Cloud contracts a concern for legal teams

Wednesday 5 December 2012

Big data

Many cloud computing contracts are weighted too heavily in favour of the service provider, it has been claimed.

Writing for, Howard Baldwin noted that some service providers are operating a 'take-it-or-leave-it approach' - where they attempt to exclude all liability.

This means that if something goes wrong with hosted services, the client is forced to pick up the bill, he explained.

Mr Baldwin said that where cloud contracts include such clauses, it is bringing the IT department into direct conflict with the legal team.

The chief information officer, and people working in the IT department, are understandably eager to tap into the multiple benefits of cloud computing.

However, company lawyers - charged with mitigating the risks faced by the organisations they represent - are sometimes advising them against this course of action.

And this means many firms are failing to make the most of the cost, efficiency, flexibility and service benefits of hosted IT solutions.

Tanya Forsheit, a founding partner of InfoLawGroup, told the news provider that too many cloud computing providers expect clients to accept the terms of the standard contract, however onerous they may potentially be.

"They expect people to click through the 'I accept' options the way people click through the iTunes website," she stated.

Indeed business decision makers should ensure they are fully aware of their rights and responsibilities when moving to the cloud.

This means spending time considering the service level agreement and entering into dialogue with the cloud provider over any issues they have concerns about.

Posted by Alex Boardman