Grid computing has been touted as an emerging revolution that will transform the enterprise information technology landscape by enabling organizations to share access to computing systems and data across organizational boundaries. The promised benefits include increased utilization of otherwise idle computing systems, and sharing data between organizations in a seamless but secure fashion. If these promises are fulfilled, grids can enable business partners to create virtual organizations with unique competitive advantages that will be difficult to imitate. However, there are a number of technical and business challenges that must be overcome before the benefits of grid computing can be realized. In particular, this paper will analyze how contractual issues and government regulations can impact grid computing projects.