Entrepreneurship & Small Business

Privacy Statement - should I be concerned about liability statements?

  • Last Updated:
  • May 18th, 2020 4:47 pm
[OP]
Sr. Member
Dec 1, 2006
684 posts
73 upvotes

Privacy Statement - should I be concerned about liability statements?

We've been working with an external team to create a website, and when we were discussing T&C and policy, something concerning came up and wanted to seek your guidance.

here is the background in a point form:
  • A website was created by Entity B for Entity A
  • API keys to social network logins are created/owned by Entity B
  • Entity A does not have any knowledge of how social API keys were implemented, how the website data is stored, nor how the customer data is stored.
  • The data is currently being stored on Microsoft Azure environment managed by Entity B
  • Entity B has agreed on providing personnel from Entity A to view PostgreSQL table that stores user data
  • Entity B is mandating to include this in the privacy statement “This website is operated for Entity A, all liabilities assumed therein by Entity A. Source code related to this website is owned by Entity B”
  • Although Entity A does not have concerns related to the source code as Entity B has used in other projects, Entity A is concerned about comments around*, all liabilities assumed therein by Entity A*. Considering this is related to privacy and how the APIs would have been implemented which Entity A does not have ownership nor knowledge of.
Is this a normal statement? I wanted to get thoughts to see if I'm being overly paranoid.

If this any impact, both Entities are in Canada, Ontario
1 reply
Deal Addict
Jan 21, 2018
4324 posts
4377 upvotes
Vancouver
One entity cannot really assume liability on behalf of another. If anyone decides to bring a case for liability, they will decide which entity to bring it against (or both) based on their judgement. One entity can indemnify the other against liability related to a specific area, meaning that they will assume the costs for defending against any lawsuit and will pay any damages resulting from the lawsuit. That's pretty common, and probably what you mean. The exact area for which one entity indemnifies the other needs to be carefully spelled out, and it should be something that is fully under the control of the indemnifying party (e.g., something like "we guarantee that we own the rights to software we are selling you, and nobody will claim that you copied their patented product, and we indemnify you against any patent infringement case brought against you in regards to your use of this software".)

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