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Avoiding one-sided cloud service contracts

 

Avoiding one-sided cloud service contracts

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   Asia Cloud Forum   cloud computing

By Storage Asia Editors | Jun 25, 2012

The CFO slashes your IT budget and cloud computing seems to be the only way out. Marketing says there is no time to waste to get their campaigns start and you must buy server capacities fast. You are now about to sign up for a cloud service. Are the contract terms the first or last thing you would worry about? Will you study every single provision to hunt for devils, or are you going to scribble your name on the dotted line, secretly hoping the vendor will act in good faith and nothing bad happens?
 
"Read the SLAs!" This is what the cloud strategists tell us to do. How exactly can your organization get trapped by cloud contract provisions? Specifically, what are some of the vaguely-defined terms to watch out for? Does a cloud service contract necessarily spell out data ownership? Do cloud service providers (CSPs) owe a duty of data protection to their customers? 
 
In an interview with Asia Cloud Forum , Gigi Cheah, a partner and Jeremy Tan, an associate of law firm Norton Rose's Asia IP & Technology Group, examine the issues and dangers to avoid cloud service contracts, which are often seen as "one-sided" and "favoring the vendors." 
 
Asia Cloud Forum: It is often said cloud service contracts, especially those of public cloud, are one-sided and favoring the vendors. How?

Norton Rose: Most cloud service providers contract on standard terms which are supplier-centric and usually contain very limited warranties and disclaim liabilities for data loss or data corruption. For example, the standard terms made available by cloud service providers on their website often do not contain provisions guaranteeing any particular level of service or providing any credits should such levels not be met.
 
Although most jurisdictions have statutory provisions that restrict unduly onerous or "unfair" contract terms, it is advisable to negotiate key provisions in advance rather than rely on statutory provisions. This is especially the case as most statutory provisions that restrict unduly onerous or "unfair" contract terms may only apply to customers who sign up for consumer cloud contracts such as iCloud.
 
 
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