Notes on the Main Issues of Cloud Computing Contracts (prepared by the UNCITRAL secretariat, 2019)

Part two. Drafting a contract

R. Amendment of the contract

Amendments to the contract could be triggered by either party. The contract would address the procedure for introducing amendments and making them effective. The contract may also need to address the consequences of rejection of amendments by either party.

In the light of the nature of cloud computing services, it might be difficult to differentiate changes that would constitute amendment of the contract from those changes that would not. For example, the customer's use of any options made available from the outset in the contract would not necessarily constitute an amendment of the initial contract, nor would changes in services resulting from routine maintenance and other activities of the provider covered by the contract (read more). The addition of features not covered by the originally agreed terms and thus justifying changes in price may, on the other hand, constitute amendment of the contract. Any updates leading to material changes to previously agreed terms and policies may also constitute an amendment of the contract.

The extent of permissible modifications to public contracts may be limited by public procurement rules that usually restrict the freedom of parties to renegotiate terms of a contract that were subject to public tendering proceedings.

In the light of frequent modifications of the originally agreed terms, each party may wish to independently store the complete set of the originally agreed terms and their modifications.

Relevant Glossary terms

Cloud computing services: online services characterized by:

           (a)      Broad network access, meaning that services can be accessed over the network from any place where the network is available (e.g., through the Internet), using a wide variety of devices, such as mobile phones, tablets and laptops;

           (b)      Metered delivery, allowing usage of the resources to be monitored and charged by reference to level of usage (on a pay-as-you-go basis);

           (c)      Multi-tenancy, meaning that physical and virtual resources are allocated to multiple users whose data are isolated and inaccessible to one another;

           (d)      On-demand self-service, meaning that services are used by the customer as needed, automatically or with minimal interaction with the provider;

           (e)      Elasticity and scalability, meaning the capability for rapidly scaling up or down the consumption of services according to the customer's needs, including large-scale trends in resource usage (e.g., seasonal effects);

           (f)       Resource pooling, meaning that physical or virtual resources can be aggregated by the provider in order to serve one or more customers without their control or knowledge over the processes involved;

           (g)      A wide range of services from the provision and use of simple connectivity and basic computing services (such as storage, emails and office applications) to the provision and use of the whole range of physical information technology infrastructure (such as servers and data centres) and virtual resources needed for the customer to build its own information technology platforms, or deploy, manage and run customer-created or customer-acquired applications or software. Infrastructure as a service (IaaS), platform as a service (PaaS) or software as a service (SaaS) are types of cloud computing services.