I have been reading a lot of thing where people threaten to sue the hosting companies. Well if i put everything in the ToS and they try sueing me off of something that was covered in the ToS, is it possible for them to have a solid case?

Note that anyone can initiate a lawsuit against you, however this is different that actually going to court and/or winning a case. In other words, your TOS will not prevent people from filing claims, though it may help you in winning.

You can put a whole lot in the TOS however this may not save you. If you have any concerns about this, you need to talk with a lawyer regarding your interests. Failure to do so may end up costing you more in the long run. People always call lawyers *after* the fact, when they should be calling them first. Think of it like the preventive care at the doctor. You could wait until your organs cease to function at age 35, or find out what you need to do to avoid that in the first place.

how much experience do you have with hosting?
frankly most sites dont generate that much income. so if you mess up or kill something and the client loses income how much are they really going to lose?

and in a court they will then ask the client how hard was it to move to another host and be up and running within a week?
and considering the nature of the loss, if any, is it verifiable?


most running higher end income sites have their own servers..

lastly,

if they can prove you killed something worthy of a settlement they will most likely need an attorney to do it.
i doubt any attorney would work on a marginal case for contingency.

and of course they can always get blood from a stone, an attorney will look for the cash cow to milk before moving forward.

in other words put up a good tos and dont sweat it

1. Incorporate or get some kind of business identity to operate under so you're not personally liable for anything.

2. Talk to a lawyer. If you don't have a regular one ask friends, I'm sure someone's had a good experience.

3. Get the lawyer to review and revamp your TOS. Even copying from existing sites isn't necessarily good considering those sites have TOS and AUP attuned to their operating area (State / Province).

4. If someone files a claim against you, see 2.

-Matt

Look like great suggestions to me. I think I'll use some to improve my business practices. :)

I spent at least 50 hours and at least 10 books reading about law, to make sure that I cover all i want for the business that I may be starting, i suggest you do the same. read and read, and if you can get a lawyer to comment.

yes, incorporate definently

court is such BS, i had it last week :mad: :mad:

1. Incorporate or get some kind of business identity to operate under so you're not personally liable for anything.

That's not neccesarily protection anymore. Nowadays, people aren't just suing the company, but are also suing the HEADS of the company.

Though, this doesn't work in all circumstances. Getting a local business license may work while your small, but eventually your going to need the protection that comes with an incorporated company (what protection is left).

if your corp gets sued they will sue you too

a corp is only a financial veil to avoid taxes

thats the facts

What happens when the client is international?

Originally posted by miami_g
if your corp gets sued they will sue you too

a corp is only a financial veil to avoid taxes

thats the facts

What???

From the IRS:
Corporate tax. Corporate profits are taxed to the corporation. If the profits are distributed as dividends, the dividends are taxed to the shareholders.

Then if you draw a salary or receive dividends from the corp, you also have to declare this as income personally. You're taxed twice... The exception is LLCs and S-Corps. But they still pay taxes just not twice.

Corporation = legal entity. Basically the same abilities to enter contracts etc. as a sole proprieter. The difference is personal responsibility. The holder of corporate stock is only responsible up to the amount invested into the company.

Where people run into problems is filing for incorporation and then not running it properly. The revenue/taxation and/or legal system can declare an improperly run corporation liable due to "individual's own professional errors".

list in you TOS that the venue of any case against you has to be in your home state/province/county etc...

that way the person has to either come to your area to file or get a lawyer to do it for them.

My TOS contains the clause that clients of mine agree to bound by Quebec law, and any action against my company must happen in the Municipal area of Laval, Quebec.

So any court action from any other court will recieve a letter saying sorry no juridiction.

And yes that is from a lawyer, he was the one who suggested it.

the advantages i use a corp for

auto lease , gas, auto repairs and insurance for the leased car

and

group helth and dental

occassional dinners with clients

golf and entertainment expenses

see the way that works is you spend the same 1000 per month on all this stuff via the corp

but at the end of the year those are legit write offs, ie no taxes

take that same 1000/m spent privately and you pay tax on 12 k

depepnding on your tax bracket that is easily 2k in your pocket.

those are the only advantages i see in a corp but they are
real and very tangible


g

I dunno but 90% of that "I will sue you" crap is just threats and means of blackmail. People ethink they get better leverage if they say that. If you really do your best to accomplish your job and people still say that then let them sue...

Those situations always occur cause people cannot conduct business properly, both the host and the client that is. I screwed up really bad with my business once and noone sued me or even talked about sueing cause I explained myself with honesty and stood to my mistakes like a man.

Just my 10 cents for you to think about.

Originally posted by miami_g
the advantages i use a corp for

auto lease , gas, auto repairs and insurance for the leased car

and

group helth and dental

occassional dinners with clients

golf and entertainment expenses

see the way that works is you spend the same 1000 per month on all this stuff via the corp

but at the end of the year those are legit write offs, ie no taxes

take that same 1000/m spent privately and you pay tax on 12 k

depepnding on your tax bracket that is easily 2k in your pocket.

those are the only advantages i see in a corp but they are
real and very tangible


g

check Federal laws, in Canada most of the things listed above apply to non-corps as well, as long as your business is Registered in the provice you live/work in it is write off time.

Being a corporation will not protect you from law suits in hosting. Same with web design/development. Being a corp doesn't help any professional service business (e.g. engineer, lawyer, accountant, doctor etc). And it's very hard and expensive to get professional liability insurance for a host or web designer.

A well written TOS (have a lawyer look it over) can help as a defense in court but it won't stop someone from suing you.

>And it's very hard and expensive to get professional liability insurance for a host or web designer

That wasn't my experience. It took 1 phone call to the insurance co. He was out the next day, and we were covered a few days later. It wasn't all that expensive either. Maybe it's changed in the past few years. Maybe it was because I already had a relationship with the insurance co.

Edit -
After I posted this I got to thinking... Are the majority of webhosts running without insurance??? That thought is pretty scary. Insurance is one of those necessary evils that businesses need.

Another thought about lawsuits... Webhosts often try to make themselves appear bigger than they really are (except the bigs one's that try to appear small and personable). People love to sue big corporations. They don't even think twice about it. Combine that thought with the no insurance one above. How do people sleep at night? Also taking this same thought a little further if a potential customer asks about insurance think twice before answering. Why are they asking? Insurance = bid corp = deep pockets = lawsuit = settlement???

Web hosting is normally a mask of reality business. You don´t know really how their offices look like or who´s behind the operations (except for those big ones). You just know there´s a group of people helpful behind in case you have problems with the service.