A company has a five-year contractual agreement with a third-party data processor. Two years into the contract, a new, stringent data privacy regulation is enacted in a key jurisdiction where the company operates. What is the most appropriate initial action for the company's security leadership to take regarding this contractual obligation?
Wait until the contract's renewal period to incorporate the new regulatory requirements into the agreement.
Immediately terminate the contract with the vendor to avoid any potential non-compliance penalties.
Assume the vendor is automatically responsible for all new compliance requirements and take no action.
Review the contract's compliance and right-to-audit clauses and schedule a meeting with the vendor to discuss amending the agreement.
Contractual obligations are not static and must adapt to changes in the legal, regulatory, and threat landscape. The most responsible first step is to review the contract for clauses addressing regulatory changes (such as right-to-audit or compliance clauses) and then proactively engage the third party to ensure both organizations can meet the new compliance requirements. Terminating the contract is a drastic final measure, not an initial step. Ignoring the issue until renewal is negligent, and assuming the vendor will handle everything without verification is a failure of due diligence.
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