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my first game-publishing contract

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Is it normal for contract signing to proceed thus . . . A publishers sends the developer a .txt contract, the developer prints it out, the developer signs it, the developer scans it, the developer sends the .jpg back to the publisher, the publisher prints it, the publisher scans it . . . ? I just wanted to know if this is usually how it's done. [Edited by - synth_cat on July 19, 2007 10:41:18 AM]

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No, I haven't done it that way before. But it's perfectly valid and binding. What's your problem with it? Worried that the other party doesn't have the wherewithal to pay you, if they don't have a more usual way of sending contracts back and forth? [Edit] Or worried because neither party apparently can afford a fax machine? What's your concern exactly?

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Thanks tsloper!

I don't really have any concern - it's just that I'm new to this whole thing and I want to be sure I'm doing fine.

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Well, I definitely can't afford a lawyer, but I've looked pretty closely at the contract myself.

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Original post by synth_cat
Well, I definitely can't afford a lawyer, but I've looked pretty closely at the contract myself.


That's a huge warning sign right there.

Go spend the $50 to $200 to get it reviewed by a competent lawyer.

A skilled and reputable lawyer might read it once, decide that nothing is wrong, and send you a very small bill. Or he might decide that something IS wrong, and invite you in for a longer chat and review of the details.

If he finds anything wrong with it, you will save yourself much more than the cost of the lawyer visit in the long run. If everything goes right you won't have any worries and know that the money was well spent in avoiding future headaches.

Just call around to a few local tech business lawyers, ask how much they would charge to review the contract and look for problems, and go with the best bid. If it means skipping fast food for a few weeks, or even eating ramen for a month, it is much better than potentially spending thousands or tens of thousands later on.

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Would you also recommend that I get a formal copyright? When I asked about that before, people tended to tell me it was a pointless thing to do, but if it's worth the trouble to have a lawyer look at a contract for you, then I'm not so sure.

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Original post by synth_cat
Would you also recommend that I get a formal copyright? When I asked about that before, people tended to tell me it was a pointless thing to do, but if it's worth the trouble to have a lawyer look at a contract for you, then I'm not so sure.


I see two questions there, one is about registering your copyright, the other is having a lawyer look at a contract.


Registering your copyright is very inexpensive, but it only buys you the ability to litigate any future copyright claims without paying the more expensive expedited registration fee.

For homebrew indie works, I would recommend against registration unless you honestly fear that a major corporation is going to copy your work, or honestly believe that you will spend the hundreds of thousands of dollars required to fight eventual copyright claims in court.

For larger works that go through professional publication or other widespread commercial release, I would recommend for registering the copyright up front since it is inexpensive and you are much more likely to eventually assert your rights in court.



For the contract issue ...


By entering in to a contract, you are legally binding yourself to perform (or not perform) certain actions, in exchange for actions (or inactions) on the other party.

Contracts can cancel out many of your legal rights, both implied and explicitly codified. That means you might end up accidentally or unwittingly removing legal remedies you could have enjoyed, which could have been trivially prevented if you had a lawyer review it.

Contracts often have both specific and general penalties built in. For example, if you fail to meet some requirements you may be required to pay a specific amount of money. For general penalties, a lot of contracts state that certain damages as "presumption of irreparable harm" to the company. In other words, they say that even if you didn't actually harm them, you are agreeing that a violation will automatically count as a complete permanent harm to them. This generally is interpreted as having to pay for whatever damage would be done to the company forever even if the details aren't proven -- and that is expensive.

A good lawyer will be able to point out any potential pitfalls or dangerous wordings. I have personally seen one company fall prey to this when the requirement was that the other side "may" do something rather than being required to do it. That one overlooked word was a big factor (but not the only factor) in the company closing shop.

Contracts are not for when things go well. When they go well, the contract stays in a drawer and nobody looks at it. Contracts are for when things go bad. When somebody has to pull out the contract, you can know that they will be nit-picking on every detail and every single word.


Contracts are enforced in civil court, which is expensive and time consuming. Contracts are interpreted by a single judge, and they have to go off the actual written agreement rather than your understanding of the agreement. Further, the publisher probably has exponentially more financial and legal resources than you, and if they take you to court could easily bankrupt you or force you to settle with them in the hope that you can continue your business. The sad truth is that startups usually fail when faced with this type of lawsuit.

Your contracts should be reviewed by a lawyer, at least once. A skilled experienced lawyer should be able to read it carefully and explain the ramifications to you in around five minutes per page, more or less.

{edited to add some details and an example}

[Edited by - frob on July 17, 2007 3:48:10 AM]

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Original post by synth_cat
Again, thanks! I needed to hear that.

Yes, you did. Do make sure your lawyer approves the wording on the contract before you sign it. Good luck with the project.

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First of all: I've only seen one publishing contract before (10 years ago), so this might not be really applicable, but there are 2 things I find strange in this contract:
  1. Item number 4 is a bit strange... I would have it changed so that the publishing rights return to yourself if the publisher does not get a distribution deal setup within a certain time period (1 or 2 years). They should do something...
  2. Item 6 is a definate no-go if I were to sign this contract. Publishing rights should be temporary, unless they are paying a large sum of money. If the publisher takes your game and then decides not to publish it, you will have done all work for nothing and you cannot even publish it yourself or look for another publisher. Also specify the platforms the publisher can publish on.
So definately have a talk with a lawyer and good luck!

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Greg, you wrote:
>Well, so far I haven't had much luck with getting a hold of a lawyer (still working on it, though.)

What does "luck" have to do with anything? This forum's moderator has a perfectly fine listing of game industry lawyers at http://www.obscure.co.uk/directory-legal/
Just start getting in touch with those in the U.S. - and right now. You can't afford NOT to.

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Thanks for the advice!

Quote:

# Item 6 is a definate no-go if I were to sign this contract. Publishing rights should be temporary, unless they are paying a large sum of money. If the publisher takes your game and then decides not to publish it, you will have done all work for nothing and you cannot even publish it yourself or look for another publisher. Also specify the platforms the publisher can publish on.


Now that you bring this up, I think that clause does seem a little ominous. How exactly should the terms be changed. Off the top of my head I can't think of a legally correct way to set it up. I mean, it's not as if I can ask my publisher to let me change the contract so it says "the publisher owns the publishing rights, in any form (etc.) until the developer feels like breaking off the deal."

Should I propose that the publisher only owns exclusive publishing rights for a fixed time period?

I should probably clarify something here: I am actually very happy with this publisher. For one thing, it was the only company that would actually take on my game (and it came to me, instead of vice versa.) Also, this publisher has stated that it will provide certain services to me (such as creating and running a website for my game) which I am currently unable to handle.

Also, (if it is relevant), I do not plan on making a living off of this game. It is, after all, the first game I have ever even attempted to publish. I hope I didn't take away too much of my credibility by saying that :)

Quote:

Also specify the platforms the publisher can publish on.

What's the reason for doing that? Maybe it's not applicable in this case; the game I made will only run on Windows.

By the way, thanks for the link, tsloper.

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It's not that I suspect every publisher in the world of planning to stab their developers in the back, but it's nicer if the contract doesn't allow them to. If they don't plan to, then they should have no objection it.

Concerning the limitation of publishing rights: just try to get the statement to say that the game should be published within a certain period. If not, then the publishing rights revert to you. Once published, another (longer) time period starts after which the rights should revert to you again. This should be long enough so they can make a decent buck from it.

If the game is for Windows, then specify the rights apply to the Windows-version of your game. If Nintendo ever calls you up telling you they want your game, you aren't tied to your current publisher, but you could always use them again if the co-operation was to your liking.

Also, introduce an article mentioning they cannot sell the publishing rights to anyone else without your consent. And in case they go bankrupt, the publishing rights (again) revert to you.

These are all very extreme and most unlikely scenario's, but it's better to have them covered instead of fighting about them in case something bad does happen... Consider them a kind of insurance policy.

They might not agree to all points, but at least they should give you some explanation on why they don't want something in the contract. And it shows you've done your homework.

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Original post by El Greco
It's not that I suspect every publisher in the world of planning to stab their developers in the back, but it's nicer if the contract doesn't allow them to. If they don't plan to, then they should have no objection it.



Only an experienced lawyer can tell you those things, which is why we keep saying ...


The OP must get a lawyer to prevent getting completely run over.

Entering a major business contract without it is just plain stupid.

Quote:
In the meantime, I thought I might post the contract's terms here.

You might have just broken an agreement with them if they required you to keep it confidentail.

Quote:
I actually had to edit this document because it originally contained a few grammatical errors:

That is a bad sign. It shows they were sloppy, and publishers aren't usually sloppy on contracts that are important to them.


I am bothered by #4,6, and 14 in terms of reciprocity, perpetual global exclusivity, lack of oversight, and no dispute resolution. Also #8 in terms of practicality, #9 for clarification, #11 (unless you have your own QA group), and #12 having no cost limits, oversight, review, or dispute resolution of what defines "errors or defects". There are others, but those are my initial gut-wrenching items.

Visibly lacking are definitions of what you are to provide, when you are to provide it, what you get back out of the deal, and what they are gong to put in to the deal. There are no terms of design and deliverable expectations, nor for dispute resolution and oversight, which is further trouble brewing.



From what I've read, I don't see anything to prevent them from just taking your game and keeping it locked up forever. I don't see any requirement that they actually take steps to market your game, but I plainly see that if they choose not to market it or do a really bad job of it, you are out of luck. If you aren't happy with them and attempt to market it or move to another publisher, they can find you liable or extort a lot of money to cancel the contract.



If that was the entire contract deal, I don't know if I would be amused because of the ignorance it supposes, or appalled at the brazen control they are trying to get.


You *really* need to see a lawyer.

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You might have just broken an agreement with them if they required you to keep it confidential.

I was never required to keep this confidential, though I guess that's a good point.

Quote:
That is a bad sign. It shows they were sloppy, and publishers aren't usually sloppy on contracts that are important to them.

Yeah, I was pretty disturbed by this as well. When I mentioned it to the person I'm working with, he told me I could just fix the errors myself. The overall impression I get is that the publisher sees the contract as more of a formality than anything. At any rate, I do not get the impression that the publisher is going to delve into this document to use it against me.

Probably the thing that bothers me the most about the contract is the "publishing rights for life" thing in clause 6.

Also, following frob's line of reasoning, I think I will ask that the contract will be changed such that publishing rights revert to me if the publisher never really does anything with the game.

I still don't quite understand what the difference is between a game's copyright and exclusive publishing rights.

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Original post by synth_cat
I still don't quite understand what the difference is between a game's copyright and exclusive publishing rights.

A lawyer could explain it in more detail, and could answer each and every other question you can think of, in real time.
But basically the difference is that when you own the copyright you can say "I made that." But if you have the exclusive publishing rights, you can make money from it.

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I would have to talk to a lawyer from California, obviously. However, I am currently out of state (without a car or the free time for trips) and I would have no way of meeting this person face to face.

I don't really know how lawyers work. Would it be possible for me to conduct business with one solely by email and phone?

I normally would not have considered doing this at all. I'd always assumed that a developer would only bother consulting a lawyer if he knew his game were worth at least a four-figure gross. But, since you guys seem so insistent, I guess I'll try and give it a shot.

But it has to be a California practitioner that I talk to, and that complicates matters.

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Just call around and get some prices. Look in your city/town. It's free to call them and ask how much they cost to review a contract.

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Original post by synth_cat
I would have to talk to a lawyer from California, obviously.
No, you would not.
Quote:
I don't really know how lawyers work. Would it be possible for me to conduct business with one solely by email and phone?
Lawyers work just like any other business professional. They work in an office, the have clients call them, schedule appointments, and visit them in person. They bill for the time.

The first time you establish a business relationship is generally done in person. After you have a relationship they may also give advice over the phone, but it is less efficient and they will still bill you for your time (just like any other business professional).

Quote:
I normally would not have considered doing this at all. I'd always assumed that a developer would only bother consulting a lawyer if he knew his game were worth at least a four-figure gross.
If you are going to engage in business, you should consult a lawyer. The cost is cheap. Make some phone calls, find somebody close by who understands IT business law and IP rights, even better if they understand the games business. You should be able to find somebody for under $150/hr fairly easily.

Quote:
But, since you guys seem so insistent, I guess I'll try and give it a shot.
Entering into a business contract is a big thing. Make sure you go in with your eyes wide open.

Quote:
But it has to be a California practitioner that I talk to, and that complicates matters.
Just because they want the contract to be enforced under their local law doesn't mean a local lawyer can't help you. Much of contract law is general across the country, with relatively little local nuance. A lawyer will understand this fact, and know how to navigate it.

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Greg Philbrick wrote:
>I'd always assumed that a developer would only bother consulting a lawyer if he knew his game were worth at least a four-figure gross.

It doesn't matter what you erroneously assumed before you started getting a lot of patient and wise advice here on this forum. What matters is that if you go into this without a lawyer, you're going to learn a LOT. And you're going to learn it the hard way. And the learning experience will probably be extremely unpleasant. We've been consistent with our advice: you can't afford to proceed withOUT a lawyer, Greg.

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Original post by synth_cat
Is it normal for contract signing to proceed thus . . .

A publishers sends the developer a .txt contract, the developer prints it out, the developer signs it, the developer scans it, the developer sends the .jpg back to the publisher, the publisher prints it, the publisher scans it

. . . ?

I just wanted to know if this is usually how it's done.

Just wanted to say that an established developer has been sending me contract like that for the last 3 years, so I guess it's completely fine. I have my scanned signature as a jpg file, so I just paste it to the document.

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Original post by TiJ
I have my scanned signature as a jpg file, so I just paste it to the document.

And as soon as someone else has your JPG, they don't need you to paste it anymore - they can just do it themselves.

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Original post by tsloper
Quote:
Original post by TiJ
I have my scanned signature as a jpg file, so I just paste it to the document.

And as soon as someone else has your JPG, they don't need you to paste it anymore - they can just do it themselves.

They can scan it themselves from my contracts or from any other place I have signed. I could also scan their signature and paste it on a contract that gives me 5times the amount they offer. It doesn't work that way, no need to scare people. [smile]

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Lot of wierdness here guys..

First off.. Are you of legal age to enter into a business contract? If you arent there is no contract. You need a parent or legal guardian to sign for you. (I only ask because you said you couldnt afford a lawyer)

Secondly, publishing contracts do NOT contain spelling errors or gramatical errors. Many IP battles have been won or lost over poorly worded contracts and this would indicate to me you are dealing with an amatuer.

Thirdly, and most importantly, A contract is not valid unless witnessed. Your signature is worth nothing if someone didnt see you sign it and put their affirmation to that effect on the contract.

How contracts are handled varies greatly from company to company but the fact remains that some basic premise must exist for a contract to be valid. In your case it doesnt sound like any premise exists for a contract.

Just to clarify, are you sure you are signing a contract? Are you sure it isnt just an agreement, in principle? to do X or Y for z? Big difference. An agreemetn is an act of good faith stating in black and white "I Will do X, Y, Z" where as a contract is a legally binding document that generally involves the exchange or express goods and services to entities or individuals.

Whithout seeing what you are running into it sounds to me like you and someone else entered into an agreement but certainly not a contract.

Best of luck.

EDIT: Adding stuff to clarify for you..

In regards to having to get a lawyer in California.. Umm no. Your lawyer works for you. Not the person you are entering into an agreement with. The whole reason for a contract is so that if either party renigs on any or all of their comitments there can be legal reprocussions taken. (Please note this si serious stuff here. I doubt this whole .txt file thing you've got has any kind of contractual obligation to it base don what Im reading but... if you do enter into a contract there CAN be reprocussion to you if you dont follow through. SERIOUS reprocussions and that si why it is absolutely IMPERATIVE you have a lawyer read the contract for YOUR best intrests.)

In the event of a contract dispute or breech, you would file litigation locally against the person involved. If a judge deemed the dispute has merit he could then issue a subpeona to the offending party. The issue here is that alot of states have alot of umbrella laws sheltering bad business practices.. Again.. these are things an atorney will tell you about.

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