Long contracts will cause the heat death of commerce – revisited

IP Draughts was recently given the opportunity to have one of his blog articles turned into a podcast. When an experiment fails, try again. This time, he hopes to improve the listener’s experience, with a different topic and crisper writing.

There is a theory, attributed to the nineteenth-century scientist Lord Kelvin, that the increasing entropy of the universe will eventually lead to its heat death.

IP Draughts is currently researching a new theory of commerce: that the increasing length of contracts will eventually lead to the heat death of the business world. A time will come when all available energy for business activities is diverted into the negotiation of overly-complex contracts. The underlying business activities must inevitably cease, modern civilisation will freeze, and we will revert to an agrarian economy in which concepts such as intellectual property become meaningless.

On IP Draughts’ desk is a draft publishing agreement. It is for the fourth edition of one of his books. His contact at the publishing house has helpfully highlighted changes to the language since the third edition. According to a word count, the new contract will comprise nearly six thousand words, twice the length of the previous version.

IP Draughts wonders how often parties litigate publishing contracts for legal texts. The small sums of money at stake make litigation seem unlikely. So why does a publisher feel the need to more than double the length of the contract, and in the process incorporate aggressively one-sided terms?

Could it be that the publisher is now employing in-house lawyers, who are asked to review the company’s existing contracts? And that many lawyers, if not given clear direction and instructions, will tend to add clauses to protect their client’s interests, leaving it to commercial colleagues to decide whether the balance of the document is appropriate? And that many clients are not that interested in contracts, and will tend to follow their lawyer’s protective recommendations?

IP Draughts has no information on whether this has happened in the present case. He does, however, recall another legal publisher who presented a contract to him recently. They had also revised their standard contract. In that case, they had taken a policy decision to simplify their template and make it more even-handed. IP Draughts knows which publisher he is more inclined to contact with new projects.

Someone once said that to understand all is to forgive all. (The internet is divided as to whether the first author of this piece of wisdom was Voltaire, Madame de Staël or Evelyn Waugh.)

Viewed as a paper exercise, and from the perspective of protecting the publisher, one can understand the motivation behind many of the revisions in the current draft contract. But do the revisions result in a better contract? Consider the following example. First, the previous wording.

If in the Publisher’s view the Work as delivered requires amendment to become acceptable they shall give the Author the opportunity to make such amendments. If the Author is unable or unwilling to do the work him/herself …

And now the new version.

If in the Publisher’s sole view the Work as delivered is not professionally competent and/or does not conform in nature, scope, length, format and style to the specifications agreed with the Publisher and/or with any synopsis or proposal or other material upon which the Work was commissioned or acquired and/or does not comply with the warranties given to the Publisher hereunder the Publisher shall give the Author the opportunity to make such amendments or to make arrangements for this to be done at the Author’s sole expense. If the Author is unable or unwilling to do the work him/herself …

Usually, IP Draughts is a hired hand, reviewing contract terms for someone else who takes the commercial decision on what is acceptable. In this case, he is the principal, and he strongly dislikes being asked to sign a contract that is more than twice the length of the previous version, contains many provisions that worsen his contractual rights and obligations, and contains indigestible prose.

Podcast can be heard here.


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4 responses to “Long contracts will cause the heat death of commerce – revisited

  1. I have been drafting and issuing synchronization licenses for the use of musical compositions and recordings in film and television soundtracks for upwards of 50 years. Since the scope of the license is set forth in the original request for a quote. and this is embodied in the license as issued if the work is used, the only revisions requeted refer to matters such as the identity of the licensee. I was taken aback recently, however, when a license I issued for a production by one of the biggest of the new streaming services was returned to me insiting that it be revised to reflect the standard template devised by the company’s attorneys. Taken aback because the revision of my license resenbled nothing so much as a potential “before” draft example from the Manual of Style for Contract Drafting.

    • Oh dear! The closest to this that I can think of is Google reinventing research contracts with universities, to make them incredibly lengthy and unattractive to the university. I saw a couple of these a year or two ago.

  2. Ingrid Slembek

    Are your publisher’s lawyers being paid by the word, Mark? They turned a 25-word sentence into an 87-word one. You are lucky that the contract only doubled in size.

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