The Unique Needs of Software Contracts. Why Talking To Google May Put Your Business At Risk.

Software Start-Ups have many unique legal needs that can create enormous risk for entrepreneurs venturing into this world. As a software developer and practicing attorney, I have helped my software company clients navigate through these top 3 issues:

  1. Are you using contractors to do software development?
  2. What liability do you have if your software doesn’t work or contains errors?
  3. What are your data collection practices?


Most software development is done with a global team of workers. But, what risks does this create for your company? Is it clear who will own the final product or key components? Are your developers using code or modules from other software that might create liability for you? Do you know where your client data is being stored?

Software bugs:

All of our critical systems have software that runs them. There are some systems where a bug is okay (fruit slicing game) and systems where we will not accept errors (airplane navigation). Where does your system fall within that spectrum? What are your client expectations? Are you liable if your software doesn’t work as expected or contains errors? For example, if your software is used to calculate a loan balance and it returns a number that is too low, can your client sue you for the balance? What about other damages they might experience?

Data collection:

If you have client data, you have risk! Do you have the proper disclaimers, notices, end user agreements, and internal controls to meet all of the state laws where your users live? What about international users? Are any of your users minors? Where is your data stored? What cyber security plans do you have?

In my role as General Counsel for software companies, these are just a small number of the issues we must navigate through. As your company grows, these legal risks can derail all of your hard work. Find competent counsel now to get you on the right path.

Timothy D. Shields
Partner, Social Media Representation
Kelley Kronenberg-Fort Lauderdale, FL.
(954) 370-9970

DISCLAIMER: This article is provided as a courtesy and is intended for the general information of the matters discussed above and should not be relied upon as legal advice. Neither Kelley Kronenberg, nor its individual attorneys or staff, are responsible for errors, omissions and/or typographical errors – always seek competent legal counsel.