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Financial services

Summary of state of play and policy context

Financial services are increasingly provided in a digital, remote, mobile and smart form, and this inevitably implies the use and sharing of data. Leveraging data in the financial sector has led to the emergence of numerous new products and business models, offered by both established financial institutions and new market entrants through the so-called fintech industry. Examples include online banking services, cryptocurrencies, personal investment advice (increasingly AI driven), peer-to-peer lending, and innovative digital payment solutions.

From a European policy perspective, the February 2020 Data Strategy Communication stresses the need for a Common European financial data space, “to stimulate, through enhanced data sharing, innovation, market transparency, sustainable finance, as well as access to finance for European businesses and a more integrated market”. The Commission has further specified its viewpoint in the September 2020 Digital Finance Strategy1. The objective stated is to embrace digital finance while regulating its risks. Boosting digital finance would create opportunities to develop better financial products, enhance financial market integration and strengthen Europe’s autonomy in the financial system. One of the pillars to achieve this objective is the European financial data space.

In addition to the data space, the Commission sets out multiple points of action to enhance access to data and data sharing within the financial sector. EU legislation already requires financial institutions to disclose various information. Future legislative action would demand this data to be increasingly made available in machine-readable formats. Moreover, the need for further action in open finance – business-to business data sharing in the financial sector – is stressed. The revised Payment Services Directive (PSD2) already facilitates the use of customer-permissioned bank account data by banks and third party providers to create new services. An upcoming review of the Directive would further broaden the open finance framework, in accordance with data protection and competition law.

Data protection is a cross cutting concern, given the inherent sensitivity of financial details (including spending behaviour and financial resources) concerning individual persons. The European Data Protection Board emphasises in their July 2020 Guidelines on the interplay of the PSD2 and the GDPR2that although financial data is in itself not a special category of personal data in the sense of the GDPR, financial transactions can certainly reveal sensitive information. The PSD2 itself moreover distinguishes ‘sensitive payment data’ as data that can be used to carry out fraud. The EDPB therefore proposes some data minimisation and security measures that service providers can implement when handling financial data.

Industry representatives on the other hand stress the impact of the current and proposed legislation on data sharing in the financial sector. The European Banking Federation (representing national banking associations), in its response3 to the Digital Finance Strategy public consultation, is of the opinion that opportunities for data-driven innovation will come from reusing and combining data across sectors, as opposed to focusing on financial services. The Association for Financial Markets in Europe (representing capital market players) also commented4 on the public consultation and argues that organisations should be able to retain  data insights they generate. Some industry representatives, including the European Fintech Association, moreover gave feedback5 on the EDPB’s draft Guidelines. They warn against too broad an interpretation of the notion of sensitive personal data and are of the opinion that establishing the necessary safeguards is up to each service provider individually. In other words, the industry is certainly increasingly convinced of the necessity of well organised data sharing practices, even if opinions on the need for strict regulation or guidance from regulators are divided.

The opinions of these organisations point to one of the financial services sector’s specific characteristics and challenges in relation to data sharing: it is a highly regulated environment. Some of this legislation enhances data sharing, such as the PSD2. Other legislation might bring obstacles motivated by public policy, such as banking secrecy, data protection, and information security6 requirements. Contracts will therefore play an important role in achieving a reasonable equilibrium.

 

Clauses per topic

Scoping of the Data

 

Real-life clause for scoping in a contract against remuneration

Context: the clause relates to a payment services platform.

Information about you

We may request information from you as we reasonably require to facilitate our actions described in this user agreement, enable us to reduce the risk of fraud or comply with our regulatory (including anti-money laundering) obligations. You must comply with these requests in a timely fashion.  This may involve you faxing, emailing or otherwise providing to us at your own expense identification documents and information about your finance and operations (such as your most recent financial statements and merchant processing statements).

Advantages of this clause include:

Limited to data needed for specific purposes. Flexible: data is shared on a case by case basis, according to what is required for the situation at hand. 

Disadvantages of this clause include:

Vague on the actual data sharing activities, since the phrasing is exemplative (‘may’, ‘such as’). This increases flexibility for the platform operator, but reduces certainty for the customer, which is all the more pertinent since the data sharing can have far-reaching consequences.

 

Real-life clause for scoping in a contract against remuneration

Context: the clause relates to a cloud-based accounting platform  that allows for reports on expenses and linking bank accounts.

ACCESS TO YOUR FINANCIAL INSTITUTION SERVICES DATA.

General.

In connection with your use of the [x] Service and as part of the functionality of certain versions of the [x] Services, you may wish to have access to your online account(s) and financial information, including your account access number(s), password(s), security question(s) and answer(s), account number(s), login information, and any other security or access information used to access your financial institution(s) (collectively, your “FI Login Data”) and the data made available by your financial institutions(s) with such data, which may include bank balances, transaction activity, credit card charges, debits and deposits, and any messages or notices between you and the financial institution(s) (“FI Account Data”).  The [x] Services are designed to allow you to access and download your FI Account Data through the [x] Services, to allow [X] to access your financial institution account(s) using your FI Login Data, to allow [X] to download and use your FI Account Data, and to allow [X] to aggregate and combine your FI Account Data with other data.  If you lose or forget your user name or password, it will be necessary for you to return to the appropriate financial institution if you have any problems with respect to that user name or password.

You acknowledge and agree that except as set forth this Agreement, [X] has no control over your FI Login Data and no control over the access to your FI Account Data, does not guarantee that you will be able to use the [x] Service with your financial institution(s), and will have no liability whatsoever for any actions or inactions on the part of the financial institution(s) resulting in your inability to use the [x] Service to access your accounts, obtain data, download transactions, or otherwise use or access your FI Account Data.

Information from Financial Institutions’ Websites.

You acknowledge that (i) some financial institution(s) may not permit [X] or other third parties to have access to FI Login Data or to allow the [x] Service to access your FI Account Data; (ii) financial institution(s) may make changes to their websites, with or without notice to you or Intuit, that may affect the overall performance of the [x] Service and prevent or delay aggregation of data from such websites; and (iii) the [x] Service refreshes your [x] Service account data by collecting the FI Account Data automatically or manually (depending on your financial institution(s) or any changes by you that may require an update), so your most recent transactions may not always be reflected in the account balances or other account information presented to you by [X] through the [x] Services. If you see a discrepancy in your [x] Service account data as compared to your FI Account Data, and in any case before making any transactions or decisions based on such account data presented in the [x] Services, you should check the last refresh date for your financial institution account(s) and confirm the accuracy of the [x] Service account data against your FI Account Data and manually update such data as necessary.

Advantages of this clause include:

Clearly defines the data shared and the data sharing activities: divides the complex service into clear categories.

Disadvantages of this clause include:

Significant complexity, difficult to understand for average user.

 

Real-life clause for scoping in a contract against remuneration

Context: the clause relates to a cloud-based accounting platform that allows for reports on expenses and linking bank accounts.

CONTENT AND USE OF THE SERVICES

Responsibility for Content and Use of the Services.

Content includes any data, information, materials, text, graphics, images, music, software, audio, video, works of authorship of any kind, that are uploaded, transmitted, posted, generated, stored or otherwise made available through the Services ("Content"), which will include without limitation any Content that account holders (including you) provide through your use of the Services.  By making your Content available through your use of the Services, you grant [X] a worldwide, royalty-free, non-exclusive license to host and use your Content. Archive your Content frequently. You are responsible for any lost or unrecoverable Content. You must provide all required and appropriate warnings, information and disclosures. [X] is not responsible for any of your Content that you submit through the Services.

Advantages of this clause include:

Flexibility: use of generic terminology allows service to evolve without needing to update terms.

Disadvantages of this clause include:

The definition of data is very broad and without limitation, which means that other clauses (such as on use) can have far reaching consequences.

 

Real-life clause for scoping in a contract free of charge

Context: the clause relates to an online banking platform that offers, in particular, an account aggregation service (allowing customers to integrate information from various financial institutions), and a predictive service for recurring expenses.

Content You Provide.

THE SERVICE IS A VOLUNTARY CONVENIENCE THAT IS PROVIDED AT YOUR REQUEST. YOU AGREE THAT ANY INFORMATION YOU PROVIDE TO ACCESS THE SERVICE IS DONE VOLUNTARILY. By requesting the Service, you are authorizing us to use any information about you and your accounts that we receive in connection with your use of the Service (collectively, the "Content") as provided in this Agreement. The Content includes information about your [X] Online Accounts and Third Party Accounts, including your transactions on those accounts. We may use the Content in order to provide the Service to you and to help optimize your use of the Service. Subject to the [X] Consumer Privacy Disclosure, we may also use the Content to provide information about other products or services that may be of interest to you, whether offered by [X], one of its affiliates, another financial institution or any other business. By providing information about you and your accounts to us, you are consenting to this use of the Content, both for yourself and for any other person who may have an interest in the Content. Consumers may choose to limit our use of the Content aggregated in the Service from other institutions and accounts. For more information, you can view our Consumer Privacy Disclosure at [x]. The information and Content provided to you through the Service is for informational purposes only, and is not intended for transactional or trading purposes. Balances shown may not be real time and may reflect only the most recently refreshed data and not be accurate or timely if a refresh was not successfully completed or the information obtained from the third party during the refresh was not accurate or current. Deposit account balances are ledger amounts, all of which may not be currently available for withdrawal. Projected balances are based on information you have entered through the Service and may not reflect your actual deposit account balances. If you need current information regarding your accounts, you should contact your financial institution or other entity directly for that information.

Advantages of this clause include:

The scope of data sharing can be relatively clearly derived in relation to the reasons for data sharing.

Disadvantages of this clause include:

Vague definition of ‘Content’ can cause far-reaching consequences of other clauses. Phrasing is exemplative (‘includes’), increasing flexibility for the platform operator but reducing certainty for the customer.

 

Real-life clause for scoping in a contract against remuneration

Context: the clause relates to an API for creating applications to set up a web shop. The applications are available on a platform, and exchange data and share revenues with this platform.

Definitions

 “API Credentials” means the credentials that allow you to make authenticated requests to the [X] API.

 “Customer Data” means information (including Personal Information) relating to a Customer, including order information, payment information, or account information.

 “Merchant Data” means information (including Personal Information) relating to a Merchant or Merchant Store, including business, financial and product information and any Customer Data.

“Personal Information” means any information relating to a natural person who can be identified, directly or indirectly, in particular by reference to an identifier such as a name, a phone number, an email address, an identification number, location data, an online identifier, or any other information specific to that natural person.

Advantages of this clause include:

Clear structure.

Disadvantages of this clause include:

Phrasing is exemplative (‘including’), increasing flexibility for the platform operator but reducing certainty for the customer

 

Real-life clause for scoping in a contract against remuneration

Context: the clause relates to a loan investment platform.

Services for Users

The [X] Platform allows Users with the required authorisation to see reports, upload data, and use integrated tools to perform data analytics.

[X] collects, processes and uses information about each User. The collection of this information is necessary for the performance of the [X] Platform. [X] keeps this information throughout the contractual term of the ToU. Where applicable, the subscription application data of a User will, for the purposes of allowing the subscription of securities, be transferred by [X] to the issuer of the securities and to its and the issuer’s service providers.

Registration and contractual terms for the use of the [X] Platform

The registration requires all requested data to be provided completely and truthfully. Moreover, the User is required to keep their registration data updated at all times.

Intellectual property and permitted use of the [X] Platform

Subject to the Privacy Policy, you grant us a non-exclusive, worldwide, royalty-free, irrevocable license to use, copy, distribute, publish and transmit in any manner any data you upload or submit to the [X] Platform ("User Content").

Advantages of this clause include:

Limited to data needed for performance of the platform.

Disadvantages of this clause include:

Vague on the data sharing activities, a very broad scoping of data: flexible for platform operator, but creates uncertainty for the user. Not transparent – different clauses on data scoping and definitions of data shared are used throughout the contract, lacking overview and creating uncertainty for the user.

 

Modalities of sharing

 

Real-life clause for continuous data sharing in a contract against remuneration

Context: the clause relates to a cloud-based accounting platform  that allows for reports on expenses and linking bank accounts.

ONLINE DATA TRANSFER (NOT APPLICABLE TO VERSIONS THAT DO NOT INCLUDE ACCESS TO THE ONLINE DATA TRANSFER FEATURE).

You may have the option for [X] to transfer your data files from the [x] Service in order to facilitate certain interoperability, data integration, and data access between the [x] Service and certain supported ancillary services (the “Ancillary Services”) you may sign up for and use in connection with the [x] Service (the “Online Data Transfer”). In order for you to select the Online Data Transfer option, you must (i) have registered select versions of the [x] Service, (ii) have Internet access, (iii) have an active subscription to the [x] Service; and (iv) and may need to be an active subscriber to the Ancillary Services. If you select the Online Data Transfer option, a copy of all or part of your company data files will be transferred via the Internet to [X]’s servers; where you grant [X] the right and license to (i) host and maintain your data, (ii) use and transfer your data to the Ancillary Services and (iii) reformat and manipulate your data as reasonably necessary for the data to function with the Ancillary Services. Your original data files will remain in the [x] Service. If you sign up for any Ancillary Services that support Online Data Transfer, you will have the option to request that [X] send your data to any of those supported Ancillary Services. If a supported Ancillary Service is provided by a third party, you authorize [X] to transfer your data to and from the third party provider to enable provision of the Ancillary Services to you. [X] will support and maintain the data transfer service as part of the [x] Service.  You agree that the third party provider may transfer your data from the Ancillary Service to [X], and that, [X] may use such data subject to the terms of this Agreement.  You agree and acknowledge that [X] has no control over any third party provider or any third party Ancillary Services. Your use of the Ancillary Service is subject to additional third party terms and conditions.  Please carefully review their terms and conditions, including privacy policy.  If you do not agree with their terms and policies, you should not use or access the third party Ancillary Service and you should not authorize the Online Data Transfer to the third party Ancillary Service.

Advantages of this clause include:

Flexibility: Ancillary services can be added without needing to change the terms of use, which allows for the service to evolve.

Disadvantages of this clause include:

No guarantee that the data will successfully be synced with the Ancillary service.

 

 

Real-life clause for continuous data sharing in a contract against remuneration

Context: the clause relates to a cloud-based accounting platform  that allows for reports on expenses and linking bank accounts.

ACCOUNT INFORMATION SERVICES

1             Users of the [x] Services may opt to use Account Information Services to automatically import transaction and other information ("transaction information") into the relevant [x] Account as an alternative to you manually entering this transaction information.

2              The Account Information Services as described in section 11.3 below are provided to you by [X]. [X] is registered with the Financial Conduct Authority under the Payment Service Regulations

3             Account Information Services allows you to connect certain bank or other payment accounts you hold (“account") with your [x] Account to automatically import transaction information from that account. You can choose whether to connect with your bank account using the direct feed option or the web feed option.

(a)             For the direct feed option, you will be required to complete either a customer authority form or follow your bank’s authentication process which instructs your bank (or other financial institution) to share transaction information with [X]. Your bank (or other financial institution) may request that you authorise this by completing its own authority as well or instead.  Once authorised, your bank will provide [X] with transaction information. You hereby acknowledge that [X] will receive this information more than four times a day.

(b)              For the web feed option we will request your online banking security credentials.  Once we connect to your bank, our product downloads your transaction information automatically and securely. Each time you sign-in to your [x] Account, we will use your stored online banking credentials to connect to your bank and download your transaction information so that you have the latest information. You may be required to submit additional credentials, such as from multi-factor authentication devices.

We will process the transaction information obtained from your bank and present this to you via your [x] Account and, where relevant, any Additional Users that have been granted access to your [x] Account in accordance with clause 19 or, if you have granted your accountant access to your [x] Account via [x], your accountant or financial advisor.

4              If you have a complaint relating to the Account Information Services you can contact us by telephone on [X]

5              If your complaint relates to Account Information Services and we do not resolve it to your satisfaction, you may be able to refer it to the UK Financial Ombudsman Service. You can contact the UK Financial Ombudsman by telephone on: from inside the UK: 0300 123 9123 or 0800 023 4567; from other countries: +44 20 7964 0500 on Monday to Friday, 8am to 8pm and on Saturday 9am to 1pm; by post at The Financial Ombudsman Service, Exchange Tower, London E14 9SR; or by email: complaint.info@financial-ombudsman.org.uk. The UK Financial Ombudsman Service is also available in a number of different languages and if you need it you will be put in touch with a translator when you contact the UK Financial Ombudsman Service.

6              [X] can, at its own discretion, block your account in case of any risk or event that can affect the security of your credentials or of your account content, it being specified that you will be informed as soon as possible in case such action has been taken.

7              In the event of any conflict with any other provision of this Agreement, the provisions of this Section 11 shall prevail as regards the provision of the regulated activity of Account Information Services.

8              The Agreement related to the provision of Account Information Services is entered into for an indefinite period of time. It shall enter into force as from the time you agree to it.

Advantages of this clause include:

Emphasis on how the sharing will take place, detailed explanation. Transparent, information requirement in case of blocking of the account.

Disadvantages of this clause include:

Account can be blocked without prior notice.

 

Real-life clause for continuous data sharing in a contract against remuneration

Context: the clause relates to an API for creating applications to set up a web shop. The applications are available on a platform, and exchange data and share revenues with this platform.

API Restrictions.

When using the Shopify API, you will (and will ensure that your employees, agents and service providers will) automatically sync to the Merchant Store Admin the Customer Data set out below that is collected by the Application on the Merchant Store, and any updates to such data made by the Application on behalf of the Merchant (“Applicable Customer Data”). The Applicable Customer Data must be synced via the [X] APIs Customer resource (REST or GraphQL). If a Partner is unable to sync Applicable Customer Data to the Merchant Store Admin using the [X] APIs Customer resource, the Partner will meet this requirement by providing functionality that enables the Merchant to manually sync their Customer Data with the Merchant Store Admin.

In all cases, the types of Customer Data listed below only apply to data collected or updated by the App on behalf of Merchants with respect to individuals who visit or process a transaction on the merchant’s online store and point of sale. Sensitive Personal Information is excluded from the scope of data listed below.

[…] accepts_marketing accepts_marketing_updated_at          first_name       last_name             addresses         default_address           addresses         phone currency          email             tax_exempt

This requirement (a) only applies to Public Applications, (b) applies to all Applicable Customer Data collected by the Public Application from the date that it is installed by the Merchant, and (c) does not apply to Sensitive Personal Information relating to Customers.

Advantages of this clause include:

Clarity: users know exactly the technology they are required to use for syncing data (REST or GraphQL).

Disadvantages of this clause include:

Not flexible: when the platform operator wants to change the technology, terms of use must be amended.

 

Restrictions on use

 

Real-life clause on use in a contract against remuneration

Context: the clause relates to a payment services platform.

License grant from you to [X]; intellectual property warranties

[X] does not claim ownership of the content that you provide, upload, submit or send to [X].  Nor does [X] claim ownership of the content you host on third-party websites or applications that use [X] services to provide payments services related to your content.  Subject to the next paragraph, when you provide content to the [X] companies or post content using [X] services, you grant [X] (and parties that we work with) a non-exclusive, irrevocable, royalty-free, transferable, and worldwide license to use your content and associated intellectual property and publicity rights to help us improve, operate and promote our current services and develop new ones.  [X] will not compensate you for any of your content.  You acknowledge that [X]’s use of your content will not infringe any intellectual property or publicity rights.  Further, you acknowledge and warrant that you own or otherwise control all of the rights of the content you provide, and you agree to waive your moral rights and promise not to assert such rights against [X].

Advantages of this clause include:

Clear limitation of use of the data: the service provider may access and use data to improve, operate, promote or develop services.

Disadvantages of this clause include:

Data can be exploited for the benefit of the service provider (development of new services, marketing). Vague: ‘promoting our current services’ may include onward dissemination, without this being specified.

 

Real-life clause on use in a contract against remuneration

Context: the clause relates to an accounting platform that allows for reports on expenses and linking bank accounts.

YOUR RIGHTS TO USE THE SERVICES

The Services are protected by copyright, trade secret, and other intellectual property laws. You are only granted the right to use the Services and only for the purposes described by [X]. [X] reserves all other rights in the Services. Until termination of this Agreement and as long as you meet any applicable payment obligations and comply with this Agreement, [X] grants to you a personal, limited, nonexclusive, nontransferable right and license to use the Services.

CONTENT AND USE OF THE SERVICES

Responsibility for Content and Use of the Services.

By making your Content available through your use of the Services, you grant [X] a worldwide, royalty-free, non-exclusive license to host and use your Content.

Advantages of this clause include:

Flexibility for service provider.

Disadvantages of this clause include:

No limitation to data use, including onward dissemination.

 

Real-life clause on use in a contract against remuneration

Context: the clause relates to an accounting platform that allows for reports on expenses and linking bank accounts.

[X] may monitor Content.

[X] may, but has no obligation to, monitor access to or use of the Services or Content or to review or edit any Content for the purpose of operating the Services, to ensure compliance with this Agreement, and to comply with applicable law or other legal requirements. We may disclose any information necessary to satisfy our legal obligations, protect [X] or its customers, or operate the Services properly. [X], in its sole discretion, may refuse to post, remove, or refuse to remove, or disable any Content, in whole or in part, that is alleged to be, or that we consider to be unacceptable, undesirable, inappropriate, or in violation of this Agreement.

Advantages of this clause include:

Clear limitation of use of the data – the service provider may only use data to operate the service, ensure the execution of the contract and to comply with legal obligations.

Disadvantages of this clause include:

Service provider has very broad access and usage rights because of the exemplative phrasing (‘may’). Onward dissemination of data is permitted by default.

 

Real-life clause on use in a contract against remuneration

Context: the clause relates to an accounting platform that allows for reports on expenses and linking bank accounts.

ACCESS TO YOUR FINANCIAL INSTITUTION SERVICES DATA.

Collection of FI Login Data and FI Account Data.

By agreeing to these terms and conditions, you:

1. acknowledge that in accessing your financial institution account(s) through the [x] Service, your FI Login Data and FI Account Data may be collected, converted, stored  in encrypted form and used by [X] in the United States for the purpose of providing the [x] Service;

2. authorize [X] to (i) collect and store  in encrypted form your FI Login Data, (ii) access the financial institution(s)’ websites using your FI Login Data, from time to time; (iii) download and store your FI Account Data; (iv) reformat and manipulate your FI Account Data; (v) create and provide hypertext links to your financial institution(s) FI Account Data; (vi) enhance the type of data and services we can provide to you in the future, and (vii) take such other actions as are reasonably necessary to perform the actions described in this Agreement as it relates to your use of the [x] Service;

3. hereby represent that the financial institution(s)’ account(s) and FI Login Data belong to you, you have the right to use the FI Login Data and FI Account Data as set out above and that you have the authority to appoint, and hereby expressly do appoint, [X] as your agent with all necessary power and authority to use your FI Login Data and to access and retrieve your FI Account Data, as described above, on your behalf;

4.  acknowledge that [X] does not review your FI Account Data and agree that [X] is not responsible for its completeness or accuracy;

5. acknowledge that any transactions or informational activities performed at any financial institution(s)’ website are not made through the [x] Service and [X] assumes no responsibility for any such transactions or activities; and

6. acknowledge that you are solely responsible for any charges, fees or costs associated with your financial institution account(s) when accessed through the [x] Service by you or by [X].

Advantages of this clause include:

Clear limitation of use of the data – the service provider may only use data to operate the service.

Disadvantages of this clause include:

Relatively broad scoping – no clarity on what constitutes use which is ‘necessary to perform the actions described in this Agreement as it relates to your use of the Service’. Not transparent – clause about access and usage rights is titled ‘collection of data’.

 

Real-life clause on use in a contract free of charge

Context: the clause relates to an online banking platform that offers, in particular, an account aggregation service (allowing customers to integrate information from various financial institutions), and a predictive service for recurring expenses.

Aggregated Data.

Anonymous, aggregate information, comprising financial account balances, other financial account data, or other available data that is collected through your use of the Service, may be used by us and our Service Providers to conduct certain analytical research, performance tracking and benchmarking. Our Service Providers may publish summary or aggregate results relating to metrics comprised of research data, from time to time, and distribute or license such anonymous, aggregated research data for any purpose, including but not limited to, helping to improve products and services and assisting in troubleshooting and technical support. Your personally identifiable information will not be shared with or sold to third parties.

Advantages of this clause include:

Focus – usage rights for aggregate data are limited to analytical research, performance tracking and benchmarking. Does not seem to permit non-anonymised data sharing.

Disadvantages of this clause include:

No limitation on usage rights for research data based on the aggregate data (‘for any purpose’), using exemplary language (‘including but not limited to’). The research data can moreover be licensed to third parties without limitations.

 

Real-life clause on use in a contract against remuneration

Context: the clause relates to a API for creating applications to set up a web shop. The applications are available on a platform, and exchange data and share revenues with this platform.

Proprietary Rights

The Service, the [X] API, and all software, documentation, information, hardware, equipment, devices, templates, tools, documents, processes, methodologies, know-how, websites and any additional intellectual or other property used by or on behalf of [X] or [X] Related Entities or otherwise related to the Service, together with all copyrights, trademarks, patents, trade secrets and any other proprietary rights inherent therein and related thereto (collectively, “[X] Property”) will be and remain the sole and exclusive property of [X]. To the extent, if any, that ownership of any [X] Property does not automatically vest in [X] by virtue of the Terms, or otherwise, and vests in Developer, Developer hereby transfers and assigns to [X], upon the creation thereof, all rights, title and interest Developer may have in and to such [X] Property (and waives any and all moral rights, as applicable), including the right to sue and recover for past, present and future violations thereof.

As between Developer and [X], [X] shall own all right, title and interest in any Merchant Data that [X] receives as a result of a Merchant’s installation or use of an Application, and all such Merchant Data shall be subject to the [X] Terms of Service and the [X] Privacy Policy.

[X] does not acquire ownership in your Application, and by using the [X] API, you do not acquire ownership of any rights in the [X] APIs or the content that is accessed through the [X] APIs.

Privacy and Data Security

If you access Merchant Data, you will (and will ensure that your employees, agents and service providers will):

  1. not use, access, store, or make copies of the Merchant Data or any other data relating to a Merchant, Merchant Store or Customers that Developer receives via the Application or the [X] API except as necessary to provide the Application services to the Merchant to whom the Merchant Data relates and as described in the applicable Merchant Agreement or Developer Privacy Policy, and only within the limits and for the purposes as specified by the Merchant;
  2. not share, sell, disclose or otherwise provide such information to any third party, except as provided for in the Terms;
  3. except where prohibited or varied by applicable law, delete all originals, copies and reproductions of the Merchant Data within 30 days when (A) the Merchant uninstalls the Application, (B) when it is no longer required to provide the services of your Application to the Merchant to whom the Merchant Data relates, as may be described in the applicable Merchant Agreement or Developer Privacy Policy, or (C) you receive an enforceable request to delete data from a Merchant, a Customer or [X]. If you are unable to comply with this Section 6.2.3 you will promptly notify [X];
  4. provide the Merchant (or where required by applicable law, the Customer) with access to a structured, commonly used, and machine readable copy of any Personal Information that you have that relates to such Merchant or Customer from whom you receive the request, and provide them with an opportunity to correct this information;
  5. not use information from Merchants or Customers for competitive benchmarking;
  6. not communicate with Customers directly or indirectly, provided however that Developer may contact Customers if the information is obtained from another source, such as from the Customers themselves, or if Developer has obtained consent to do so in the Merchant Agreement;
  7. ensure that you have obtained effective consent from the applicable individual, to the extent such consent is legally required, before you provide [X] with information that you independently collected from them;
  8. not directly or indirectly transfer any data you receive from [X] (including anonymous, aggregate or derived data) to any third party or any other Application you may own, except as necessary to provide your Application's services or if expressly authorized by the Merchant;
  9. not put Merchant Data or any other data you receive from [X] in a search engine or directory, or include web search functionality on [X], except as necessary to provide your Application's services;
  10. promptly notify [X] of any actual or suspected breach or compromise of Merchant Data (a “Data Breach”) within twenty-four (24) hours of becoming aware of such occurrence. Upon learning of the Data Breach, at your own cost, you will: (A) promptly remedy the Data Breach to prevent any further loss of Merchant Data; (B) investigate the incident; (C) take reasonable actions to mitigate any future anticipated harm to [X], the [X] Related Entities, Merchants or Customers; and (D) promptly answer questions from [X] relating to the Data Breach, regularly communicate the progress of your investigation to [X] and cooperate to provide [X] with any additional requested information in a timely manner.

Advantages of this clause include:

Emphasis on intellectual property rights, IP ownership of the application remains with the developer.

Disadvantages of this clause include:

Platform operator owns all customer data generated through the application, as such there is no limitation on data use, including onward dissemination. Rights are not reciprocal: the platform operator may exploit the customer data for development of new products and services, identifying market trends, etc, while the developer may not.

 

Real-life clause for scoping in a contract against remuneration

Context: the clause relates to a loan investment platform.

Intellectual property and permitted use of the [X] Platform

Subject to the Privacy Policy, you grant us a non-exclusive, worldwide, royalty-free, irrevocable license to use, copy, distribute, publish and transmit in any manner any data you upload or submit to the [X] Platform ("User Content").

Confidentiality

[X] shall reserve the right to:

  1. use and replicate the logo, image and brand colours of the User for the purposes of its promotional materials;
  2. present as well as make references to the data received from the User during the data gathering process for the purposes of its promotional materials; and
  3. retain and archive loan data (if any) gathered from the User (including historical data tapes and other loan data) for any purpose, including (but not limited to):
  1. for developing promotional materials for the parties’ cooperation;
  2. on an anonymised basis, for preparing comparisons between the gathered data and other data; and
  3. for preparing generic statistical reports, analyses, compilations and related purposes.

Advantages of this clause include:

Usage of (general) data limited to marketing needs.

Disadvantages of this clause include:

No limitation on usage rights for some of the data (loan data), using exemplary language (‘including but not limited to’), creating uncertainty for the platform user.

 

Restrictions on onward dissemination

 

Real-life clause on onward dissemination in a contract against remuneration

Context: the clause relates to a payment services platform.

Your use of information; Data protection laws

If you receive information about another [X] customer, you must keep the information confidential and only use it in connection with the [X] services. You may not disclose or distribute any information about [X] users to a third party or use the information for marketing purposes unless you receive that user’s express consent to do so. You may not send unsolicited emails to a [X] customer or use the [X] services to collect payments for sending, or assist in sending, unsolicited emails to third parties.

Advantages of this clause include:

Generally balanced clause, reasonable focus on confidentiality.

Disadvantages of this clause include:

 N/A

 

Real-life clause on onward dissemination in a contract against remuneration

Context: the clause relates to a payment services platform.

Access to Cardholder Data.

Merchant acknowledges that where it has access to Cardholder Data (defined as the cardholder’s card number, expiration date, and CVV2) it will abide by any data security standards of the Payment Card Industry Security Standards Council (or any replacement body), Visa or Mastercard, including the Payment Card Industry SSC Standards. In addition, you agree to comply with the data security standards required by [X] under the [X] Agreement, as may be amended from time to time. In the event that Merchant receives Cardholder Data in connection with the [X] processing services, Merchant agrees that it will not use the Cardholder Data for any purpose that it knows or should know to be fraudulent or in violation of any Association rules. Merchant also agrees that it will not sell, purchase, provide or exchange in any manner or disclose Cardholder Data to anyone other than its acquirer, Visa or MasterCard (as applicable) or in response to a government request.

Advantages of this clause include:

Onward dissemination of cardholder data is reasonably restricted. 

Disadvantages of this clause include:

N/A

 

Real-life clause on onward dissemination in a contract against remuneration

Context: the clause relates to an accounting platform that allows for reports on expenses and linking bank accounts.

PERMITTED DISCLOSURES AND USE OF DATA.

You acknowledge and agree that in order to provide you with access to and use of the [x] Services, [X] may provide your access information and account data to (i) your employee or agent who is identified in the registration data as the current system administrator for your account (the “Current Administrator”), and (ii) such other employee or agent who may be designated by you as a replacement administrator for the your account by following the procedures required by [X] to effectuate such replacement. Any other person You identified as an authorized user of the [x] Services will have access to the account data subject to the access permissions you or the system administrator assigned to them.

Advantages of this clause include:

Onward dissemination of access data only insofar as strictly necessary. 

Disadvantages of this clause include:

N/A

 

Real-life clause on onward dissemination in a contract against remuneration

Context: the clause relates to an accounting platform that allows for reports on expenses and linking bank accounts.

CONTENT AND USE OF THE SERVICES.

[X] may monitor Content.

We may disclose any information necessary to satisfy our legal obligations, protect [X] or its customers, or operate the Services properly.

Advantages of this clause include:

Focus – onward dissemination of data limited to satisfying legal needs, protecting the service operator or its customers, and operating the service.

Disadvantages of this clause include:

Onward dissemination permitted by default, customer has no control over data sharing, no apparent contractual safeguards will be demanded from recipients.

 

Real-life clause on onward dissemination in a contract against remuneration

Context: the clause relates to a online banking platform that offers, in particular, an account aggregation service (allowing customers to integrate information from various financial institutions), and a predictive service for recurring expenses.

Confidentiality of Information about Online Accounts

We may disclose information to third parties about your Online Accounts and the transfers, bill payments and other Services you request through Online Banking in the following situations:

  • When it is necessary for completing transactions you have requested;
  • When it is necessary to activate or provide Online Banking to you;
  • In order to verify the existence and condition of your account to a third party, such as a consumer reporting agency or other credit bureau, or a Biller;
  • In order to comply with a governmental agency or court order;
  • In order to prevent or remedy fraud;
  • As permitted by applicable law, and
  • If you give us your written permission.

For more information about our privacy and security practices, please review our Online Privacy Policy, which describes our practices for using information about consumer Online Accounts, and our Online Security Statement. We may modify these documents from time to time, and the current versions of both are available on our website.

Advantages of this clause include:

Clear limitation on onward dissemination – the service provider may only disclose data to third parties for specifically enumerated purposes. Possibility for written permission allows for the necessary flexibility.

Disadvantages of this clause include:

N/A

 

Real-life clause on onward dissemination in a contract against remuneration

Context: the clause relates to a platform that allows fintech start-ups to develop banking products.

Banking secrecy and information disclosure

(1) Banking secrecy

The Bank has the duty to maintain secrecy about any customer related facts and evaluations of which it may have knowledge (banking secrecy). The Bank may only disclose information concerning the customer if it is legally required to do so or if the customer has consented thereto or if the Bank is authorized to disclose banking affairs.

(2) Banking information disclosure

Any disclosure of details of banking affairs comprises statements and comments of a general nature concerning the economic status, the creditworthiness and solvency of the customer; no information shall be disclosed as to amounts of balances of accounts, of savings deposits, of securities deposits or of other assets entrusted to the Bank or as to amounts drawn under a credit facility.

(3) Prerequisites for the disclosure of banking information

The Bank shall be entitled to disclose banking affairs concerning legal entities and on businesspersons registered in the Commercial Register, provided that the inquiry relates to their business activities. The Bank shall not, however, disclose any information if it has received instructions to the contrary from the customer. Details of banking affairs concerning other persons, in particular private customers and associations, shall be disclosed by the Bank only if such persons have expressly agreed thereto, either generally or in an individual case. Details of banking affairs shall be disclosed only if the requesting party has substantiated its justified interest in the information requested and there is no reason to assume that the disclosure of such information would be contrary to the customer’s legitimate concerns.

(4) Recipients of disclosed banking information

The Bank shall disclose details of banking affairs only to its own customers as well as to other credit institutions for their own purposes or those of their customers.

Advantages of this clause include:

Clear limitation on onward dissemination activities – the service provider may only disclose banking data to third parties when legally required, when the customer consented or when authorized to do so – on the type of data that can be disseminated – and on recipients. Possibility to instruct the service provider to not disclose data.

Disadvantages of this clause include:

For legal entities and businesspersons, onward dissemination is on an opt-out basis rather than opt-in.

 

Real-life clause on onward dissemination in a contract against remuneration

Context: the clause relates to a loan investment platform.

Confidentiality

Each User agrees:

  1. to keep all information in password-protected areas of the [X] Platform strictly confidential ("Confidential Information");
  2. not to use any Confidential Information for purposes other than for its evaluation of its business collaboration with [X]; and
  3. not to disclose any Confidential Information to third parties, with the exception of such third parties who need this information in order to carry on negotiations or evaluation of the business collaboration.

Advantages of this clause include:

Clear limitation on onward dissemination activities – the user may disclose data to third parties for negotiation needs only.

Disadvantages of this clause include:

No analytics possible by the user on the data.

 

Model clause in a contract against remuneration

Context: the clause is intended for a personal finance management environment. The objective is to ensure that Usage Data can be shared with third parties only for the purposes of providing services in relation to the system (i.e. subcontractors or other service providers to the principal), or with the permission of the customer; this includes voluntary data sharing to third parties via APIs, as is explicitly supported by the model clause.

The model clause assumes that the concept of Usage Data is defined; this can be done through the model clause on scoping.

Your Usage Data will not be sold to third parties, nor will it be made available to third parties except as set out herein.

We may make your Usage Data available to third parties for the sole purpose of providing you with services as envisaged by this Agreement. Such third parties will be bound to us by contractual terms which ensure that your Usage Data will not be used in a manner contrary to this Agreement.

In addition, we will make your Usage Data available to third parties with your permission, including through APIs, web services, or other interfaces that we choose to support. Your permission can be granted through the interfaces built into the vehicle and its services. You may use the same interfaces to terminate third party access to that Usage Data. Note that use of your data by such third parties will be subject to their own terms and conditions, which may not be under our control, and which will not be subject exclusively to the terms of this Agreement.

 

Remuneration and consideration

 

Real-life clause on remuneration/consideration in a contract against remuneration

Context: the clause relates to a payment services platform.

License grant from you to [X]; intellectual property warranties

[X] will not compensate you for any of your content.

Advantages of this clause include:

Clear. Specifically geared towards consideration for data sharing.

Disadvantages of this clause include:

N/A

 

Real-life clause on remuneration/consideration in a contract against remuneration

Context: the clause relates to an accounting platform that allows for reports on expenses and linking bank accounts.

PAYMENT

For Services offered on a payment or subscription basis, the following terms apply, unless [X] or its third party affiliate notifies you otherwise in writing. This Agreement also incorporates by reference and includes program ordering and payment terms provided to you on the website for the Services:

  1. Payments will be billed to you in Euros, U.S. dollars, or other currencies which may be made available (plus any and all applicable taxes, including without limitation VAT and GST), as shown in the product ordering and subscription terms, and your account will be debited when you subscribe and provide your payment information, unless stated otherwise in the program ordering or payment terms on the website for the Services.
  2. You must pay with one of the following:
    1. A valid credit card acceptable to [X];
    2. A valid debit card acceptable to [X];
    3. Sufficient funds in a checking or savings account to cover an electronic debit of the payment due; or
    4. By another payment option [X] provides to you in writing.
  3. If your payment and registration information is not accurate, current, and complete and you do not notify us promptly when such information changes, we may suspend or terminate your account and refuse any use of the Services.
  4. If you do not notify us of updates to your payment method (e.g., credit card expiration date), to avoid interruption of the Services, we may participate in programs supported by your card provider (e.g., updater services, recurring billing programs, etc.) to try to update your payment information, and you authorize us to continue billing your account with the updated information that we obtain.
  5. [X] will automatically renew your monthly, quarterly, or annual Services at the then-current rates, unless the Services subscription is cancelled or terminated under this Agreement.
  6. Additional cancellation or renewal terms may be provided to you on the website for the Services.

Advantages of this clause include:

Relatively straightforward subscription based model.

Disadvantages of this clause include:

Fees may be unilaterally changed without prior notice: when the subscription is automatically renewed, new fees apply.

 

Real-life clause on remuneration/consideration in a contract free of charge

Context: the clause relates to an online banking platform that offers, in particular, an account aggregation service (allowing customers to integrate information from various financial institutions), and a predictive service for recurring expenses.

Fees.

The Service is currently offered to you by [X] at no charge. [X] reserves the right to charge fees for these services in the future. You acknowledge that your use of this Service does not waive any applicable fees and charges connected with your accounts which may be displayed through the Service, and as provided for under any other account agreement that you may have with [X] or other financial institution or entity.

Advantages of this clause include:

Clear. Transparent and flexible

Disadvantages of this clause include:

No guarantee that service will remain unremunerated.

 

Real-life clause on remuneration/consideration in a contract against remuneration

Context: the clause relates to an API for creating applications to set up a web shop. The applications are available on a platform, and exchange data and share revenues with this platform.

Revenue Sharing Plans for App Developers

The “App Plan” is a revenue sharing plan that allocates revenue between [X] and an App Developer for a Public Application. Unless otherwise indicated in this Agreement or agreed to by [X] in writing, under the App Plan, an App Developer is entitled to eighty percent (80%) of the total revenues from the sale of, subscription to or charges relating to the Public Application, with [X] being entitled to the remaining twenty percent (20%).

Advantages of this clause include:

Relatively straightforward revenue sharing model.

Disadvantages of this clause include:

Not all terms are defined, possibly unclear what is part of the revenues and what is not (‘charges relating to’).

 

Liability

 

Real-life clause on liability in a contract against remuneration

Context: the clause relates to a payment services platform.

Limitation of liability

[X]’s liability is limited with respect to your [X] account and your use of the [X] services. In no event shall [X] be liable for:

  1. direct or indirect lost profits; or
  2. any special, incidental or consequential damages (including without limitation damages for loss of data or loss of business), arising out of or in connection with our websites, software, systems (including any networks and servers used to provide any of the [X] services) operated by us or on our behalf, any of the [X] services, or this user agreement (however arising, including negligence), unless and to the extent prohibited by law.

Our liability to:

  1. you; or
  2. any third parties,

in any circumstance is limited to the actual amount of direct damages (excluding direct loss of profits), unless and to the extent prohibited by law. In addition, to the extent permitted by applicable law, [X] is not liable, and you agree not to hold [X] responsible, for any damages or losses (including, but not limited to, loss of money, goodwill, or reputation, profits, or other intangible losses or any special, indirect, or consequential damages) resulting directly or indirectly from:

  • your use of, or your inability to use, our websites, software, systems (including any networks and servers used to provide any of the [X] services) operated by us or on our behalf, or any of the [X] services;
  • delays or disruptions in our websites, software, systems (including any networks and servers used to provide any of the [X] services) operated by us or on our behalf and any of the [X] services;
  • viruses or other malicious software obtained by accessing our websites, software, systems (including any networks and servers used to provide any of the [X] services) operated by us or on our behalf or any of the [X] services or any website or service linked to our websites, software or any of the [X] services;
  • glitches, bugs, errors, or inaccuracies of any kind in our websites, software, systems (including any networks and servers used to provide any of the [X] services) operated by us or on our behalf or any of the [X] services or in the information and graphics obtained from them;
  • the content, actions, or inactions of third parties;
  • a suspension or other action taken with respect to your [X] account; and/or
  • your need to modify your practices, content, or behavior, or your loss of or inability to do business, as a result of changes to this user agreement or [X]’s policies.

Advantages of this clause include:

Comprehensive approach. Alignment between liability for the product and for loss of data.

Disadvantages of this clause include:

Focused on excluding liability as far as permitted under applicable law. Excludes all liability for damages resulting from loss of connectivity.

 

Real-life clause on liability in a contract against remuneration

Context: the clause relates to an accounting platform that allows for reports on expenses and linking bank accounts.

LIMITATION OF LIABILITY AND INDEMNITY.

TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, THE ENTIRE LIABILITY OF [X], ITS AFFILIATES AND SUPPLIERS FOR ALL CLAIMS RELATING TO THIS AGREEMENT SHALL BE LIMITED TO THE AMOUNT YOU PAID FOR THE SERVICES DURING THE TWELVE (12) MONTHS PRIOR TO SUCH CLAIM. SUBJECT TO APPLICABLE LAW, [X], ITS AFFILIATES AND SUPPLIERS ARE NOT LIABLE FOR ANY OF THE FOLLOWING: (A) INDIRECT, SPECIAL, INCIDENTAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES; (B) DAMAGES RELATING TO FAILURES OF TELECOMMUNICATIONS, THE INTERNET, ELECTRONIC COMMUNICATIONS, CORRUPTION, SECURITY, LOSS OR THEFT OF DATA, VIRUSES, SPYWARE, LOSS OF BUSINESS, REVENUE, PROFITS OR INVESTMENT, OR USE OF SOFTWARE OR HARDWARE THAT DOES NOT MEET [X] SYSTEMS REQUIREMENTS. THE ABOVE LIMITATIONS APPLY EVEN IF [X] AND ITS AFFILIATES AND SUPPLIERS HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THIS AGREEMENT SETS FORTH THE ENTIRE LIABILITY OF [X], ITS AFFILIATES AND YOUR EXCLUSIVE REMEDY WITH RESPECT TO THE SERVICES AND ITS USE.

Advantages of this clause include:

Liability is capped for the service provider.

Disadvantages of this clause include:

Focused on excluding liability as far as permitted under applicable law. Excludes all liability for damages resulting from loss of data and of connectivity.

 

Real-life clause on liability in a contract against free of charge

Context: the clause relates to an online banking platform that offers, in particular, an account aggregation service (allowing customers to integrate information from various financial institutions), and a predictive service for recurring expenses.

Limitation of Liability.

YOU AGREE THAT NEITHER WE NOR ANY OF OUR AFFILIATES, ACCOUNT INFORMATION PROVIDERS OR ANY OF THEIR AFFILIATES, THIRD PARTY SERVICE PROVIDERS OR ANY OF THEIR AFFILIATES WILL BE LIABLE FOR ANY CONSEQUENTIAL, SPECIAL, OR PUNITIVE DAMAGES, OR FOR ANY INDIRECT LOSS THAT YOU MAY INCUR OR SUFFER IN CONNECTION WITH THE SERVICE (EVEN IF WE HAVE BEEN INFORMED OF THE POSSIBLITY OF SUCH DAMAGES), INCLUDING, WITHOUT LIMITATION, ATTORNEYS' FEES. TO THE FULLEST EXTENT PERMITTED UNDER APPLICABLE LAW, WE WILL NOT BE LIABLE OR RESPONSIBLE FOR ANY LOSS OR DAMAGE INCLUDING, WITHOUT LIMITATION, ANY DIRECT, INDIRECT, INCIDENTAL, SPECIAL, OR PUNITIVE LOSS OR DAMAGE (EVEN IF WE HAVE BEEN INFORMED OF THE POSSIBILITY OF SUCH LOSS OR DAMAGES) THAT MAY BE INCURRED BY YOU OR ANY OTHER PERSON ARISING OUT OF OR RELATING TO THE USE OF THE SERVICE, THE AUTHORIZATION OF AND/OR DISCLOSURE OF YOUR SECURITY CODES, PASSWORD, PIN OR OTHER ACCESS CODE BY YOU TO ANY THIRD PARTY IN ORDER FOR SUCH PARTY TO COLLECT, RETRIEVE, CONSOLIDATE, AGGREGATE OR OTHERWISE GATHER ANY INFORMATION OR DATA REGARDING YOU OR ANY OF YOUR ACCOUNTS FROM ANY FINANCIAL INSTITUTION OR OTHER ENTITY. Some jurisdictions do not allow the limitation or exclusion of liability for incidental or consequential damages. Accordingly, some of the above limitations may not apply to you.

Advantages of this clause include:

Comprehensive approach.

Disadvantages of this clause include:

Focused on excluding liability as far as permitted under applicable law. No specific data or connectivity related liability provisions.

 

Real-life clause on liability in a contract against free of charge

Context: the clause relates to a loan investment platform.

9. Liability; Indemnification

In this clause 9, references to "[X]" shall include [X], its affiliates, and its and its affiliates’ officers, directors, employees, agents, shareholders, assigns and successors.

9.1 [X] shall only be liable for damages resulting from willful misconduct or gross negligence, death or personal injury caused by [X]’s negligence, or fraud or fraudulent misrepresentation.

9.2 Subject to clause 9.1, [X] will not be liable whether based on a claim in contract, tort (including negligence), breach of statutory duty or otherwise arising out of or in relation to these ToU for any loss of profits, loss of business, loss of revenue, anticipated savings, goodwill or any indirect or consequential damages even if foreseeable and even if [X] has been advised of the possibility of such losses.

9.3 Subject to clause 9.1, [X] shall not be liable for damages resulting from events outside of [X]’s control including where such damages could not have been prevented by mitigation by or on [X]’s behalf.

9.4 Subject to clause 9.1, [X] shall not be liable for any failures or disturbances in the technical infrastructure of the [X] Platform that are outside its control.

9.5 [X] does not have control over the information and services provided by third parties. [X] shall not be liable for any information or acts of third parties and shall not be liable for any damages resulting therefrom.

9.6 You shall indemnify and hold [X] harmless from any claim or demand (including but not limited to reasonable attorney fees and costs of investigation) made by a third party due to or arising out of or related to your use of the [X] Platform, the [X] Widgets, your User Content, your violation of these ToU or your violation of any laws, regulations, or third party rights.

Advantages of this clause include:

Comprehensive, clear and structured approach. Service provider does not exclude liability for loss of connection that is not outside its control.

Disadvantages of this clause include:

No specific data related liability provision.

 

Termination conditions

 

Real-life clause on termination in a contract against remuneration

Context: the clause relates to a payment services platform.

Closing Your [X] Account

You can close your account at any time. See the [X] Help Centre for how to do this.

We may close your account at our convenience by providing you with two months’ prior notice. We may also close your account at any time if:

  1. you are in breach of this user agreement and/or we are otherwise entitled to close your account under this user agreement;
  2. you do not access your account for three years; or
  3. we suspect that your account has been accessed without your authorisation.

Where we decide to close your account we will provide you with notice of account closure and where practicable, the reasons for closing your account, together with the ability to withdraw any undisputed funds that we are holding.

[…]

In the event that we decide to discontinue any of our services or any portion or feature of our services for any reason, we will give you at least two months’ prior notice before discontinuing the service or feature, unless we determine in good faith that:

  • the service or feature must be discontinued sooner as required by law or a third-party relationship; or
  • doing so could create a security risk or substantial economic or material technical burden.

Advantages of this clause include:

Reciprocal rights of termination. Notice required in all cases.

Disadvantages of this clause include:

No period for notice determined in case the service provider terminates for specific reasons.

 

Real-life clause on termination in a contract against remuneration

Context: the clause relates to an accounting platform that allows for reports on expenses and linking bank accounts.

TERMINATION.

[X] may, in its sole discretion and without notice, restrict, deny, terminate this Agreement or suspend the Services, related or other Services, effective immediately, in whole or in part, if we determine that your use of the Services violates the Agreement, is improper or substantially exceeds or differs from normal use by other users,  raises suspicion of fraud, misuse, security concern, illegal activity or unauthorized access issues, to protect the integrity or availability of the Services or systems and comply with applicable [X] policy, if you no longer agree to receive electronic communications, or if your use of the Services conflicts with [X]’s interests or those of another user of the Services. Upon [X] notice that your use of the Services has been terminated you must immediately stop using the Services and any outstanding payments will become due.  Any termination of this Agreement shall not affect [X]’s rights to any payments due to it. [X] may terminate a free account at any time. Sections 2.2, 3 through 15 will survive and remain in effect even if the Agreement is terminated.

Advantages of this clause include:

Flexible for the service provider.

Disadvantages of this clause include:

Discretionary and unilateral termination right for the service provider only, without notice.

 

Real-life clause on termination in a contract free of charge

Context: the clause relates to an online banking platform that offers, in particular, an account aggregation service (allowing customers to integrate information from various financial institutions), and a predictive service for recurring expenses.

Termination

Termination by You. You may remove information about Third Party Accounts from the Service at any time by deleting each Third Party Account from the Service website. The only way to terminate the Service with respect to your [X] Online Accounts is to terminate your subscription to Online Banking. You may terminate your subscription to Online Banking by calling us at [x].

Termination by Us. We may immediately terminate your use of the Service without notice to you if we discover you have violated any provision of this Agreement, including, but not limited to, those found in "Use of the Service." You acknowledge that we may, at our sole discretion and without notice to you, terminate your use of the Service due to an extended period of inactivity, which may be as little as ninety (90) days. Inactivity means that you do not use Online Banking. We reserve the right to change or discontinue, temporarily or permanently, the Service at any time without notice. In order to maintain the security and integrity of the Service, we may also suspend your access to the Service at any time without notice. You agree that we will not be liable to you or any third party for any modification, suspension or discontinuance of the Service.

Advantages of this clause include:

Flexible for the service provider.

Disadvantages of this clause include:

Discretionary termination right for the service provider, without notice. Termination option for the customer is relatively complex and implies terminating the parent agreement.

 

 

Real-life clause on termination in a contract against remuneration

Context: the clause relates to an API for creating applications to set up a web shop. The applications are available on a platform, and exchange data and share revenues with this platform.

Termination.

Access to the [X] API may be terminated or suspended by [X] at any time and at [X]’s sole discretion. Without limiting the foregoing, [X] may terminate your right to use the [X] API if you breach the Terms or any documents incorporated by reference in the Terms (including the Acceptable Use Policy). Termination or suspension of Developer’s access to the [X] API may negatively affect Merchants who use Developer’s Application, and Developer is responsible to ensure that all Merchants who access or use Developer’s Application are aware of this risk.

Advantages of this clause include:

Flexible for the service provider.

Disadvantages of this clause include:

Discretionary and unilateral termination right for the service provider only, without notice.

 

Real-life clause on termination in a contract against remuneration

Context: the clause relates to a loan investment platform.

Contractual term and termination of the ToU

1. Unless terminated, the ToU shall remain in full force and effect for an undetermined term.

2. Both the User and [X] may terminate this contract at any time by serving a written notice of termination (e.g. via email, fax or letter) to the other party 2 weeks prior to the end of the month. Termination is precluded prior to the settlement of any ongoing investment.

3. The right of termination with cause remains unaffected.

Advantages of this clause include:

Reciprocal termination rights, and reasonable prior notice period.

Disadvantages of this clause include:

N/A

 

  

Model clause in a contract against remuneration

Context: this is a generic termination clause for a time based subscription service (e.g. for a monthly subscription fee).

You may terminate your use of our services at any time and for whatever reason, by giving written notice and/or by terminating your service through the interfaces supported by our products and services. This termination will enter into effect at the end of your current subscription period, and fees will continue to apply until the moment of termination.  

We retain the right to block your access to the service and/or terminate this Agreement, at any time and without prior notice, if we have reasonable grounds to indicate that you are in substantive breach of this Agreement and/or applicable laws. Furthermore, we may terminate your use of our services at any time and for whatever reason, by giving 3 months written notice. This termination will enter into effect at the end of the indicated notice period, and fees will continue to apply until the moment of termination.  

 

 
Termination consequences

 

Real-life clause on termination consequences in a contract against remuneration

Context: the clause relates to a payment services platform.

Closing Your [X] Account

When your account is closed:

  • this user agreement terminates immediately, except that this user agreement survives termination to the extent and for so long as we require to deal with the closure of your account and to comply with applicable laws and regulations;
  • we may cancel any pending transactions and you will forfeit any balances associated with special funding arrangements;
  • we may suspend, limit or terminate your access to or use of our services, websites, software, systems (including any networks and servers used to provide any of the services) operated by us or on our behalf or some or all of the services;
  • you will remain liable for all outstanding obligations under this user agreement related to your account prior to closure;
  • we may keep your account information in our database for the purpose of fulfilling our legal obligations; and
  • we may retain your electronic money after closure to the extent and for the time we reasonably require to protect us and/or any third party against the risk of reversals, fees, fines, penalties and other liabilities of whatever nature. After this time you will be able to withdraw any undisputed funds that we are holding. Please Contact Us if you have any questions about funds held in your account on closure. If you are the legal representative of an incapacitated or deceased account holder, please Contact Us for assistance.

Advantages of this clause include:

Retention of data after termination limited to the purpose of legal obligations and necessity of retention.

Disadvantages of this clause include:

No guarantees that data would ever be deleted.

 

Real-life clause on termination consequences in a contract against remuneration

Context: the clause relates to an API for creating applications to set up a web shop. The applications are available on a platform, and exchange data and share revenues with this platform.

Consequences of Termination

Upon termination of the Terms: (a) each party shall return to the other party, or destroy (and provide certification of such destruction), all property of the other party in its possession or control (including all Confidential Information); (b) Developer shall immediately cease displaying any [X] Trademarks on any website or otherwise; and (c) all rights granted to Developer hereunder will immediately cease, including the right of Developer to access and use the [X] API.

Advantages of this clause include:

Data that qualifies as Confidential Information will be deleted.

Disadvantages of this clause include:

No guarantees that data other than Confidential Information would ever be deleted.

 

Model clause in a contract against remuneration

Context: this clause aims to terminate any use of Customer Data after contract termination (other than as required by law or to safeguard the service provider’s legal rights), and ensures that Customer Data is deleted after termination. Aggregate insights may be retained and used in the same manner as during the Agreement, provided that these cannot be linked to the customer.

The clauses assumes that Customer Data and Business Insights have been defined; the model clause on scoping can be used for this purpose.

After the termination of the Agreement, we will only use your Customer Data insofar as required to defend our legal interests or as required under applicable law. Business Insights related to you, or any statistical data inferred on the basis of your Customer Data, may still be used by for the same purposes and to the same extent as during the Agreement.

Your data will be retained by us only as long as required by applicable law, including as may be required to defend our legal interests. After the expiration of this period, your data will be irrevocably deleted.

 

 

General observations and points of attention

Clearly, the horizontal concern for the financial sector is that financial data is normally considered to be (very) sensitive data, as a result of which data sharing should be governed in a relatively inflexible way, with transfers of financial data only being permissible with the authorisation of the persons concerned and/or with a clear legal basis. Even in those cases, account has to be taken of the fact that transactional data generally involves two persons (the payer and payee), and that consent cannot always be obtained on both sides. For that reason, contractual safeguards and assurances should be common.

Nevertheless, the examples above show that contractual safeguards for use, onward dissemination, and liability for loss or retention after termination are not as common as might be expected.  Considerable differences in equality/parity/fairness can be observed between contracts throughout this sector. Most of the contracts analysed above are general terms of service, drafted unilaterally by the platform operator or service provider from a position of relative power, and from which exceptions are rarely granted. This explains why some of the analysed agreements aim to maximise flexibility for the service provider. This is not insurmountable in cases where the flexibility only pertains to data use by the service provider, assuming that the service provider itself is a trusted party. Onward dissemination to third parties however should always be a matter of user decision/user control, and this clearly remains a point of attention.

Compared to other sectors, more references are made in the contracts to legal frameworks (applicable legislation) and legal obligations, notably in the framework of know-your-customer (KYC), anti-money laundering (AML) and tax compliance legislation. Users should be aware that when using certain financial services, their data may be shared with authorities, particularly for tax investigation; and that the choice of additional service providers therefore can also expose them to additional (potentially non-European) authorities.


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