Open Source liability if I accept donations?

Question

If I have an open source project with the MIT license and I accept donations, does that change my liability?

Answer 1

I can't tell if you mean that you are using someone else's software that is licensed under the MIT license, or if you have a project that you are licensing under the MIT license (there is no single MIT license, it is a family of licenses). If the former then you are presumably asking if it's allowed to take donations: since there are no restrictions on that license other than the license-replication requirement, you can take donations or sell your product, or their product. As the grantor of a license, your liability would be damages (not copyright infringement). The license disclaims all liability, so to the extent allowed by law, you are not liable for damage caused by your software. But is the MIT license "sufficient"? This article analyzes the MIT license: the section of interest is at the end, on Warranty Disclaimer.

Liability for damages in the US is governed by state law, and the Uniform Commercial Code is the predominant applicable law (in the US). It depends on how much of the UCC has been enacted by the state of the injured party or whether there is variant language. However, it also is not clear whether such licenses are contracts or simply licenses. The problem is that there are implied warranties associated with goods: “merchantability” and “fitness for a particular purpose”, and as a separate matter, the warranty of noninfringement where you implicitly warrant that your work is non-infringing (there are liars out there who will claim that they hold the copyright). Let's assume that you know that this is in fact your software. The license seems to satisfy the requirement for conspicuousness of the disclaimer. Looking at the requirements in Washington, it simply says "be conspicuous", so there is no formal requirement regarding typeface, upper-case, bold, or flashing lights. The las specifically says:

Unless the circumstances indicate otherwise, all implied warranties are excluded by expressions like "as is," "with all faults," or other language which in common understanding calls the buyer's attention to the exclusion of warranties and makes plain that there is no implied warranty

If the injured party is in Washington, or a similar state, there is no warranty, unless.... There is a further provision:

Notwithstanding the provisions of subsections (2) and (3) of this section and the provisions of RCW 62A.2-719, as now or hereafter amended, in any case where goods are purchased primarily for personal, family, or household use and not for commercial or business use, disclaimers of the warranty of merchantability or fitness for particular purpose shall not be effective to limit the liability of merchant sellers except insofar as the disclaimer sets forth with particularity the qualities and characteristics which are not being warranted. Remedies for breach of warranty can be limited in accordance with the provisions of this Article on liquidation or limitation of damages and on contractual modification of remedy (RCW 62A.2-718 and RCW 62A.2-719).

This open the possibility of liability, in the case of goods for personal use. It does say "purchase", a consequence of the theory that we are generally talking about contracts (an exchange of value). Thus the theoretical debate over the contract status of such licenses has a practical implication: is the disclaimer sufficient? To cut to the chase, you want a contract, not bare permission.

Now to the question of donations: specifically, does accepting donations change the contract status of the license? A contract involves mutual obligation. A donation is, by definition, not obligatory. Therefore, a donation does not turn a bare license into a contract. That does not mean that the courts in a jurisdiction can't for policy reasons find that an ostensive donation is really a payment. However, accepting donations does increase your tax liability, but I assume you didn't mean that kind of liability.