5 legal gotchas in the cloud

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Don't sign that contract until you consider five red flags in cloud service deals.

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.

[10 SaaS companies to watch and SaaS, PaaS, and IaaS: A security checklist for cloud models]

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.

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