Research Handbooks in Business and Management series
Edited by F. Xavier Olleros and Majlinda Zhegu
Chapter 18: Innovation policy for cloud-computing contracts
Like any truly disruptive technological leap that alters real-space behaviour, the shift to cloud computing carries with it implications for the design and implementation of legal systems. This chapter explores, with a focus on choice of law and contract law, how legal institutions can facilitate the diffusion of cloud services. It proceeds in three parts. First, it relates the results of a new survey of cloud service contracts. The survey shows that choice-of-law provisions in cloud contracts have become ubiquitous, overwhelmingly favour US over non-US jurisdictions, and heavily favour California over other US states. Second, the chapter offers normative suggestions, based on analogous Internet-related jurisprudence, for how choice-of-law analyses should proceed in the cloud context. Third, the chapter analyses the future of the cloud. Two alternative paths present themselves: (1) the cloud may continue to be delivered by a thick core of large providers, or (2) by leveraging blockchain technology, the cloud may shift to a distributed model. This decentralized cloud would be likely to rely heavily on smart contracts –replacing choice of law with ‘choice of code’ and (via self-enforcement mechanisms) rendering much of traditional contract law obsolete. The chapter concludes by suggesting extralegal systems to address the gaps left by this obsolescence.
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