The 3 contracts that every game developer needs
Any business that operates as more than a sole proprietorship with one worker requires what may seem to be an overwhelming amount of contracts. However, these agreements are necessary in order to define all of the relationships, ensure that everyone is on the same page and give legal recourse should things go wrong. Even more important is retaining the rights to any intellectual property created by others.
These three contracts should be in every game developer’s toolkit in order to help the development go smoothly and protect those assets.
In any venture that involves more than one person, there should be a written agreement between the partners that answers the following questions, at a minimum:
- What are the partners bringing into the partnership?;
- How are the profits and losses apportioned?;
- What is each partner’s ongoing contribution to the partnership?; and
- What happens when the partnership dissolves?
Of course, there are many more aspects to a partnership that should be ironed out before beginning work. These questions, however, should be a good starting point for any discussion between potential partners.
Often, a partnership hires a contractor to create game assets, such as art, music or programming. Absent an agreement and without an employer-employee relationship, the person who created those assets could be the owner of the copyright to that work.
Therefore, it is a smart move to have the contractor sign an agreement stating that the assets are “works-made-for-hire,” and assign all of the rights to the employer. This can avoid any potential future claims for royalties from a contractor.
When a developer is working with the intellectual property of another, such as a trademark or a copyrighted character, it is important to get the proper licensing agreements in place. A “handshake deal” is generally not enough.
The licensing relationship needs to be defined in detail. If the product is a huge success, failure to get everything in writing could mean some lengthy and costly litigation in the future, as the licensor tries to get their cut of the profits.
These are just a few of the many agreements that are necessary in order to avoid the common problems that can arise in game development. Future posts will explore more essential agreements and delve a little deeper into these three. In the meantime, to get these agreements drafted for your development project, contact a game lawyer who knows the ins and outs of your business.