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…

Cloud contracts

Despite the recent surge in popularity of cloud computing, the cloud market is still relatively young. This is reflected in cloud service providers’ standard contract terms, which are often non-negotiable and generally weighted heavily in favour of the service provider…

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