CLOUD COMPUTING AND LAW (III) – LEGAL ISSUES RELATED TO CLOUD COMPUTING CONTRACTS (I)

Av. Sevcen CAN & Av. Yasemin ÇORAK

In our previous article, we explained cloud computing contracts in general (Please see…). In this article, we will mention potential legal issues related to cloud computing contracts.

1) Issues With the Validity of Contract

Cloud computing contracts are not typical contracts regulated by law, they are sui generis contracts which concluded on the principle of freedom of contract. The validity of contracts is not depend on any form requirement unless ortherwise required by law. Since cloud computing contracts are not typical contracts regulated by law, they are not subject to any form requirement and whether the cloud computing contract is written or verbal will not affect its validity. However, in order to eliminate some potential legal issues and in terms of proof law, it is recommended to conclude the cloud computing contract in written and even with wet-ink signature. Despite this, in practice, since the cloud provider and cloud user who are contract parties are located in distant geographical locations (abroad and/or even overseas), cloud computing contracts are usually concluded over standard texts and by only clicking an “accept” button.

In accordance with the Article 20 of the Turkish Code of Obligations No. 6098, the concept of ‘general terms and conditions’ is defined as fixed clauses are previously and unilaterally prepared by regulator and submitted to the other party. General terms and conditions are intended to be used by regulator in a series of similar contracts at a later time. Accordingly, cloud computing contracts may be described as ‘general terms and conditions’, since they are concluded on digital platforms, through standard text, by clicking an “accept” button and contract clauses cannot be negotiated by their parties.

If the general terms and conditions of the contract are against the other party’s interest, the regulator shall inform the other party clearly regarding these conditions and ensure that he learn their content absolutely. The regulator is the party with the burden of proof that the conditions of the contract are negotiated and the content is notified to the other party. In addition, ‘general terms and conditions’ of the contract should not be irrelevant to nature of the contract. Otherwise, these conditions shall be deemed unwritten, and if both parties are traders, unfair competition provisions might be applied in accordance with Article 55 of the Turkish Commercial Code.

In our next article, we will explain the issues related to applicable law and competent courts.

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