The Impact of Adopting New Technologies on the Negotiation of Cloud-Based Contracts

As part of the National Bar Association Commercial Law Section’s 36th Annual Corporate Counsel Conference, Natasha Allen (Partner, Silicon Valley) will be moderating a panel on the impact of technology adoption on the negotiation of cloud-based contracts.

The pandemic saw both the acceleration of the migration of service offerings to the ‘cloud’ and a rise in new related technologies. Dealing with the legal issues arising from the joint trends of migration to the cloud and contracting for new technologies involves a new contracting dynamic and new risk analyses. On its face, a Software as a Service (SaaS) contract can look similar to a software license agreement, but there are distinct terms that are critical in the negotiation phase of a cloud-based deal (e.g., license rights, security, data privacy, limitation of liability, and termination rights). This rise in cloud migrations paralleled the emergence of innovative technologies deployed via the cloud such as facial recognition, voice technology, and virtual reality, which raise additional considerations. Parties to these new cloud offerings need to understand the importance of data security risks, testing requirements, applicable indemnities and warranties, as well as service level considerations when contracting for these new offerings.

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