Data Liability In Technology Contracts: Insights From Recent Trends

Allocating liability for data breaches in technology contracts is a growing concern for Canadian businesses. Blakes recently launched the first edition of the Canadian Data Liability Study, which identifies and analyzes market trends related to data liability in negotiated commercial technology agreements.

This article highlights the study's key findings and provides guidance on best practices for managing data-related liability.

1. Separate Liability Caps. One of the most significant findings of the study was the widespread use of separate liability caps for data breaches. About 75% of agreements imposed a cap on data-related liability, and of those, 65% featured a distinct cap for data issues. This approach reflects the heightened risk of data breaches while avoiding unlimited liability, allowing parties to bridge the gap between a general limitation of liability and the reality of potentially catastrophic data losses.