Relying on Recycling Precedents… No Big Deal? Right?
There are many situations in which a digital media producer would want to get a deal in writing. Perhaps you want an option agreement signed with the creator of a comic that you want to bring to life with a game. Maybe you need a short-form co-production agreement with a new partner for an exciting new web series.
The practice is done in many ways. Searching online for a sample (fill in the blank) contract is one method. There are also web sites that offer packages with generic entertainment industry agreements. Taking a contract used for a previous deal and “searching and replacing” a few key words is another. You would not be the first to have asked a friend in the business for a contract they used, cut and pasted, and hoped for the best.
Here are several of the reasons why you should think twice about the “do-it-yourself” practice for new media agreements, and other legal documentation generally.
- Unknown Bargaining Power: You likely have no idea what factors were involved when the recycled precedent was negotiated. Who had what leverage? How did that leverage affect the terms? While the recycled precedent might favour the party who came up with the idea, it might be more appropriate that your agreement favours the party that brings the idea to life. Perhaps the recycled precedent is a one-way NDA, but it’s more appropriate for you to sign a two-way/mutual NDA. Isn’t the NDA just a standard agreement?
- Missing Clauses: There might need to be clauses added that were removed from the recycled precedent for one reason or another. More likely, there are terms that should be added to your agreement due the specific circumstances of your situation that aren’t present in the recycled precedent as it was prepared competently, but under different circumstances.
- Wrong Jurisdiction: The recycled precedent may have been written in the context of Canadian federal law, or U.S. law, whereas your agreement should have been drafted based on Ontario law. The choice of law clause might be a completely unreasonable but got overlooked along with the rest of the miscellaneous / general clauses.
- New Clients/Partners: The problem with using your own agreement over and over again is that you aren’t getting advice on what should be changed based on the different yet related parties you are contracting with each successive time.
- Hot Mess: When clauses from different recycled precedents are mixed together, there is generally inconsistency among the agreement’s defined terms. Terms such as Intellectual Property, Confidential Information, Services, Delivery, Term and Effective Date might be defined once, twice inconsistently, or not at all. More likely two different words are used to describe the same term. The result is that if you need to rely on a specific clause that uses the word that wasn’t defined, you may be relying on a word that is meaningless. Also, the numbering of clauses can be a mess, which causes confusion when clauses refer to the other… If the clauses that survive termination are listed by their number, a jumbled set of numbers can cause significant issues.
- Planning for Success or Failure: Recycling a precedent saves legal fees today, but could cost much more in the long run. Your agreement’s drafter should take into consideration the nuisances of the relationship between the parties to your agreement, the potential outcomes that should be planned for ahead of time, etc. If two people agree to pursue a business together, and the business fails, the incorrectly drafted clause about profit sharing is likely completely irrelevant. If the intentions of the parties is realized and there’s a lot of money on the table, that’s a different story. To the extent possible, a well drafted agreement proactively avoids conflict caused by a lack of clarity.
For the many people who pretend to be their own lawyer (and you know who you are), perhaps you’re developing a better set of precedents over time… or those few mistakes are getting exponentially multiplied. It only takes one error to potentially cause havoc. Try suing yourself for negligence.
It’s no secret lawyers use precedents, but the final deliverable is highly customized, and your lawyer is being paid to consider many legal and factual issues, including those listed above.
Here’s a compromise. If you use recycled precedents to create the agreement for a specific transaction, take the time to read every word, twice, and ensure that it accurately and clearly reflects the transaction. Take it to a lawyer for review and ask her to advise you whether it is sufficient as is, what should be amended or why it should be re-drafted from scratch.
Relying on Recycling Precedents. No Big Deal? Right? Only if you aren’t planning for success.
Edwards PC, Creative Law is a boutique law firm provides legal services to Music, Film, Animation, TV, Digital Media, Game, Software and Publishing industry clients. For more information and blogs, please visit www.edwardslaw.ca
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* This blog is for general informational purposes only and is not to be construed as legal advice. Please contact Edwards PC, Creative Law or another lawyer, if you wish to apply these concepts to your specific circumstances.