UK: Cloud Computing - What Are You Signing Up To? An Analysis Of Standard Terms And Conditions

Last Updated: 22 March 2011
Article by Stephen Critchley

The benefits of cloud services are often cited. They're low cost. They're scalable. They're permanently state-of-the-art.

However, at least with traditional IT outsourcing, the customer can negotiate a balanced, even a customer-friendly contract. Cloud customers usually have little option but to accept standard T&Cs. It is a utility model, where multiple users each buy a slice of the same pre-existing service. Providers tend to have the "take it or leave it" mentality of a gas or electricity company, with little appetite for negotiating, even with large customers.

Researchers at Queen Mary University, London have studied the T&Cs of 31 cloud computing services, and found remarkable consistency. An analysis of their findings can be downloaded here.

We will not regurgitate all the findings, but the following were of particular interest.

Applicable Law, Jurisdiction and Limitation

Traditional outsourcing contracts usually stipulate the customer's law and jurisdiction. Typically it is the same as the provider's, so there is no argument.

Cloud service providers are not geographically tied to their customers, and tend to prefer their own law and jurisdiction. 15 of the 31 T&Cs chose a US State law. Only 10 stipulated English law for English customers; for various reasons. Only two of the 10 were because the T&Cs elected the customer's law.

Many had short limitation periods for bringing a claim. IBM, two years. Apple, one year. ADrive, six months.

Warranties for Performance of the Service

The paper said that this was perhaps the area where all 31 T&Cs were most similar.

Almost without exception, every provider went to considerable - and in some cases extraordinary - lengths to deny that any such warranty existed.

The paper quotes GoGrid's disclaimer which was fuller than, but not fundamentally different from others:

GoGrid does not warrant that the Service will be uninterrupted, error-free, or free from viruses or other harmful components. The Service is provided with no warranties regarding security, reliability, protection from attacks, data integrity, or data availability.

Many providers including GoGrid, Facebook and Amazon also exclude warranties of fitness for purpose or merchantable quality. Such disclaimers may be invalid if they conflict with the applicable law, but the previous heading notes that the customers' domestic law may not apply. Furthermore, some providers applying an EU law (including Apple) disclaimed warranties even though the disclaimer conflicted with EU law.

Data Location / Transfer

Perhaps the main concern about cloud services is the data protection implications of cross-border transfer and processing outside the customer's control. There is little guidance at present as to how cloud customers can ensure compliance with data protection laws. The Information Commissioner's Code did little more than acknowledge the problem.

The issue is largely outside the scope of the University's paper too. However, it is the first of a series of papers by the University's "Cloud Legal Project", and data protection will be the subject of a future one. Also, the paper does at least touch on the issue insofar as it reviews T&Cs concerning data location and transfer.

Surprisingly given the level of concern, 15 of the 31 T&Cs made no reference to the issue at all. Of the rest, only seven (presumably American) providers claimed to meet the criteria for "US Safe Harbor" status agreed between the EU and the US, certifying that a US company meets the more rigorous data protection requirements of EU law. The paper notes that, where the provider is itself based in the EU:

the EU Data Protection regime acts as a strong brake on unfettered transfer of many sorts of data out of Europe.

Data Integrity

Data integrity - both in terms of accidental loss of a customer's data and unauthorised access to it by a third party - is a key concern of many customers; but, to quote the report:

Our survey found however that most providers not only avoided giving undertakings in respect of data integrity but actually disclaimed liability for it.

Several T&Cs suggested that customers:

  • combat unauthorised access by encrypting their data, or
  • hedge against data loss by making "separate backup arrangements", even when the service most likely is the customer's "separate backup arrangement"!

The T&Cs of two data backup services, Symantec's Norton Online and Iron Mountain, do not mention data integrity at all.

Data Preservation upon Termination of Contract

There are two issues here. Whether the data will be deleted and, if not, whether the customer can access it. The paper says that providers fall broadly into three camps:

  1. Those who commit to preserve the data for a set time, during which the customer may access it, sometimes for a charge.
  2. Those who reserve the right to delete it immediately.
  3. Those who commit neither to preserving nor deleting it.

Specific assurances that data will be deleted post-contract for customer security and privacy were not common. The paper only mentions one provider who offered it.

Acceptable Use Policy

All 31 T&Cs had an AUP, and they were remarkably consistent; prohibiting use of services for:

  • spamming,
  • fraud,
  • gambling,
  • hacking other systems, or
  • hosting content that was obscene, defamatory, discriminatory or tending to incite hatred.

There were some more specific restrictions relevant to the service on offer. For example, Iron Mountain offers a business data backup service, and prohibits its use for any other purpose and Facebook prohibits use by sex offenders.

Those of you involved in the proliferation of weapons of mass destruction are, unfortunately, prohibited from using Rackspace!

Variation of T&Cs

The paper found significant differences here. At one extreme, 8 of the 31 T&Cs made no reference to variation at all, making it unclear on what basis a variation could bind an existing customer. At the other extreme, 13 of the providers reserved the right to vary the contract unilaterally simply by posting new T&Cs on their website, with no duty to inform customers.


It may be difficult to negotiate bespoke terms with cloud providers, but the paper highlights differences between standard T&Cs, so it is a useful reference for customers wanting to know how normal an unfavourable term is, and whether it is worth shopping around. The market is in its infancy, and it was to be expected that early T&Cs would be biased towards the provider. Whether the balance shifts will depend upon the diligence with which customers study competing T&Cs and vote with their feet.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.