5 Legal Gotchas in the Cloud

Don't sign a cloud computing contract until you consider five areas that are fraught with risk in the cloud. The red flags include not only data security and privacy, but also e-discovery, search warrants and jurisdictional issues.

By Stacy Collett
Mon, April 18, 2011

Computerworld — 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.

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Originally published on www.computerworld.com. Click here to read the original story.

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