internet liability terms-of-service
For a website owner&#39;s ToS to shield him/her from liability, does it have to be written in terms of a proper legal entity, like an LLC?
<p>Suppose Bob and Terry Jones own the domain <code>example.org</code>, and are going to start a website called <code>ExamplePedia</code>. It will be a lot like Wikipedia: a non-profit, web 2.0 site, hosting collaboratively edited informational content, for the public good.</p>

<p>Since the Wikimedia ToS is available under cc-by-sa, it makes sense for Bob and Terry to copy it and make appropriate substitutions. But how?</p>

<p>Wikimedia's ToS explains that</p>

<blockquote>
  <p>"we" or "us" will refer to the Wikimedia Foundation, Inc.</p>
</blockquote>

<p>What do Bob and Terry put here? It seems like there are a few options:</p>

<blockquote>
  <p>(1) "we" or "us" will refer to Bob and Terry Jones</p>
  
  <p>(2) "we" or "us" will refer to example.org</p>
  
  <p>(3) "we" or "us" will refer to ExamplePedia</p>
</blockquote>

<p>Or maybe Bob and Terry should form a proper legal entity, like <code>ExampleWorks, LLC</code>, and use </p>

<blockquote>
  <p>(4) "we" or "us" will refer to ExampleWorks, LLC </p>
</blockquote>

<p>Now suppose something posted on ExamplePedia infringed copyright and the 
copyright owner wanted to sue.</p>

<p>Would (1) would leave Bob and Terry personally liable, even though the ToS clearly states that they only host the content, and the users are responsible for it? </p>

<p>Options (2) and (3) sound nice, but are they in any way legitimate? Surely
<code>example.org</code> and <code>ExamplePedia</code> don't become real legal entities, just because Bob and Terry own the domain name, and call their website a certain thing...or do they?</p>

<p>Is (4) the only way to actually limit liability?</p>

<h2>Liability of a Person</h2>

<p>LLC means "Limited Liability Company"; in the absence of such an entity (or equivalent) there is no "Limited Liability". A partnership, which is what you are describing, or an individual has <em>un</em>limited liability.</p>

<p>What this means is:</p>

<ul>
<li><p>An individual (operating alone or as a member of a partnership) is liable for their actions. They are responsible for the debts the business incurs (including those arising from legal liability) and must pay for them from their personal assets.</p></li>
<li><p>A company is liable for its actions, however, the members of that company are liable only to the extent of the money that they have invested.</p></li>
</ul>

<h2>Contractual protection</h2>

<p>A person (which includes individuals and companies) can attempt to limit liability by contract, however, there are limitations to this:</p>

<ul>
<li>Your liability is only limited against people who are bound by the contract; third parties (like an aggrieved copyright holder) are not</li>
<li>Most jurisdictions restrict limits to liability that can be made in consumer contracts and some B2B arrangements</li>
<li>You can't contract outside the law: if the law says you are liable then your contract that says otherwise is not worth a pinch of s***.</li>
</ul>

<h2>You are only liable for what you are liable for</h2>

<p>To have a liability, you have to have done (or not done) something that created a liability under statute, tort or contract. There are legal means in many jurisdictions that protect content hosts from copyright claims: <strong>but you have to do what the law says you have to do to avail yourself of them</strong>.</p>

<h2>"we" or "us" will refer to ...</h2>

<p>... <strong>has</strong> to be the person(s) that are running the business - if that is Bob and Terry Jones then that's what you write, if it is ExampleWorks LLC, write that. It cant be "example.org" because that is a domain name; not a legal person. It can't be "ExamplePedia" because wtf is that anyway?</p>

<h2>Get real advice</h2>

<p>You are running a business and exposing yourselves to liabilities and losses that you know about and probably a bunch that you don't know about. When you learnt to drive a car, or ski, or play soccer you got instruction from people who knew how to do what you wanted to do: running a business is <em>exactly</em> the same: get proper advice from people who know what they're taking about and pay for it if you have to.</p>
