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http://ssrn.com/abstract=967343
 
 

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Negligent Entrustment Liability for Outsourced Data


Michael L. Rustad


Suffolk University Law School; Stetson University - College of Law

Thomas H. Koenig


Northeastern University


Journal of Internet Law, Vol. 10, No. 10, p. 3, April 2007
Suffolk University Law School Research Paper No. 07-19

Abstract:     
American financial services companies, health care facilities, and software producers are increasingly outsourcing data handling to low wage nations. Companies electronically transmit the personally identifiable information of millions of Americans to back office operations (BPOs) located in countries such as India, China, the Philippines, and Russia. Companies can easily delegate non-core operations to an offshore data hub, but it is unlikely that these firms will be permitted to outsource their legal responsibility for reasonable data security. American companies are vulnerable to being held jointly and severally liable for transmitting data to insecure back office operations under a theory of negligent entrustment. This article explores the potential liability of data handlers for negligent entrustment of outsourced data.

Number of Pages in PDF File: 10

Keywords: tort liability, negligence, damages, international business transactions, information security, negligent entrustment

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Date posted: March 7, 2007  

Suggested Citation

Rustad, Michael L. and Koenig, Thomas H., Negligent Entrustment Liability for Outsourced Data. Journal of Internet Law, Vol. 10, No. 10, p. 3, April 2007; Suffolk University Law School Research Paper No. 07-19 . Available at SSRN: http://ssrn.com/abstract=967343

Contact Information

Michael L. Rustad (Contact Author)
Suffolk University Law School ( email )
120 Tremont Street
Boston, MA 02108-4977
United States

Stetson University - College of Law ( email )
1401 61st Street South
Gulfport, FL 33707
United States
Thomas H. Koenig
Northeastern University ( email )
Boston, MA 02115
United States
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