Contracting Conundrum: “Reasonable Security Measures”

In technology contracts between customers and vendors, it is common to obligate one or both parties to implement “reasonable security measures” to protect applicable data and information. Typically, the obligation is a function of risk allocation or legal requirements. The recently enacted (and more recently amended) California Consumer Privacy Act’s authorization of a private right of action against businesses that fail to implement reasonable security procedures and practices highlights the issue. But, what are “reasonable security measures?” And, which contracting party decides? The Market Speaks Often, technology contracts merely reference, but do not explain, reasonable security measures. A contract may require a party

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