Hot answers tagged liability
9
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 ...
6
TODAY was my business partner's last day at the company where we both have our day jobs. We are also in the "one foot in each boat" situation, and decided that one of us (him) simply needed to jump in and the other (me) agrees to take no cash from the business (or pitch in more cash when needed) until his needs are met.
I'll keep you posted, but I'm ...
5
One of you is likely over complicating things.
Hard to say which one, but my guess is with him.
His LLC is insured. He can also dissolve it easily, leaving you trying to collect from a vaporized entity.
Think long and hard about this one. Early interactions can be indicators of what future business discussions will be like.
5
I agree with Jason: Half-time attempts are unlikely to be successful because there's simply too much to do.
Every startup will take time to get ramped up to a profitable state. Take the plunge when you have enough personal savings to work on the startup for a while without worrying about paying your basic living expenses. Otherwise you risk having to quit ...
5
Software is licensed, and the terms of the license are usually written by the software creator (you), and as long as the recipient has done something positive to accept those terms, courts generally uphold them.
Realistically, you're pretty safe. You're not planning to be insanely negligent, are you? I didn't think so. So stop worrying about this and write ...
4
There is no company structure that is going to guarantee that your personal assets will be 100% safe in the event you are sued. Otherwise that would lead to unscrupulous people taking advantage of it to harm good citizens such as ourselves. You can't protect yourself 100%, but that shouldn't be a reason for you not to "get in the game". As a business and an ...
4
The typical IANAL disclaimer applies, regulations may also vary based on your location. If you need reliable advice, you should consult a lawyer.
Nonetheless, we can apply some common sense here. That's what's usually in the law too. I am assuming by "company" you refer to a distinguished legal entity.
Q1: In any case I would strongly recommend creating ...
3
Just asked my lawyer: protection against personal liability in injury lawsuits is the same - you're not personally liable for faulty products as long as you're incorporated. The difference is in personal protection against financial wrongdoings by the company (i.e. courts can waive protection in certain cases).
3
Possible risks for SaaS from top of my head :-
Getting sued/charged for
Loss of data / other problems ('Errors and Omission')
Accidental release of confidential info
Trademark infringement
Patent infringement
Copyright infringement
Employment legislation and tribunals
Miscelanious laws that you didn't even know about (e.g. if you have customers in Europe ...
3
Here is a US focused answer. Let's assume you have a contract without any clauses relating to liability (if there is not a signed contract there is likely at least some kind of oral contract so it amounts to mostly the same thing). In this situation, your only liability is for breach of contract, ie, if you don't keep up your end of the bargain.
There is ...
3
It comes down to jurisdiction, precedent, and fault.
There are some cases in which liability was waived and upheld in court. There are also some cases where it was not upheld. It depends who is at fault, how much at fault (the courts determine a percentage of fault for each party), and if there was any negligence on your part.
Having something in your ...
3
I don't think an NDA and a security breach resulting in compromised data is the same thing. What exactly does the NDA say?
I doubt that "transferring" the NDA to the company will put you out of the role - since you are the company and likely can be shown that you acted in a negligent manner, etc. I don't think negligence will be protected within a ...
3
I am not a lawyer, but I do sell software and have been doing so for 35+ years.
If you are in the United states and the people buying your software are in the United States, you can not disclaim all warranties in your license. Many states follow the Uniform Commercial Code (UCC) and if your state follows that law or you sell to someone in that state that ...
2
Tyson -
If you decide to form a business entity, please see:
Should I form an LLC or a corporation?
Why (not) Incorporate in Delaware? and Why not form an LLC in Nevada?, both of which suggest that you entity should be formed in Oregon.
Dana
Disclaimer: This post does not constitute legal advice and does not establish an attorney-client relationship.
2
Talk to other similar (successful) businesses in your area and find out how much they carry. Talk to your attorney and ask what they recommend. Check with your local county/city/state and find out what is required as a minimum.
Between those three you should be able to home in on a good estimate.
2
So you have a range of options for keeping control. These will vary by legal system and country but in general:
Write it into the rules of the company. Anyone else buying in has to abide by the rules.
Always keep 51% for yourself. Only make the remainder available at all times thus you have final say on all votes.
Have 2 classes of shares "voting and ...
2
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 ...
2
Get General Liability Insurance if you incorporate.
As others mention, your corporation might protect your personal assets, yet liability insurance helps cover legal and other expenses regardless of the outcome. Liability insurance for at least $2 million is not too expensive (certainly far less expensive than legal fees) and your corporation can claim the ...
2
Well, I am not a lawyer, but my understanding is that the liability protection is very similar.
I'm not sure what @dnbrv means by The difference is in financial protection. If that is in reference to business debts, LLCs will also provide you with limited protection against business debts. Maybe the difference is in what the cap is?
In real life things get ...
2
You have to keep a non-trivial amount of money in the LLC, or in the
event of a lawsuit, they will go after you personally
This is not entirely true. You have to have the company well-funded to be able to conduct day-to-day operations, but you don't have to keep any significant extra in the company over that. You can always infuse more cash into the ...
2
Answer is written assuming you're in the US. If you're elsewhere - laws are different and this may not be valid.
LLC's don't distribute dividends, unless they're explicitly electing to be taxed as C-Corp. Assuming your LLC doesn't make such election (not much sense doing LLC then anyway), the tax situation is different.
You're not getting salary or ...
2
What you can do is write up an ownership transfer agreement between you (the owner of the code) and the LLC. That way, the LLC then owns the Intellectual Property.
Take a look at Nolo Press (nolo.com) for boiler plate contracts for this sort of thing.
I know it may seem overkill (since you probably own 100% of the LLC) but it makes sense to fully transfer ...
1
If I'm participating in an instructor lead activity following the guidelines of your certification, my lawyer will want to go after your deeper pockets (Nothing Personal). This is especially true if the trainer has no insurance; they'll try and settle with yours.
If the instructors are private contractors (work at other gyms or offer private training) and ...
1
Gary is exactly right.
The thing is many jurisdictions have rules against limitations of liability, but those rules are often "open textured". That means they rely on ideas such as "reasonableness" or "fairness". A cautious drafter might worry that any disclaimer will prove to be invalid. In fact its rare to see a disclaimer that is carefully crafted to ...
1
That is the intention, I believe, as long as you don't act dishonestly. However, you should bear in mind that having a Ltd company doesn't mean they can't sue you personally. Anyone can sue anyone for anything.
For the PI it is where the clients/work are based, even if the contracts are governed by English law. The USA is more litigious and it is much more ...
1
You own a small business IT consulting firm. I assume this means that before you do business with anyone you sign a contract with them. If this is the case, then that contract controls and any ToS is more or less meaningless.
A ToS is useful when you have users or customers that you don't sign contracts with. For example, Google search is subject to a ...
1
I am sure that there are wonderful and legitimate reasons for him to want to only sign through his LLC. And I am sure that there are wonderful and legitimate reasons for you to want him to sign as an individual. I am not a lawyer nor do I play one on television, so I can't speak to those.
I do know that in many locations and industry a non-compete is very ...
1
I see that you are in the Bay Area, so it is important that you be familiar with what CA law is on alter ego liability. (Of necessity, Wikipedia is general in nature.)
The post Beware Your Alter Ego addresses CA law specifically. The following paragraphs are copied from that post:
<<<<<
Alter ego typically arises when a plaintiff sues an ...
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