I am Not a Lawyer
I am not a lawyer, but I do deal with a LOT of contracts. Today we are looking at a contract from an unnamed US cable television channel, and why it is awful. Here’s the excerpt:
Licensor shall indemnify, defend and hold harmless Licensee, its officers, directors, consultants, employees, successors, licensees, agents and permitted assigns from and against any claim, demand, action, damages, loss, expense (including reasonable attorneys’ fees) and other liabilities arising from actions brought by third parties arising from any of the following: (a) any breach of any of the representations, warranties or agreements made by it hereunder;
(b) a claim that the use of any or all of the Licensed Material infringes any intellectual property right(s) of such party; and (c) any use of the Licensed Material consistent with the terms hereof. Licensee shall promptly notify Licensor of any such claim. Licensor shall bear full responsibility for the defense of any such claim.
blah, blah… Let’s simplify it a bit.
Licensor shall indemnify defend and hold harmless Licensee, its officers, directors, consultants, employees, successors, licensees, agents and permitted assigns from and against any claim, demand, action, damages, loss, expense (including reasonable attorneys’ fees) and other liabilities arising from actions brought by third parties arising from any of the following: [because of]
(a) any breach of any of the representations , warranties or agreements made by it hereunder;
(b) a claim that the use of any or all of the Licensed Material infringes any intellectual property right(s) of such party; and
(c) any use of the Licensed Material consistent with the terms hereof.
Licensee shall promptly notify Licensor of any such claim. Licensor shall bear full responsibility for the defense of any such claim.
In English this time:
I pay you damages if I lied or screwed up on this agreement or forgot something. I pay you damages if someone claims ownership to my music. You don’t ever pay me damages for any reason.
Okay, now it is easy to understand… and clearly awful. This is asymmetrical indemification. If something goes wrong, I pay you – never the other way around. The best thing to do in this case is strike the entire clause. This works fairly often.
The next best thing is to alter the clause
- from “any breach” to “any breach… resulting from gross negligence”. This way, if you forgot that your bandmate actually holds 20% of the copyright to the piece, you won’t get financially smashed into the dirt.
- from “a claim” to “a valid and legitimate claim”. This way some yahoo can’t just “claim” that they own your music… resulting in financial smashings again.
- to include reciprocal indemifications where they pay all of your fees if something goes wrong.
- other stuff: there are various other things you should probably change as well, but I’ve gone on too long already.
This works almost never. Indemifications can be dangerous and their lawyers know it. People sign contracts like this every day. People are also screwed by contracts like this every day. Please read and understand any contract before you sign it!
Are you a lawyer? Did I screw something up? Let me know!
kevin@incompetech.com