Notes on the Main Issues of Cloud Computing Contracts (prepared by the secretariat of the United Nations Commission on International Trade Law, 2019)
Introduction
The present Notes address the main issues of cloud computing contracts between business entities where one party (the provider) provides to the other party (the customer) one or more cloud computing services for end use. Contracts for resale or other forms of further distribution of cloud computing services are excluded from the scope of the Notes. Also excluded from the scope of the Notes are contracts with cloud computing service partners and other third parties that may be involved in the provision of cloud computing services to the customer (e.g., contracts with subcontractors and Internet service providers).
Cloud computing contracts may be qualified under the applicable law as a service, rental, outsourcing, licensing, mixed or other type of contract. Statutory requirements as regards its form and content may vary accordingly. In some jurisdictions, parties themselves may qualify their contract as a contract of a particular type if legislation is silent or vague on that issue; the court would take such qualification into account in interpreting the terms of the contract unless this would contradict the law, court practice, the actual intention of the parties, the factual situation or business customs or practices.
These Notes address issues that may arise from cloud computing contracts regardless of the type of cloud computing services (e.g., infrastructure as a service (IaaS), platform as a service (PaaS) or software as a service (SaaS)), their deployment model (e.g., public, community, private or hybrid) and payment terms (with or without remuneration). The primary focus of the Notes is on contracts for the provision of public SaaS-type cloud computing services for remuneration.
The ability to negotiate cloud computing contract clauses would depend on many factors, in particular on whether the contract involves standardized commoditized multi-subscriber cloud solutions or an individual tailor-made solution, whether a choice of competing offers exists, and on the bargaining positions of the potential parties. The ability to negotiate the terms of a contract, in particular clauses on unilateral suspension, termination or modification of the contract by the provider, as well as liability clauses, may be an important factor in choosing the provider where the choice exists. Although prepared primarily for parties negotiating a cloud computing contract, the Notes may also be useful for customers reviewing standard terms offered by providers to determine whether those terms sufficiently address the customer's needs.
The Notes should not be regarded as an exhaustive source of information on drafting cloud computing contracts or as a substitute for obtaining any legal and technical advice and services of professional advisers. The Notes suggest issues for consideration by potential parties before and during contract drafting, including shared responsibility for security measures, without intending to convey that all of those issues must always be considered. The various solutions discussed in the Notes will not govern the relationship between the parties unless they expressly agree upon such solutions, or unless the solutions result from provisions of the applicable law. Headings and subheadings used in the Notes and their sequence are not to be regarded as mandatory or as suggesting any preferred structure or style for a cloud computing contract. The form, content, style and structure of cloud computing contracts may vary significantly, reflecting various legal traditions, drafting styles, legal requirements and parties' needs and preferences.
Lastly, the Notes are not intended to express the position of the United Nations Commission on International Trade Law (UNCITRAL) or its secretariat on the desirability of concluding cloud computing contracts.
The Notes consist of two parts and a glossary: part one addresses the main pre-contractual aspects that potential parties may wish to consider before entering into a cloud computing contract; part two addresses the main contractual issues that negotiating parties may face while drafting a cloud computing contract; and the glossary describes some technical terms used in the Notes, to facilitate understanding.