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I plan to sell software and add "the software comes with no warranty and should not be held liable for loss of data" and etc. I also plan to offer on-site training for the software. 'Support' will either be through a community forum or non existent (but there will be a solid manual). Perhaps I'll have phone support which can be bought, but I don't think I will.

How do I protect myself or the company from being sued? I cant think of any reason why I would, but that won't stop anyone from trying if something happens.

I never heard of a lawsuit over training, and I don't think refunds are a big deal (although traveling expenses may be). Do I have anything to worry about in my simple case? I'm planning a sole proprietorship, but even as a corporation I wouldn't want to be sued into the ground.

Note: My location is in Ontario, but I plan to train anywhere in Canada and the US.

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3 Answers

up vote 9 down vote

Nothing can stop you from getting sued. Companies get sued for idiotic reasons all the time, no matter what the contract said.

That said... something someone told me when I started Fog Creek Software was very helpful: "Deep pockets don't sue shallow pockets." Nobody's going to sue you if you don't have money, with the possible exception of the RIAA. It's ex-tremely rare for large/rich companies to sue small companies. Essentially, make sure your contracts are good (have a lawyer review them) and actually state what you intend, and then stop worrying about it.

This advice worked fine for ten years. The first time we got sued was after we raised $6 million in venture capital, and hiring the best lawyer in town was a rounding error.

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You've piqued my interest: why'd you get sued? Was it for Stack Exchange or Fog Creek? – Wyatt O'Day Apr 12 '11 at 3:15
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Some olympic-rowing brats I knew at Harvard claimed they invented "The Stack Exchange". – Joel Spolsky♦ Apr 12 '11 at 14:12
up vote 4 down vote

In my EULA I also include that the maximum liability shall not exceed the purchase price of the software. If it is inexpensive software you wont get sued - those kinds of lawsuits just don't happen. I sold a $900 software to big law firms many years ago. It had nasty bugs in the beginning and many hours of parallegal data entry was lost, but I never got sued. I did training and consulting along with it, got to know some big time lawyers and they told me that no one is going to sue a small fish like I was at the time. There is a lot of unjustified fear over being sued.

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Thats good to know. Did you write the EULA yourself? Do you suggest taking an EULA i like and add/remove what i want from it or is there more to it than that? You mean there is a lot of justified fear over being sued? ;) – Stu R Apr 12 '11 at 2:28
Good example why it never happens, but also a good example of a bad invalid eula in most countries. – NetTecture Apr 12 '11 at 4:29
up vote 2 down vote

Make your terms of service clear and fair. Offer reasonable but explicitly limited credits if people have issues with your software.

Treat your customers fairly and listen to them. Malpractice insurance companies are now sending doctors to school to learn how to listen - it turns out that a big driver in malpractice suits is "the doctor never listened to my concerns and questions" and when people feel like the doctor cared - even in the event of a mistake - they're much less likely to sue.

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