3 Things to Consider When Drafting Your Cloud Services Agreement

3 Things to Consider When Drafting Your Cloud Services Agreement

 

While there are a lot of things you should think about when drafting your cloud services agreement, here are 3 things you should definitely think through.

1) Clarity.  While not all lawyers agree, I think cloud services agreement in particular should be drafted as clear as possible. Why you ask? Well, your customers want to understand your model and what they are committing to, and so the quicker you can communicate it the better (oh yea, your cloud services agreement is really part of that communication process). Remember, that as you are providing something that is intangible, so communication, consistency and clarity are really important. 

2) Transparency. Keep in mind that you want to communicate not only the easy issues, but if there are important (difficult) issues you need to address, then you have to address them. Being totally transparent helps, because when you are providing a service remotely over the Internet ‘trust is a huge issue’ (and transparency helps to build that trust).

3) Avoid Breach of Contract. You want to be careful about what obligations you take on, as you don’t want to find yourself in breach of the agreement.  Try to only commit to obligations that are ‘in your control’ or you ‘can influence the outcome of.’  Why does it matter? Well, you generally (except for indemnities) don’t have liability under an agreement unless you are in breach. So in general you don’t want to over commit and under deliver (in fact you want to do the opposite).  However if there are certain obligations you are comfortable committing to, then consider adding them to the agreement (especially if it is something that you customer wants to see in there). For example, obligating yourself in your cloud services agreement to return the customer data is usually an easy obligation/commitment to take on.

Do you want a recent example of a clear and transparent cloud services agreement? Take a look at the  Photobucket Terms of Use. 

Disclaimer: This post is for informational and educational purposes only, and is not legal advice. You should hire an attorney if you need legal advice, which should be provided only after review of all relevant facts and applicable law.

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