I’ve doing a bit of research online about unpaid/revenue-sharing agreements. I haven’t found anything substantial on how to go about writing up a contract. Most of the threads from other forums I’ve seen involved a handful of replies saying “Seek legal advice from a lawyer. Have them write it for you.” So, I decided to contact someone in that regard, who gave me a quote of $500 USD, strictly for the revenue-sharing agreement. While I understand that this is a professional, and I’d be getting all the coverage I need, that price was still a bit of a jaw-dropper for me.
I work a full-time job, and don’t really have much spare income after my bills are paid each month. Game development is a passion for me, and something I’d eventually like to turn a profit from, but it’s hard for me to justify an investment of that scale for something that could potentially return little to no revenue. I know that risks have to be taken, and am willing to do so. Simply trying to grasp what sort of risks are required of me, and make a judgement call on if I should stick to doing this alone.
For those of you who have published games under these circumstances, how did you go about doing it? Have you ever had any issues with legality? Past contract agreement fees, what sort of monetary investments am I looking at for publishing this game?
~Any light you can shed on the situation would be a great deal of help.
fall apart and have different people claim ownership
be successful on Kickstarter
be sued
be sold
If the answer to any of those is ‘yes’ then you probably really want/need that lawyers help to make sure things don’t come down around your ears (and cost you 10-1000x that amount) in the above situations.
If you can’t afford the cost of a lawyer to help set things up, then you’re simply running the risk that the whole thing can come apart because something ‘crazy’ happened. It could be as minor as the project ceases to exist to having all your assets as collateral in a lawsuit.
Reality: You likely don’t need to worry unless you’re making something great or you get your hands on a lot of money. Read your other post and it seems like you’re a new game developer with programming experience. Great! I wouldn’t get hung up on the legals yet; more than likely you’re not at a level that you need to get lawyers involved. Disagree? Great, prove me wrong.
Thanks for the reply, Mycroft. And yeah, I’m a very new game developer. I’ve made a few solo projects, but nothing I saw through to the point that I wanted to publish anything.
Let’s assume that this project does end up picking up steam and has the possibility of falling into that category of “making something great”. I do plan/hope to sell the game. If I’m unable to get it on Steam, then sales would be through my website. My main concern is that I’ve been taking on pro-bono team members, and want to make sure the help doesn’t end up hurting in the long run. I don’t necessarily disagree that I don’t need to get lawyers involved, but would it be smart to at least have a self-written contract for the use of their copyrighted works? To my understanding, people own anything contributed to a project, unless some sort of agreement has been signed that says otherwise, and if the project gains any kind of revenue, that person is capable of taking up lawsuit for whatever they may deem as their “share”. That neither something I want, or can afford to deal with.
Like you said, I’m new to this. Just sort of trying to wrap my head around whether it’s something I should be concerned with now that other people are involved in asset creation.
Yeah. I spent a while looking for something to use, but couldn’t find a template for it. I found some rough explanations of what people did for their revenue-sharing agreements, but no actual legal drafts.
If you’re making a product that has real money implications then you need a business identity, likely an EIN, accounting software (Quickbooks works for me), at least one business checking account and some lawyer time to make contracts are done well. I don’t personally use a lawyer and it IS a risk that bites occasionally. This adds up to several hundred dollars just for setup and does not include lawyer, accountant and quarterly taxes.
Here’s a good starting point https://www.score.org/
It has a lot of good videos on starting/running a business. Some of the best ones are on Copyright/Trademark and IP ownership. Start there.
I’m definitely in the camp that a lawyer is unnecessary, and that the “get a lawyer for everything” attitude is perpetuated by lawyers.
You can do just fine with an explicit agreement. It may not be an iron clad contract, but it will definitely shut down a lot of frivolous litigation and lawsuits.
I would just write out a detailed agreement with explicit wording.
Make sure to mention who retains the intellectual properties for what, who owns the assets made and how they may be used in the future, how the profits and expenses will be shared, what is expected of all parties, a general time table of the project, what happens if someone drops out of the project or fails to keep up with it, and how to go about making amendments to the agreement.
Then share it with your partner and have them amend it with you.
Once you reach an agreement, have it formally agreed on in explicit terms. As in have both of you write “I agree to the following”.
Then you can just use a private chat to do the exchange.
It’s not perfect, but it’ll be a good starting point that doesn’t require hiring a lawyer for hundreds of dollars per hour. If you’re looking to do this for small projects it will suit you just fine.
Just make sure to be explicit! Avoid words like “try to”.
@Mycroft I’ve got quickbooks and a business account ready to go. Don’t know much about getting a business identity, but I’ll look into it. Thanks for the reference site.
@neginfinity I came across similar things, but like I said, nothing that addressed copyright issues specifically, which is where the main concern is when writing up a document like this. First one looks like a decent format to follow, aside from that. The revenue-sharing agreement you linked was for oil revenue, so I’m not sure how I’d go about appending that for copyright use.
Really appreciate all the help, guys. I’ll write up something myself, and send it out. Was very weary about getting sucked into the “lawyering” process of it all at such an early stage.
<assuming you’re in the US>
Search for “Creating an LLC in ”
Typically it costs anywhere from $50-$300; wouldn’t expect it to be too high. You can create a single person LLC pretty easily and with out any major tax implications.* A business identity has to have a unique name in the state, but is not the same thing as having a trademarked name.
I’ve once (in hindsight unnecessarily) payed a lawyer to give me 45 minutes of advice regarding legal things with an iOS app that I never released. I payed something around 150,- € for that, which is on the cheaper end of the spectrum I believe. One of my questions was what a EULA would cost. He basically told me “Just take the EULAs from 3 very popular iOS games and write something that averages their content in your own words, that’s pretty much what I would do, if you were to contract me with writing such a document”.
I think writing up a revenue share agreement from some templates should be manageable without a lawyer.
@Mycroft Been doing a bit of research on this, and it’s going to cost me ~$50-100. I plan on getting my EIN in the coming months.
To any wondering, I wrote up what I feel is a relatively air-tight revenue sharing agreement after browsing through some templates, writing up a couple drafts, and taking them to a professor on my local college campus. He helped me with defining the legal terms, and taking out any bits that could be misconstrued. After all was said and done, we had a relatively professional looking document to work with.
I own three companies (none gaming-related), one of which is Pretty Damned Big.
Getting an EIN is as simple as filling out a form and sending it to the IRS and waiting around. In some states you’ll also need a state tax ID. Setting up an LLC in most states is a matter of going to the Dept of State website for your state and filling out a relatively simple form and letting them hit your credit card for less than $200. Then you are A Real Business.
BoredMormon nailed it above with his breakdown of income expectation and whether or not you need to blow cash on a law-shark. Unless you’re looking at the tens- or hundreds-of-thousands range, you’ll be wasting your money.
The most important thing to realize about contracts is that they’re worthless unless you’re willing and able to defend them in court (e.g. spend a lot more money on lawyers). The most common examples are patents, trademarks, and copyrights – people think they can just stake their claim and they’re magically protected from wrongdoing. It doesn’t work that way and defending your IP can be tremendously expensive.
Another similar area where small companies often go wrong are non-disclosure agreements. Microsoft can enforce their NDAs. You probably can’t afford to do so.
The most important reason to become A Real Company is something called “the corporate veil.” The “LL” in “LLC” means “limited liability” and that means if something goes Very Very Wrong, everything you personally own can’t be “attached” in a lawsuit against the company. It makes the company a separate thing from you and whatever you own. There are rules you must follow – don’t mix personal and business expenses is the big one. But it’s worth doing if you’re going to try to sell things.
Also, be very, very careful about using contracts you wrote yourself or cobbled together from online sources. You’d be (unpleasantly) surprised at how big a hole a professional attorney can make in one of those. Even seemingly minor terminology choices can have gigantic legal implications. It’s tempting to view the law as something that can be approached deterministically, but it doesn’t work that way in the real world.
With NDA’s its still worth having one in place that indicates what is meant to be kept secret and what is public. It’s nice to be clear, even if you can’t enforce it.
