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by biot 4151 days ago
Say you have the best client in the world (perhaps your own brother) and you do $5K worth of work. A few years later the company is acquired, gets all new management, and now your $5K software is supporting a $500M/year business. Some noob in IT blindly updates all the servers without testing compatibility and your software breaks.

A week later you get back from your totally offline trek through Nepal to find angry voicemails and emails from the organization now depending on your software, and you're now facing a $10M lawsuit from the new management for losses incurred due to your software breaking.

Long story short, your liability isn't limited to the relatively small amount you were paid for the work. And because you didn't have a contract, you could be held personally liable and risk losing your house, retirement savings, etc.
2 comments
lancewiggs 4151 days ago
Under this scenario you 1: either laugh at them or keep quiet, but have new understanding of how much the problem is worth to them, then 2: offer to fix it with a project - priced at a number that reflects both your inconvenience and their need. Whatever that price is, it will be a lot cheaper than lawyers at dawn against someone who has no ability to pay. Meanwhile the acquiring company should have done their Due Diligence on the software and these sort of loose ends would have been tidied up or deliberately ignored as part of that process. I do not believe in contracts for small gigs - but an email chain is good to have. If you then perform work, send invoices and they pay you there is a good enough contract in place.
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philmcc 4151 days ago
This is sort of terrifying. What kind of clause prevents this potential outcome?
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lewi 4151 days ago
Not a lawyer and this isn't legal advice.

I'm fairly sure it's called a limited liability clause. They are literally everywhere. Ski resorts, adventure parks, paintball facilities, and even pools. There are many ways these are worded. Keep an eye out anytime you partake in a service/activity where there is a whiff of danger.

Edit: In terms of asset protection (losing houses and retirement) an LLC, GmbH, or Pty. Ltd. will limit loses to assets owned by the company.

Again talk to a lawyer.

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