I was looking for remote job on Linux kernel hacking, which is a kind of dream job. Eventually I found one, sent a resume, passed an interview and even got an offer, and salary was good enough. So far, so good.
Since programmers work for the company remotely, the programmers must register their own company (individual entrepreneur), and company-employer works with these legal entities. As opposed to employment contracts, the company is free to write anything it wants in the contract with legal entity, and so, when they sent the contract to me, I've read that if the company incurs losses (supposedly) because of programmer's work, the programmer must compensate all the losses completely. From what I know, this amount could be A LOT more than programmer's salary.
From my experience, the reality of software development is that there is always a possibility of bugs. Of course, developer strives to write bug-free code, writes tests and so on, but, sometimes the bugs are found in old tested code. So, there is virtually no way for the programmer to insure from very serious problems in his/her life, because of this item in the contract.
I believe that this kind of liability is unacceptable for this kind of collaboration: the only way the for employer to put liability like that on programmers is to draw some percent of profits, not fixed salary.
I tried to limit the liability: I proposed that maximum what could be drawn from the programmer is a full salary from previous month. This proposal was declined by the employer, and I decided not to work for them, although it makes me sad that I had to decline otherwise very interesting position.
Am I wrong?
UPD: Regarding the country: I'm in Russia, and the company I'm talking about here is Russian as well, but I was primarily interested in whether such practice is common in different parts of the world, not only in Russia: I've also heard that some Russian people work for US companies by similar scheme: they register their own companies, and sign contract with US companies. I'm glad to know that such practice is not common (from many answers and comments). Probably I'll try to work toward this goal.