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Confidentiality
Whenever data is released to a service provider, non‐disclosure agreements
are of a significant importance for the purchaser of a Cloud service, to
maintain its rights with respect to the data disclosed.
In addition to the nondisclosure agreement for the term of the contract, an
agreement of this kind should be and regularly is concluded for the period
after termination of the contract.
Note that after termination of the contract, the party obliged to maintain
confidentiality under the terms of the contract, the Cloud service provider in
this case, will typically insist on being given a copy of the confidential data,
in order to trace whether the data everywhere stored with the Cloud service
provider in the case of claims on grounds of violations of the nondisclosure
agreement. This copy should be stored by a trusted third party who will not
view or handover copy except in case of dispute or when requested to do so
by all of the parties to the contract.
Liability Issues
As in every commercial agreement, the is key to make sure the liability
clauses allow to precisely appreciate the financial risk involved for both sides
when entering into the agreement.
Warranty issues
A warranty is the legally required liability of the service provider or supplier
of goods, for factual or legal defects that the provider, or supplier's
performance exhibit. This is thus a special case of liability.
The warranty relates to agreed or typically assumed properties. In
technology centric contracts, such as Cloud contracts, the technical services
section and precise wording of the specified criteria assume a particular
significance.
Penalties
A penalty is a lump sum of compensation for the case of non‐fulfilment or
non‐compliant performance of the contractual duty. Penalties can be agreed
for any violation of an obligation under a contract, whether of a technical
nature, such as data availability, or of a legal nature.
