Lawyers warn of harmful clauses in cloud contracts

Companies should be wary of potentially harmful clauses hidden in contracts for cloud services

Companies should be wary of potentially harmful clauses hidden in contracts with cloud providers, a report from the Centre for Commercial Law Studies has warned.

The research from at the University of London's law department examined contracts from 27 cloud providers and found clauses that could have a negative effect on customers' interests.

Some contracts reserve the right to terminate accounts for apparent lack of use, while others may hand over customer data if it is deemed to serve their business interests, and many cloud providers often exclude liability for loss of data, it found.

"Perhaps the most disconcerting discovery of the survey is that many cloud providers claimed to be able to amend their contracts unilaterally, simply by posting an updated version on the web," warned the report.

Christopher Millard, professor at Centre for Commercial Law Studies, said the ease and convenience with which cloud computing contracts can be set up may lull customers into overlooking important issues of data protection.

Customers should review the terms and conditions before signing up to anything, he said.

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