Does this kind of contract exist?

[InsideMan]

I'm considering starting my own business, but there is one problem in the way.

Without divulging too much information about the idea, the business is basically a website made up of scheduled realtime updates of statistics describing the nightlife and restaurant industries. Employees are paid to report data "from the field" using company mobile phones, data which are then posted on the website for viewing. People visit the website because the information on it is very useful. The problem is that there is no feasible way to continuously supervise the employees while they are in the field, and the data they provide is the livelihood of the business. So for example, an employee could just provide phony data while on location, getting paid. You hope that people have a good conscience, but you never know.

Like I said, the data is the livelihood of the website. Revenues are based on advertising so if false data hurts the reputation of the site, the business could die.

So the question remains, is there some kind of contract between an employee and its employers that states that employees are liable for the information they provide, and because it is crucial to the business model, they can be sued for damages if it is determined that false information was being provided?

An example that I consider somewhat similar is if a writer for a newspaper was found guilty of fabricating news stories, could the newspaper, via an employer-employee contract, sue the writer for intangible damages to its reputation?

Any insight would be greatly appreciated.

[rogercbryan]

This is a very unique idea.... I could see great value in it... with that being said I don't think it will work

1- Verifying the accuracy of the information (as you mentioned) will be near impossible
2- Contracts are only worth the money you are willing to spend to defend them
3- I doubt the owners of the bars/restaurants will be willing to share this information and/or let their employees to do so

[posylane]

In general you can set up a contract any way you want. Suing for breach of contract is the hard part, particularly because in general you can only sue for "damages". Perhapes the best way for you to protect yourself would be a "liquidated damages" clause where you and your employee agree in advance as to what the financial penalty is for bad data.

You have to have a reasonable number for your liquidated damages to really make it work in court but should you have to sue it can make your case much simpler. You would want a lawyer to draw up the agreement unless you are really comfortable with contract law, which does not sound like the case.

[paul2145r]

Well, one way you could go about things is using subcontractors instead of employees. Let them know that they will constantly be audited, and that they will be liable for any falsehoods that are reported on the site. This will help you take care of things on your end. Or, talk to the owners of the establishments, and have them be the ones giving you information. They are getting publicity out of the deal, so they may be interested.

[InsideMan]

Perhapes the best way for you to protect yourself would be a "liquidated damages" clause where you and your employee agree in advance as to what the financial penalty is for bad data.

Thanks, I'm going to look into this.