Information Technology Reference
In-Depth Information
7.3 The Contractual Relationship between Grid/Cloud Provider and
Customer: the Relationship
In the previous section we addressed how the relationship between a Grid/Cloud
provider and a customer can be established and we analysed the minimum content
necessary for a SLA that regulates such a relation. A contractual connection can be
compared to the life of a person: the signing of the agreement corresponds to his
birth, the breaches of the contract and liabilities to sicknesses, the contractual and
extra-contractual remedies to the medicines taken to cure the illness, the termination
of the agreement to his death. The focus of this section will be on the life and on the
sicknesses of this imaginary person whose name is contract.
It is pivotal to also point out that the contractual relationship between a Grid/
Cloud provider and an end user undoubtedly depends on the negotiating power
of the parties, and this is in particular true as regards liabilities of the technology
supplier. As it will be shown infra , big international providers, when dealing with
'normal' customers (basically individuals and small businesses) tend to exclude as
many of their liabilities as possible, so that the risk is almost entirely borne by the
customer. This means that, in practice, a person or small undertaking willing to
enter into Grid/Cloud-enabled business should be aware of the fact that, unless he is
able to negotiate specific and more favourable clauses with a technology provider,
he will basically have few if any remedies in case the technology provider does not
supply the services according to the promised QoS or if he does not provide them at
all because, for example, his business is wound up. This topic is extremely impor-
tant and has a great impact on the operations of the customer, but firstly the reader
should be acquainted with the law governing the contract, i.e. how the contractual
relationship is managed from the legal point of view.
7.3.1 The Law Applicable to the Contract
As we said above, SuperICTResources , a German technology supplier, provides Grid
or Cloud capacity to SaaSforyou , a small enterprise established in the Netherlands.
The parties enter into an SLA which regulates their contractual relationship in its
entirety, from QoS and security to liabilities and termination. The content of the
agreement is quite wide and the negotiators, who do not have a legal background,
do not take into account a very important question: which law will govern this SLA?
We will provide the reader with an answer (focused on the applicable European
legal framework) to this question, pointing out firstly that it is extremely advisable
that the contract states expressly which law is applicable to it, in order to avoid
potential problems linked to the interpretation of the applicable legal sources (that
may be, in some circumstances, rather obscure). The contracts unilaterally drafted
by big international providers always have such a clause and, if the supplier is an
American company, it is highly likely that the applicable law will be one of the
States of the federation. This poses practical problems for European customers that
are not familiar with American law and can be expected to increase the cost of liti-
gation or disputes due to the need to consult a local expert.
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