There is apparently an accepted idea in the world of business, whether that business be that of publishing, writing or otherwise, that goes something like this: "Let's spend hundreds if not thousands of dollars decorating our offices, designing the greatest letterhead and producing our product. Let's create the best looking cover, artwork, product we can. And now that that's done, and now that we've got $3.00 left over, let's find an attorney who can tell us whether we can actually sell our product and make money from it. And if we cannot find an attorney who will work for $3.00 (a difficult task under the best of circumstances it would appear), let's do it ourselves."
So the business person then goes out and finds some "free" forms and proceeds to cobble together some agreements. Some of the worst contracts are put together in this way. It may not be the forms' fault but the self-drafter's fault. Bits and pieces of some agreements are cut and pasted into other agreements without any sense that one clause in a contract is often dependent upon and serves to modify or explain other clauses. Without a unifying draft, conflicts often arise between and among the cut and pasted material, conflicts that can often nullify such rights as the do-it-yourself lawyer/publisher believes it is acquiring. As a result, instead of ending up with something, the publisher ends up with nothing. And just how "free" is that approach?
Often clauses in such agreements may be included that have either no relevance to the agreement or without any understanding of their meaning. Sometimes complete contracts may be used without regard for their legal validity under the circumstances. Self-drafted agreements may perhaps form the basis for licensing, whether of foreign rights or otherwise, when the underlying acquisition agreement upon which the self-drafted license is based may be defective in granting the publisher the very rights the publisher is attempting to license. Often as not that underlying agreement was itself self-drafted. Selling what you do not own is not advisable.
These roll-your-own contracts, given the likely and ultimate cost of repair, can hardly ever be said to be "free." The potential for extensive and in turn expensive disputes with the other contracting parties or even unrelated third parties, perhaps even litigation as a result, may often turn a gift horse into a Trojan horse.
There are so many clichés that come to mind here that I hardly know where to begin. "Penny wise and pound foolish" rolls off my tongue immediately. One that I made up-"Help me is almost always cheaper than fix me"-is another.
Now some will say that they have been drafting their own contracts for a long time and haven't had any problem so far. That may be but it only takes one such problem to overcome whatever cost savings the publisher may believe it achieved before the problem arose. And if the problem relates to all the self-drafted contracts, then perhaps many more such problems may soon thereafter arise-the self-drafting domino effect as it were. So perhaps another cliché is in order: "Once burned, twice shy."
Let me speak specifically to the writers and publishers in business, since those are primarily the clients with whom I deal. Acquisition agreements of all sorts-author agreements, licensing agreements, sub-publishing agreements-are not "add ons" to your business. These agreements are your business. You deal in rights and acquiring such rights is the very foundation of your business. If you have not acquired the appropriate rights appropriately, all you have is a house of business cards. Given the slightest breeze, or lawsuit, the cards may come crashing down. All the costs invested in the product, a book, your fancy letterhead, may become totally worthless. You may have substantially higher costs incurred in defending against the problems created by the "free" forms than you may have had had appropriate agreements been drafted by a qualified attorney in the first instance.
Good lawyering may seem expensive but it may turn out to be cheaper than fancy letterhead.
When a business sets up its cost model for a given project, part of that cost model should include the cost of putting the product together correctly. If you are in any business and you put out a defective product, you can expect to pay the cost if someone is injured by that product. If you put out a book to which you do not have a clear right of ownership and appropriate warranties, you may be putting out a defective product. The person that can be injured by that product can be someone whose rights are infringed or violated by that book, and most importantly you! You could be substantially injured by your failure to obtain the appropriate legal protection. You could be injured by your own defective work!
In sum, it seems wiser to spend less on fancy letterhead, letterhead that without proper legal counsel may turn out to be only fancy scrap paper, and more on the best contracts you can have. I simply cannot understand how such a patently preposterous proposition-that someone can draft sophisticated and complex legal agreements without appropriate skill and training-has come to attract such a wide group of seemingly knowledgeable business persons.
Copyright © 1996 Ivan Hoffman. All Rights Reserved.
This article is not legal advice and is not intended as legal advice. This article is intended to provide only general, non-specific legal information. This article is not intended to cover all the issues related to the topic discussed. You should not rely on this article in any manner whatsoever and you should not draw any conclusions of any sort from this article. The specific facts that apply to your matter may make the outcome different than would be anticipated by you. This article is based on United States laws but the laws of other countries may be different. You should consult with an attorney familiar with the issues and the laws of your country. This article does not create any attorney client relationship and is not a solicitation.
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