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Contracting for the ‘Internet of Things’: Looking into the Nest

The world of the ‘Internet of Things’ (‘IoT’) is just one manifestation of recent developments in information and communication technologies (‘ICTs’), closely tied to others, including ‘cloud computing’ and ‘big data’. For the purposes of this paper, the ‘Thing’ in the IoT is any physical entity capable of connectivity that directly interfaces the physical world, such as embedded devices, sensors and actuators.

In considering IoT contracts, this paper adopts a case study approach, examining the complexity of IoT through the lens of a specific product: the Nest connected thermostat, part of the Nest Labs business and owned by Google. The authors focus on the ‘legals’ of Nest (contractual documents, licences, etc.) to provide a case study of IoT complexity. After touching on some general contract law issues in relation to the IoT supply chain, they examine the rights and obligations represented in these legals and discuss the extent to which, collectively, they present a coherent and comprehensible private law framework. The authors then consider the extent to which certain statutory regimes may treat IoT contracts in terms of addressing two characteristic contractual concerns: liability attribution and unfair terms. The paper’s main conclusion is that the world of IoT demonstrates a need to consider recasting the concept of product to reflect the frequent inextricable mixture of hardware, software, data and service.

The paper written by Guido Noto La Diega and Ian Walden is available online via SSRN at:

SSRN: Contracting for the ‘Internet of Things’: Looking into the Nest

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