Contemporary Concerns in Limitation of Liability Clauses in Cloud Computing Contracts

Abstract

Cloud computing services have come to be promoted as the panacea of computing services such as data storage to running software applications on the internet in the last decade. Many Fortune 500 companies have shifted to these services to sustain their respective business models. However very little attention has been given to the contracts underlying the services provided by some of the biggest software companies in the world who are in a position to dictate the terms and conditions in these contracts with institutional and private consumers. Such contracts entered in the electronic medium are overwhelmingly of a standard boilerplate form and fail to take into consideration the inequality of bargaining power between the parties. Cloud service providers have exploited this position particularly amidst the opaqueness of information on the security threats facing cloud services. A study of cloud computing contracts and its terms reveals conditions which are onerous to the interests of consumers with little legal recourse. This paper attempts to analyze the fairness and reasonableness of limitation of liability clauses in different cloud contracts of popular cloud service providers in the light of developments in the field of cloud computing.