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Buachaill, Barrister
Category: Law
Satisfied Customers: 10955
Experience:  Barrister 17 years experience
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Someone wants to amend my terms and conditions to insert a

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Someone wants to amend my terms and conditions to insert a few words at the beginning of the clause the limits the extent of my liability. What they want to add is:
10.2.2 With the exception of a breach of intellectual property rights (for which liability shall be unlimited), ...
This is ringing alarm bells with me. The potential client claims I should have insurance for such an eventuality - and I do, but it's not unlimited. Am I right to be concerned, or does this have a specific legal meaning in this context (meaning more "unspecified")?
1. Can you better explain the situation. What are the Terms & conditions from? what do you do? What business is involved? What intellectual property rights does the business or the subject of the contract have? What client is requesting this change and for what reason?
Customer: replied 2 years ago.

Terms and Conditions are my terms and conditions of supply - drafted by a solicitor about 18 months ago.

I'm a technical author - I document software (user guides, online help and so on). The software I'm documenting in this instance is supplied completely separately - I will be created a user account so I can see it, but do not have any rights to it.

I'm not sure why this change is being requested... in terms of my end client, I can't see any intellectual property other than that in the documents I will be producing and their working practices as described to me. In terms of the software provider, my client may have an agreement with them about not disclosing details of how to use the system - I don't know - so I suppose I could theoretically be in breach of their intellectual property rights if I inadvertently sent a draft in an email to the wrong person.

What I usually see is a requirement from a client to have professional indemnity insurance in place to at least a specified level (usually £1m, but occasionally £2m or £5m). It's the word "unlimited" that is bothering me...

2. You are right to be worried. This clause 10.2.2 is effectively shifting the risk of any liability in relation to the production of the software guides on to you, as essentially, it is only really for breach of intellectual property rights that a claim could arise. The whole raison d'etre for what you produce - document software - is the intellectual capital and property that is produced. So if you infringe someone else's or there is some error or loss in relation to any of the basic document, you will end up paying up. So this clause really is key in any agreement in relation to document software. So, I would advise you not to accept unlimited liability for it. This could be ruinous as whatever insurance cover you hold is not going to be sufficient to cover unlimited liability. So I would not work for this client on this basis. Shared liability or liability in a certain amount or each party bearing part of the risks of loss of intellectual property, but not all unlimited liabilities. This could bring your business to a quick end if there is some claim for intellectual property breach.
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Customer: replied 2 years ago.

Thank you... I'd rather walk away as no work is worth this risk.