Av. Sevcen CAN & Av. Yasemin ÇORAK

In our previous article, we mentioned legal issues with the validity of cloud computing contracts (Please see…). In this article, we explain potential legal issues related to applicable law and jurisdiction.

2) Potential Legal Issues Related to Applicable Law and Jurisdiction

As providing of cloud computing service, the locations of the contract parties (Service Provider and User) are often located in different geographies. This situation creates foreign element in contracts. Therefore, determining the applicable law and the competent court becomes an important issue.

If both parties of cloud computing contract are traders, they can agree on the applicable law and jurisdiction and they can add related clauses to the contract. If the parties have not an agreement on the applicable law and jurisdiction, according to the Article 24 of Act on Private International and Procedural Law No. 5718, the applicable law is the law of the workplace or (in absence of a workplace) the law of the residence of the service provider. Nevertheless considering the state of all affairs, if there is a law more tightly related to the contract, that law shall be apllied to the contract.

Where a party of the contract is not trader but the consumer, according to the Article 45 and Article 47 of Act on Private International and Procedural Law No. 5718, depending on the preference of consumer, the Turkish courts in places where the consumer’s domicile or habitual residence or the counter-party’s work place, domicile or habitual residence is located are competent. In this case, the competency of courts cannot be removed by the parties’ agreement.

In our next article, we will explain legal issues related to terms of arbitration.

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