How A Software Developer Sabotaged His Own Business

By | Software Agreements, Software Lawyer | No Comments
software development agreement

How risky is your software development agreement? Will you get sued because of it?

One of the most common mistakes app developers make is to write their own software development agreement. This typically involves copying (stealing) from someone else’s copyrighted agreement and rewording the contract into what the developer mistakenly believes protects him.

I recently reviewed one of these do-it-yourself software agreements where the developer “borrowed” (stole) the agreement a large company uses to hire developers.

Guess what…the company’s software lawyers drafted that agreement to protect the company, not the developers.

Although there were lots of legal grenades in this developer’s patched-together contract (including who owned the code), probably the most devastating part was the non-compete clauses.

This developer was freelancing using an agreement where he agreed not to do projects for his clients’ competitors for three years. And he also agreed not to do any development projects within the geographic areas his clients did business.

If you were going to agree to not work for three years for clients in most parts of the English-speaking world, chances are you’re going to want to get paid a lot more than this developer was asking in his amateur contract.

Now, perhaps the software developer won’t get sued for his numerous violations of the app development contracts he’s signed. But would you bet your business on that type of senseless risk?

Instead of being a cheapskate by trying to save a few bucks on the front end, the developer should have retained an experienced software lawyer to prepare a custom software development agreement template that fit his business and protected his interests. And if something unique came up for a particular project, have the software attorney modify the development contract’s language to reflect that uniqueness while protecting the developer.

Why An Affiliate Deleted 13,164 Tweets Today

By | Internet Lawyer, Website Lawyer, Website Legal Documents | No Comments

affiliate disclosure and tweet deletionI just watched a large Twitter account delete over 13,164 tweets because the account holder didn’t use an affiliate disclosure when promoting others’ products and services in exchange for commissions. The tweet deletes were a c.y.a. move designed to limit legal liability exposure.

That’s a shame because the tweets contained really good content, i.e. he gave out a lot of valuable content in the process of affiliate marketing.

And the sad thing is, he could have fixed the issue for any tweets he wanted to save. It would have taken just one call to an experienced Internet business lawyer to learn how to do it.

Affiliate Disclosure And Material Connections

Since December 1, 2009, Federal Trade Commission (FTC) guidelines have been clear that material connections — including affiliate status — must be disclosed so that the prospective purchaser has the key facts necessary (including your potential bias) in order to make an informed decision whether or not to purchase a recommended product or service.

This covers all of your marketing online and offline to U.S. consumers.

Some online marketers mistakenly believe they only have to comply when promoting on their websites by using the right website legal documents.

That’s not true. Disclosure requirements cover emails, social media (e.g. Twitter, Facebook), etc.

Marketing To The U.S. From Other Countries

What’s interesting is a fellow marketer on Twitter responded to the guy deleting tweets by saying the FTC’s rules and regulations didn’t apply to the marketer because he was based in another country.

That’s another mistaken belief.

If you’re marketing to U.S. consumers from anywhere in the world, the FTC has the ability to go after you for false or deceptive marketing practices.

Does the federal government go after foreigners for bad marketing practices? Absolutely. In fact there have been spammers sent to federal prison for years for violating U.S. law even though they never stepped foot in the United States prior to being arrested in their home countries and extradited to the U.S. to stand trial.

Material Connections Are More Than Just Affiliate Status

And remember, it’s more than affiliate status that needs to be disclosed. It’s all material connections that a prospect should know about.

For example, if you’ve reached an agreement with another marketer to promote to each other’s Twitter followers, Facebook friends, or email lists, that material connection should be disclosed.

Does Your Website Privacy Policy Protect You In Other States And Countries?

By | Internet Lawyer, Website Lawyer, Website Legal Documents | No Comments

website privacy policyIn the past, a U.S. business typically needed to be concerned about the laws of the state(s) where it did business (e.g. where the company was set up) and federal law. That’s not the case today if your business is online – with or without a website privacy policy.

For example, California and the European Union may attempt to apply their laws and regulations to your business…even if your company isn’t based in California or Europe. Both have strict privacy laws and regulations that may affect your website’s legal protection.

In fact, the EU adopted an 80+ page data protection regulation that went into effect in 2018. And California has enacted a new law that’s similarly complicated…and it goes into effect in 2020.

In other words, if your site has a website privacy policy that’s a couple years old, chances are you haven’t even addressed these potential threats to your business.

Now, you could ignore these risks. And maybe a government agency won’t come after you. And you won’t get sued by someone claiming you’ve violated their new legal rights.

Of course, the prudent thing to do is have a skilled Internet business attorney review your website for compliance issues and update your site’s privacy policy, terms of use, and other legal documents. As Benjamin Franklin said, an ounce of prevention is worth a pound of cure.

Software Development Agreement – Scope of Work

By | Software Agreements, Software Lawyer | No Comments

Software Development Agreement - Scope of WorkWhether you’re the developer or the client, the scope of work in your software development agreement is essential to performance by the other party. If the deal falls apart during performance, an app development lawsuit is time-consuming, stressful, and expensive.

Also know as a “statement of work,” your app development contract’s scope of work should be as detailed as possible as to what specifically is being done as part of the development.

For example, does the project include beta testing and revisions to the application prior to release? Many app development projects fall apart when the parties start fighting over whether something omitted from the contract is included…and whether or not the developer should be paid more if that work is performed.

Related Article – The Ugly Truth About Software Development

In addition, the software development agreement scope of work should specifically exclude what is not part of the scope of work that the other party might mistakenly believe is included.

For instance, it’s common for software maintenance and support to be a separate issue from app development. And the developer expects to be paid for such maintenance and support because time and expertise are involved.

On the other hand, the client may expect at least an initial period of support and maintenance to be included (e.g. 90 days) post-release as part of the development deal.

Whether it’s included or excluded is part of the negotiations that should occur between the parties. But the issue should be resolved from the outset instead of getting into an argument about it after the app is released.

A good software lawyer can prepare an app development contract that’s right for your project. And if you’re a developer, a template contract can be created for you to use in multiple deals with different clients as part of your software development business.

Are You Collecting Biometrics From Your Texas Employees?

By | Business Contracts, Business Lawyer | No Comments

texas employee biometrics fingerprint scanIf you’re collecting Texas employee biometrics, be sure to comply with the state’s biometrics privacy law.

Types Of Texas Employee Biometrics Data Covered

  1. fingerprint;
  2. retina or iris scan;
  3. voiceprint; and
  4. record of hand or face geometry.

For now, the most common of these is fingerprint scans. Although as the price of biometric tech drops, you’ll see more of the other types of data collected too.

Fortunately, Texas’ biometric law isn’t as strict as the Illinois statute. For example, Facebook is being sued in a class action for $35 billion for allegedly violating Illinois’ biometric privacy law.

State Attorney General Enforcement

In contrast, Texas doesn’t allow employees to bring a civil suit against an employer for violating the state’s biometric privacy statute. Only the Texas Attorney General has the right to enforce the law against employers (and others).

However, if an enforcement action is brought by the state, there can be a pretty hefty penalty of $25,000 per violation. Arguably each employee’s data would constitute a separate violation. That can add up quickly.

Fix Your Employment Agreements

So, if you’re collecting employee biometrics (or workers based elsewhere who are covered by Texas law), you’ll want to make sure an experienced business contracts lawyer addresses the state’s biometrics law in your employment agreements and/or other employee-related documents.