Working on a contract here and have some question as to the standard liability clause that is in most contracts.
Is it reasonable, as a freelancer/consultant to have the client assume all legal liability for the resulting project, EXCEPT to accept liability (by me, the consultant) for negligence or willful misconduct?
I’ve been told that both “this is standard” and also that “the consultant should not accept any liability”.
Being a small operation (and sole-proprietorship) i’m hesitant to accept any liability, just given the financial potential implications. Also, i’m not building bridges or aircraft or anything, and don’t have professional EOE insurance, so kinda figure the acceptance of any sort of liability is just overkill and too risky.
At the end of the day, if someone decides to sue the company you’re working for you are going to get dragged into it. So if you can get a waiver of liability from the client, I would go for it. They may end up negotiating you down from that tree anyway. But go for the gusto if you can get it.
they are willing to accept all liability but want me to be subject to liability from negligence or willful misconduct. do you think that’s its OK to accept that?
I just looked at our MSA and it doesn’t have anything about negligence. Which, when it comes right down to it is fair…but it also leaves the door open for interpretation of the word “neglegence”.
I would wordsmith it so that they indemnify you for any and all actions brought to you by third parties. This means they pay your legal fees if you get dragged into an ugly litigation.
Also by writing off and approving the design they assume responsibility for anything that goes wrong.
I think it is fair to also limit your liability so thtt it doesn’t exceed the price of work already paid. That way the worse case is that you give back your design fee.
I really have nothing to add, other than the impression that lawyers rarely go after small fish if there are any deeper pockets involved, 80/20 rule kinda thing.
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Every proposal I issue includes a standard terms and conditions page. Over the years I have read, reviewed and saved hundreds of contract and purchase order terms and conditions. Mine are an amalgam of all of them, written in specific plain english.
My clauses pertaining to your question are:
Upon proven negligence (me) liability is limited to the value of fees earned on the project up to 12 months from date of last service performed.
(me) is not liable for nor may payment be withheld due to:
6.1 Failure due to financial investment, economic, project, performance or regulatory compliance;
6.2 Patent denial by attorney or examining body; patent, copyright, industrial design infringement;
6.3 The design is deemed inadequate or bad;
6.4 Third parties;
6.5 Manufacturing frustration;
6.6 (client) incurred costs on (me) data, paper or electronic;
6.7 Any event beyond (me) control.
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(me) is not liable for any error or omission due to (client).
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(client) agrees to indemnify and save harmless (me), its employees and contractors, from and against all claims, losses, damages, costs (including legal fees on a solicitor and client basis), expenses, actions, injunctions and other proceedings, made, sustained, brought, prosecuted, or threatened to be brought or prosecuted, in any manner based upon any allegation or claim.
Obviously, (me) = my company name and (client) = client company name. Numerous contracts I’ve read including indemnification clause within almost every term and condition line item. From various courses and trainng I learned that often these conflict with each other both in content, intent and applicability. Lawyers love that and feast on them. Intentionally I have only one omnibus indemnification.
