Professional Liability as a business entity...

[hockley91]

Hey everyone!

 

Got a legal question for all of you. I was talking to a lawyer friend of mine about whether to incoporate as an LLC, or just be DBA entity. I told him I really don't have much liability with anyone I contract with as a freelancer, since what I do doesn't impact the whole project in a serious way.

 

However, after a day, my friend told me potentially, and maybe really stretching this, a client, might sue an architect or developer for the project not looking exactly like the rendering that was presented.

 

I explained that a "disclaimer" is usually a solution to this problem, but he explained that "disclaimers" do not really protect you. So, I explained that maybe that I could put something like that in a contract?

 

Which also leads me to this question. How many of you use contracts for your renderings. Currently, I do not.

 

Anyone?

 

Hockley91

[C.Vestal]

Not worth the risk. Set up an LLC.

It is easy and cheap.

 

http://www.parcorpservices.com

 

I used this company in 97 when I set up my company. I had 2 attorneys check this out before I sent the $. They file everything correctly and the attorneys I had check it out, even use them from time to time! (I am by no way affiliated with these guys) I am sure by now there might be some one locally that can provide a similar service.

 

The registered agent is the only hitch. If you have an attorney who will do it cheaply, you are in luck. Otherwise the 149/year is fair. It is really up to you who is your agent. ( that is all the further I am going on that)

 

Your disclaimers... If they let you sleep at night, good for you. Not here. We do a lot of business here for attorneys. There is always a way around them.

Bottom line... LLC it!

 

How many of us use contracts??.... every time here. There is a popular saying. "better to have it and not need it, than need it and not have it. My personal experience after all these years, you will need it.

 

I do not think you have to worry much about clients suing you for poor work. They will just no use you again, and possibly not pay. And before long you will not have a company, therefore no worry about your company getting sued.

 

My 2c. I have been incorporated before Max, that is right, 3DS on DOS!

 

good luck,

[mbr]

I don't think you need to worry, unless you are doing huge projects or dealing with nasty professions (in the sense that they will use lawyers). You don't need an attorney to get an LLC, you just fill out the paper work and file it, just as when you register your business (no LLC here, but there will be soon, and I spoke to the guys at city hall. Me: "I will need a lawyer for my LLC?" Him: "Ha, ha, I'll bet it was a lawyer that told you that!" Me "Yup" Him "No, you don't need a lawyer to do it").

 

I will say that contracts are simply pieces of paper. It's nice to have, but it by no means guarantees anything. I had a lengthy contract with a developer that screwed my out of a substantial amount of money, but I would not have won anything (I spoke to lawyers in length about it, but his LLC had no assets, meaning I had nothing to gain). Unless it's a clear case of none performance or not receiving payment, it gets tricky. My guy bailed at about 85% (I had gotten paid up until then), so there were so many parts that were not completed, etc., etc. A real mess.

 

Don't do work without a check in hand! They don't pay, you don't work. I use a contract on everything that is not with an old client that I trust. It's painless, for the most part, and most people expect it.

[William Alexander]

I will say that contracts are simply pieces of paper. It's nice to have, but it by no means guarantees anything. I had a lengthy contract with a developer that screwed my out of a substantial amount of money, but I would not have won anything (I spoke to lawyers in length about it, but his LLC had no assets, meaning I had nothing to gain). Unless it's a clear case of none performance or not receiving payment, it gets tricky. My guy bailed at about 85% (I had gotten paid up until then), so there were so many parts that were not completed, etc., etc. A real mess.

Yes, pieces of paper. Don't overlook the concept that way before the legal aspects it's a means by which to communicate the terms mutually between parties. Very important because people have very short memories when it comes to money and perceptions change-quickly without a contract.

 

mbr as far as this guy- no harm no foul, collecting future damages (non completion) would be tough without deliquency of payment. The other question is would it have cost you more for legal fees than the sum due?

 

Did some work for a lawyer's kennel club, had her review the contract from a legal standpoint..."If I don't like what you do-I'll sue your ass". It was said in good humor but you get the point. And she teaches law and legal morality at a seminary;)

 

WDA

[Sawyer]

When it comes down to it a contract is a record of intent to perform work. Yes everyone has a short memory and a contract just records what you were meant to do and get paid. If someone does not want to pay you they wont. Every architect I have ever talked to is owed money by a client and unless a lien is filed they client may never pay.

 

I haven't heard of any cases where an illustator was sued for misrepresenting a job but I imagine it has happened.

[hockley91]

Thanks for everyone's responses so far...

 

It's something that I've been thinking about. That's why I posted this. I don't know of any reason to want to sue an illustrator, but I wanted to throw it out there just to see if anyone has experienced it, or a similar situation.

 

Do any of you offer disclaimers in your contracts to cover this? Or do you just tell the client that, or does the client cover this? In my expereince, the client has alway's covered this area, since I am working through them (usually an architect or developer).

 

Hockley91