Presumably by "outer circle" you mean a circumscribing circle that just touches the four corners of the square.
If the area of the square is 196 decimeters squared, then the side length is √196 or 14 decimeters, which means the diagonal of the square is 14√2decimeters, which means half the diagonal is 7√2 decimeters. Since the radius of the circumscribing circle is equal to half the square diagonal, I'm sure you can work out the circle area from here.