[citricsquid]

If the decisions made by Heroku to misrepresent the product were made prior to the Salesforce acquisition (December 2010) do the founders of Heroku have any liability? Would this sort of thing be a consideration with an acquisition?

[chc]

I don't believe any decision was made to misrepresent the product. The product just evolved and the product documentation didn't. The end result is the same — the product was advertised with inaccurate claims — but this appears to be more a case of neglect than a deliberate misrepresentation.

[jacques_chester]

It's not a criminal matter. Mens rea -- "guilty conscience", the intention to act unlawfully -- is a component of crime. But it's not necessary for lots of civil legal matters.

For example, if we both enter into a contract, you can hold me to my end. If I fail to hold up my end without intending to fail, then you can still insist that I make right or seek remedies for my failure.

(IANAL, TINLA).

[chc]

That all sounds right to me, but I think you've mistsken my meaning. The point wasn't that they lack mens rea, but that the decision to misrepresent the product can't have been made before the acquisition because that decision was never made at all. It was misrepresented by reality gradually changing out from under initially truthful statements.

[jacques_chester]

You don't have to decide to misrepresent in order to be misrepresentative. If your material is wrong, it's wrong, and depending on the jurisdiction you may be on the hook.

Ridiculous? Well consider that it gives a strong incentive to ensure that claims made to customers are somewhat accurate. Reducing the cost of caveat emptor makes society richer by reducing transaction costs and so encouraging trade. Sellers have a strong informational advantage over buyers; in general the cost to them of making a correct statement is much lower than having each customer having to find out the truth independently.

Not that this is the purpose of torts law, which evolved mostly to fill glaring, unjust gaps in the remedies of the older forms of common law. But that is the social and economic function that it has come to serve.

(IANAL, TINLA).

[drucken]

It would have been an issue for the acquirer before or during acquisition, if it were present at the time, of course. Some, perhaps many, investors into startups also insist on liability insurance.

But the founders of Heroku have no more liability than the company in control of its assets, which in almost all cases would be some sort of Limited Liability vehicle.

[pyre]

I think the parent was asking if SalesForce could pursue the Heroku founders for some sort of liability (i.e. misrepresenting the company during the purchase).