Force majeure and cloud computing contracts
Grazed from International Law Office. Author: Sanjay Pritam and Peter Lumley-Savile.
More and more businesses are looking to use cloud computing to access a broad range of computer software and services. At its most basic level, ‘cloud computing’ is defined as the delivery of information technology as a service over the Internet. Cloud computing offers companies substantial cost savings and greater flexibility; but despite these obvious benefits, it also presents significant risks, particularly in relation to the security of data stored in the cloud. It is therefore important that a business considering the use of cloud computing takes appropriate steps to mitigate the dangers, both legal and commercial. A company can quickly become dependent on the ability to access the cloud and may be paralysed in the event of service interruptions.
While a number of issues should be considered in a cloud computing contract (eg, performance monitoring, interoperability and transitional arrangements), this update focuses on a contract term that often does not receive the consideration it deserves, normally to the detriment of a cloud computing customer: the force majeure clause…


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