Server Shut Down costed my business lots of money! Who is to blame?

[rockyj81]

Hi,
I own an online business in canada and my website's server was provided by a middle eastern web space reseller who was buying his web space from an American Registered company.

Last week the server went down for 4 days and it cost us 10000's of dollars. They also lost lots of our database information.

Now I'm considering taking a legal action against the original space provider for what has cost me. It hurt our business so bad we might have to claim bankrupcy.

Although the middle eastern company was the company who I got the space from, but they were not the reason this issue happened. It was the American company's fault (Apparently, a virus got into the server and because the server's security was not high enough, the server was infected and everything was ruined). Additionally, the Middle Eastern company is not active in North America and the only way for me to hold them legally responsible is to go to Middle East and take a legal action against them (which will definitely get me nowhere considering they are a company from a third world country whose judicial system hates Americans and Canadians)

My question is: Can I hold the American server company legally responsible for what has happed to my company although I did not sign a direct contract with them? OR only the reseller company can hold the American company responsible?

The server went down on December 7, 2007. We immediately moved our site content to a different Server but it still took us 4 days and we were back live on December 11, 2007. I heard from the reseller guy that they were just able to fix the issue on December 13, 2007. I lost lots of business because of a big advertising campaign we were running over weekend. Many of our potential clients came to our site for the first time and saw nothing. Our current clients were also upset with us for losing their data.

Please let me know if I can take a legal action against them. Any legal advice is very appreciated.

Also, feel free to PM me if you'd like to know more about the issue and possibilities of working on this together.

Thanks

[Peter Bowen]

I imagine that they've contracted out of the risk of consequential losses. Check your agreement.

Hosting would be impossibly expensive if host's had to accept or pass on (insure against) risk for their client's loss of income.

I guess it would be the same if we could sue microsoft every time we lost money or time because their software crashed (I'm not bashing them just trying to make an example) or how about suing Toyota for loss of business because your delivery van broke down.

I think you must also carry some of the blame for not having a backup system in place or insurance for not being able to trade. I'm not bashing you either - it's just a wake up call for everyone who runs an online business - a risk management system is just as necessary in an online business as in an offline one.

[rockyj81]

Thank you for the response. I went over their terms and conditions and it says the following:
"[the company] is not responsible for any damages your business may suffer. [the company] does not make implied or written warranties for any of [the company] services. [the company] denies any warranty or merchantability for a specific purpose. This includes loss of data resulting from delays, non-deliveries, wrong delivery, and any and all service interruptions caused by [the company]."
I guess this means there is nothing I can do right?
With regards to the backup, thanks for the advice. WE were fortunate that we still took our own backup twice a week so we lost the info of clients who joined us the last three days before the server crashed.
Any other inputs are appreciated.
Best Regards,
R

[Peter Bowen]

Sorry about that - what about running a more frequent incremental backup - just back the changes up and then possibly using something like noip to rapidly redirect traffic in the event that your host dies.

[fisicx]

Think also about the chain you have in place - your business, the registrar, the reseller, the host and all the DNS and routers in the middle. Lots of bits that can go awry.

Is there not a local host you could use, cut out the middle man and deal directly with a single registrar/host.

For example, the host I use is about 20 miles away, has continual incremental backup, an huge UPS with back up generators and 24/7 support. If a server goes down (which they do from time to time) the backup is normally online within an hour or two. OK so it costs a little more than the budget packages but I'd rather have the piece of mine than a save a few dollars a year.

[TWD-Tony]

I guess you chose the host on price? (I am not making any assumptions here - just an educated guess)
NEVER EVER EVER choose a hosting company for your business website(s) on price... low cost host's are low cost for a reason - they have little in the way of backups / redundancy because of the small margins they operate on.
Still - Server downtime can happen to the best of us, it's a fact of life... It's how a hosting company responds to that downtime that makes the difference.

As for can you bring legal action against the top-level provider (the US company) then I am affraid not - their contract is with the reseller and not you.
Sorry...