/C2024A00128/asmade/text)
- [OAIC, Guidance on privacy and the use of commercially available AI products (October 2024)](https://www.oaic.gov.au/privacy/privacy-guidance-for-organisations-and-government-agencies/guidance-on-privacy-and-the-use-of-commercially-available-ai-products)

## Official form

[Official form](https://www.oaic.gov.au/privacy/privacy-guidance-for-organisations-and-government-agencies/guidance-on-privacy-and-the-use-of-commercially-available-ai-products)

## Full text and drafting notes

The full text and the drafting notes are not part of this public page. Signed-in firm accounts can read them at https://ailawframework.com/precedents/privacy-data-protection-and-cyber/data-processing-ai-vendor-clause and through the signed-in MCP connector https://ailawframework.com/mcp/firm.

*Practice guidance for planning and review. Confirm current primary sources and the requirements of the actual matter. This is general information, not legal advice.*