Recently we contributed to the completion of the EU Commission’s final report Comparative Study on cloud computing contracts, providing an overview over legislation, case law and administrative guidelines applicable to cloud computing contracts at an European and U.S. level. In the following weeks we are keen to share interesting outcomes of our study with you.
The first topic we will cover concerns the legal qualification of cloud computing contracts. In general, no cloud-specific contract legislations exist in the investigated countries. Therefore, cloud computing contracts are subject to national general laws and regulations on contractual agreements, applicable to all contracts irrespective of what their subject matter is. Cloud computing contracts might also be regulated by the rules applicable to named contracts. In this regard, we see that some of the countries under investigation adopt an homogenous approach to cloud computing contracts. For instance, most countries are likely to rule some or all types of cloud computing contracts as services agreements, while regulations on sales of goods are generally deemed inapplicable. Rules applicable to work contracts may apply where the cloud provider has agreed to perform a specific task, such as customizing the cloud service. Particularly interesting is the position of some German legal scholars who distinguish between non-gratuitous cloud computing contracts (both SaaS, PaaS and IaaS), which may be classified as lease agreements, and gratuitous cloud computing contracts, which may be qualified as a loan agreement. Finally, from a consumer law perspective, where a cloud contract is concluded by means of distance communication, the contract would be qualified as distance contract in all EU Member States.
In practice the transposition of cloud computing contracts into the existing rules for named contracts would be very difficult. The cloud environment possesses its own peculiar features and a classification within the traditional named contractual schemes would be impossible as they might embed features corresponding to several types of classification. As a result, legal scholars in several jurisdictions (including Italy) consider cloud computing contracts as sui generis contracts, not regulated by the existing principles relating to named contracts, but following general principles of law, in particular concerning general principles on pre-contractual information, conclusion of contracts, performance of contracts, termination of a contract, consumer protection regulations, etc.
Many sector regulatory initiatives have been issued at a national level either by administrative or supervisory authorities or by the industry itself, which may further fuel the drive towards national cloud regulations.