Most people don’t consider reading legal agreements a favorite pastime. But not reading and understanding them can be a deadly mistake when your entire business depends on the agreements you’re required to adhere to. One internet entrepreneur is learning that in a hard and very public way.

Chris Pearson has built a successful business selling WordPress themes and a WordPress theming framework called Thesis. But if WordPress creator Matt Mullenweg has his way, Pearson will either be making changes to the way his business operates or closing up shop.

Why is that? WordPress is licensed under the GNU General Public License, or GPL. And the GPL requires that all derivative works be licensed under the GPL too. In other words, if you build a new piece of software that relies on WordPress to function (like, say, a WordPress theming framework or even a theme) and want to distribute it, you have to offer it up under a GPL license.

This has been a subject of debate and discussion in the WordPress community before, but it reared its head again in a big way recently when Pearson and Mullenweg were brought together for a live debate. Pearson believes that the GPL doesn’t apply to him and Thesis, but Mullenweg counters that top lawyers who have looked at the issue have advised WordPress parent Automattic that a theming framework like Thesis is indeed a derivate work under the GPL, and must be made available under a GPL license as well.

If the GPL does indeed apply to Thesis, Pearson is in violation of the WordPress license, and could find himself in legal hot water if he’s sued. But publicly, he’s not afraid; he has essentially invited Mullenweg to sue, and the online battle that is still ongoing looks like it might just lead to a court room. That might not be such a bad thing for everyone else, as it would set some much-needed precedent. But that’s neither here nor there.

Underneath it all is a point that’s important for many entrepreneurs and developers today: if you don’t handle the fine print, it just might handle you. This is particularly true given the number of businesses that are being built on third party ‘platforms‘. Whether you’re building your business on WordPress, Facebook or the App Store, chances are you’re required to agree to legal terms that may not be compatible with your goals and business models. Unfortunately, as the Thesis-WordPress brouhaha demonstrates, sometimes that doesn’t become evident until it’s too late.

So what should entrepreneurs and developers do? Read the fine print, obviously. But in some cases, reading it isn’t enough. As is clear in the debate between Pearson and Mullenweg, what agreements say or don’t say is often in dispute, and how specific terms may be applied isn’t always easy to ascertain. That’s where the advice of competent counsel becomes invaluable. While writing a check to an attorney is never fun, any entrepreneur or developer building on a third party platform just might find that not getting good legal advice is being penny wise and pound foolish in the worst kind of way.

Photo credit: gurdonark via Flickr.