I am an independent web application developer and a legal issue has arisen for which I am hoping to gain advice. I recently developed a database application for a new client and have received signals from them regarding their feeling about my liability for the project. They have hinted that I should be liable for any problems that might arise with the system (which is being marketed to professionals and contains non-financial, but still sensitive data). I had already signed a fairly thorough NDA before starting the project, but after I submitted a large invoice, they presented me another document that stated I was to deliver a reliable and accurate system, and that they have full ownership. This seemed reasonable to me, as I agree that they completely own the system and code. However, after signing, it was at this point that the client hinted about my liability should a problem arise. Then, I received confirmation that he is presenting the document which I signed to an attorney to ensure that it is thorough. My fear is that he basically wants to ensure that he can sue me if something goes wrong with the system.
The portion of the document to which I am referring simply states that I agree to deliver a reliable and accurate system, and does not state anything regarding my actual liability if something were to go wrong with the system. Also, I did not ask them to sign any disclaimer regarding my limitations of liability. As we all know, most software, when you agree to install it, includes fairly thorough wording that obviates the software company from any liability that might arise from using the software. Should this type of agreement, in some form or fashion, be part of a standard contract into which I might enter with a client? Given the document that I did sign, what recourse could this client have, should there be a problem that arises with the software? If any additional info is needed to thoroughly answer the question(s), I will do my best to provide it.
Typically, I have a personal and trustworthy relationship with my clients. I perform honest work and often an actual contract has not been necessary -- I develop code for a client, invoice the client, and then they always promptly remit payment. This process, which might seem risky to others, has worked well for me in my geography. However, this situation has made me re-think the process a bit, at least regarding self-protection in terms of liability disclaimers.
Any and all input regarding this situation and/or your past experiences is appreciated.
