[micks56]

> I am not a lawyer. This is not legal advice.

Ha. If you were a lawyer you would know that saying "this is not legal advice" doesn't actually turn legal advice into non-legal advice.

The whole post is legal advice.

EDIT: I think that is funny that I get downvoted for this. The writer very early on in the post demonstrates that he doesn't have legal knowledge, yet he advocates people using his language in their own contracts.

Some of the clauses don't protect how the writer thinks they do, if at all. Parts of the analysis/summary are flat out wrong.

For example, the legal costs clause is one of the scariest in the post. You really want to allow the other side to recover their legal costs if he sues you? These things work both ways.

Just look at the balance of potential damages. Your potential damages are for the unpaid contract price. That is it. The client's damages if your software fails could be millions of dollars in tort liability. And you are going to pay their legal fees when they hire the best contingency lawyers around and win?

By the way, defense attorney's can't take cases on contingency basis. If you are being sued you will have to pay your own way with the hope of collecting afterward. The legal costs clause created a nice incentive to go to trial for the opposing plaintiff.

Be careful out there.

[sbalea]

Which is why you don't enter such a contract yourself, you do it via a corporate entity. If you lose and are liable for millions of dollars just close down the shop. You can always open another entity later, you can even re-hire your employees if you had any. I'm not a lawyer, so this might be complete bullshit, but it seems to me this is exactly why corporations were invented.

[micks56]

You are correct, but there are some gotchas, too.

1. Hopefully you incorporated in your state and actually have the protection, not as a Delaware LLC, which might not help you. Hopefully you paid the yearly fees and did the registration requirements, too.

2. Declaring bankruptcy doesn't just let you walk away. The opponent will get your assets. Did you claim your computer as a deduction? Other side could get that. They can get any corporate assets up to the judgement amount. If you have regular income from licensing agreements they can also get that. And so on.

3. Declaring bankruptcy isn't without its consequences. Senior officers of companies that declare bankruptcy can be prohibited from serving as a senior officer or founder of other/new companies. In some instances it will show up on your personal credit report.

4. Hopefully you don't have a business line of credit that you made a personal guarantee on. Or friends and family loans.

And so on.