What I would do if I were you is I'll get third-party companies like PayPal,
or any e-commerce site that has a shopping cart built into them, put that in
the website. That way anyone paying you will be protected by this third-party
company who specializes in this category and you will be out of liability
since you're not holding to any credit card number. You will not be liable
under the PCI or any other government regulation governing such transactions.

As others have said, anyone can get sued for anything these days. I had a client that ran a Medical Transcription service, and she was concerned that if one of her Doctor clients got sued for malpractice that she could be named in the suit. One thing she did was have a formal, signed, transcription contract with each doctor that stipulated that she was only typing and that the Doctor accepted full responsibility for the content of every transcribed report. When something on the voice recording wasn't clear, she would notate it and send it back to the doctor's office for clarification. In ten years she hasn't had a single issue. As to the issues with credit card information, there are many regulations about how that data needs to be protected. Any credit card processor I've ever dealt with insisted that you have a written privacy policy and a 'terms and conditions' policy that includes your return policy. >>>>>How do I avoid legal liability? If results cannot be guaranteed then should I start the company? <<<<< You can act responsibly, take precautions and treat your customers the way you'd want to be treated. But you can never avoid legal liability in the United States because we are a very litigious society. If nobody went into business for fear of being sued, we'd still be living in caves and hunting mammoths. It's just one of the risks of entrepreneurship.

If you don't anticipate having a large number of credit card transactions each month, it would be safer and less expensive to use PayPal to process your payments. That way, you are not storing credit card numbers and there is less possibility of the numbers being stolen. As others mentioned, you need to have a contract that clients sign before you begin any work for them. Check with your state office of consumer protection to determine what you need to include in the contract. In my state, business contracts must contain a cancellation policy. We can set the policy ourselves, but it must appear in writing in the contract so the client is fully informed.

Paymant processing is definitely a liabiliity, which is why most online businesses will outsource this function to a provider who specializes in it, and pay a small transaction fee in exchange for any liability associated with payments. A service like PayPal (paypal.com) offers very good tools for managing payments and handling credit transactions. ---This post was edited to remove a commercial link. Read our discussion policies for more Community best practices.

The number of things you could get sued for are way to numerous to list here as well as will never be complete. A good lawyer can sue you just for breathing. Instead of worrying about all of that, look for ways to protect yourself. 1) Your form of organization - a sole proprietor is one with the business. But, other forms like llc or corporations limit your amount of personal liability - thus, if you are sued, your personal assets are not at risk. 2) Teamextenion - also offers good advice on having a strong, easily understood contact in place with each customers. I have found that any lawyer can get around any contract - but, if you spell out your terms in the beginning with your customers and they end up not liking something - they are less likely to sue as you have already spelled everything out with them. 3) have good insurance - thus, if something does go wrong - the insurance company will do everything they can to back you. Lastly, just treat customers like you would want to be treated. Talk to them up front - try to understand what their needs are and make sure that everryone is on the same page. not only will this help limit your liability - but will help ensure happy customers.

It's hard to think about all the type of things you can get sued for, but I would imagine your risks are lower because you are online. For a small operation, I imagine you will get fined and possibly have your merchant account closed for stolen credit card information. The easiest way to safeguard yourself is to simply not store credit card numbers. You can process credit cards online without ever storing the numbers. Always have a contract with your clients to limit potential liability. You cannot 100% gaurantee service results, so don't let this stop you. Write the contract so the most the customer can get back is what they paid. Look into an arbitration clause. All this your lawyer will help you with. You don't need a customer service line but it will be a good thing to have. Look into Google Voice for a local number. I recommend RingCentral for a toll free number.