Making Cloud SLAs readily usable in the EU private sector

CSP Providing Services Under Different Regulations

The Choice of law clause is a term of a contract in which parties specify that any dispute arising under the SLA shall be governed by in accordance with the laws of a particular jurisdiction. Since most of the major CSPs have headquarters in the United States of Americas, many of these CSP’s have designated the governing law of the state they have their headquarters applicable to the agreement. The SME has done diligence on what CSP would fit its SaaS and business ambitions best with regard to the provided IaaS. However, it did not notice the choice of law the SLA is governed by. As the SME is providing SaaS to end-users being consumers in the EU member state where it is based, it is obliged to provide the services under the laws of that member state, including consumer right provisions. Therefore, the supply chain is not workable for this SME as it cannot hold its IaaS supplier accountable or responsible if certain issues arise. The SME will bear the full liability towards its end-users without any recourse, which happened several times for this SaaS SME.

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