Legal Risks in the Cloud

Become An Insider

Sign up now and get FREE access to hundreds of Insider articles, guides, reviews, interviews, blogs, and other premium content. Learn more.

Don't sign that contract until you consider five red flags in cloud service deals.

Last year, a global food manufacturing and distribution company set out to move its HR talent management processes to a software-as-a-service provider. But as attorneys for the food company reviewed the proposed contract, they found some potentially serious legal land mines.

For starters, the SaaS provider had operations in the U.S., Europe and Canada. "Europe and Canada are two jurisdictions that heavily regulate [the use of] personal information. Since this was an HR system, there would be a lot of personal information," recalls Rebecca Eisner, an attorney specializing in outsourcing who represented the food company.

The provider also wanted the flexibility to move the company's information to data centers anywhere in the world, and that would subject the company to the laws of whatever country the data passed through or landed in.

To continue reading this article register now

Join the discussion
Be the first to comment on this article. Our Commenting Policies