Contract clauses, one at a time

Editors cancel stories for reasons that have nothing to do with the writer: a change of plan, a cut budget, a story that went stale. A kill fee clause decides how much of the fee the freelancer keeps when that happens, and whether they can take the work elsewhere.

A licence that names only the work and the price has left five of the six questions open, and each of them decides something the parties will care about later. Most licensing disputes are about a term the grant never mentioned.

An assignment of copyright moves ownership and leaves the author's personal rights untouched. A client that edits, crops or publishes work without a byline is dealing with those rights, whether or not anybody planned to.

A brand that pays an athlete or creator is buying their reputation as much as their time. A morality clause decides what conduct lets the brand walk away, and the closer its triggers are to objective facts, the fewer arguments it causes.

An agent's value is in who they know. Once a buyer has met the factory, the agent can be bypassed with one email. A non circumvention clause is how introducers make sure the relationship they created still pays them.

The clause is easy to agree and easy to draft too widely. A promise that covers truthful statements to a regulator, a court or a health and safety inspector is a promise that will not hold and should not be asked for.

Almost every modern application is mostly open source components glued together with custom code. The clause does not stop that, it makes sure the client knows which licences arrived with the software and that none of them carries an obligation the client cannot live with.

A photo consent clause deals with the person in the picture: whether they agree to be photographed, where the images will appear, for how long, and how they can say no later. Under Australia's Privacy Act an identifiable photo can be personal information, and for children the consent comes from a parent or guardian.

Almost every agency, studio and consultancy sells on who it has worked for, and almost every standard confidentiality clause quietly forbids that. The publicity clause is where the two are reconciled, before anybody has published anything.

This is the clause most often drafted as a promise nobody can keep. Asking a business to delete every copy including backups is asking an IT team to do something its systems were built to prevent.

A clinic that runs on one supplier's software has a quiet risk: if the supplier fails, nobody can fix the system. Source code escrow is the insurance policy, and like insurance, it only pays out if the deposit is current and the release events fit what actually goes wrong.

A three year confidentiality tail is sensible for pricing and forecasts and useless for a recipe. Separating the two lets one obligation expire on schedule while the other runs for as long as the secret lasts.

A logo on someone else's shopfront, packaging or website says the owner stands behind what is sold there. The licence clause decides how far that promise reaches and what the owner can do when the licensee lets the standard slip.

A usage rights clause decides what a client actually buys when it pays for creative work: ownership of the copyright, or permission to use the work in set ways for a set time. Getting it wrong either way is costly, so the clause names the channels, territory, period and exclusivity, and prices any use beyond them.

The phrase appears in contracts all over the world and has legal effect in only one of them. Used outside the United States it is decoration, and used inside it without a fallback it fails more often than it works.

The word consequential has no settled meaning in Australian contract law, and that is the whole problem with the clause. Two parties can sign it believing different things were excluded.

The capitalised disclaimer copied from an American licence does very little in Australia and can make things worse. What survives here is a narrower clause that says what it is doing.

An exclusion clause has to clear three hurdles before it protects anyone: it must have been incorporated, it must cover the loss on a fair reading, and statute must allow it. Some exclusions the law forbids outright; most others must be reasonable.

Sellers of equipment like to promise one thing when goods are faulty: the seller will fix it. Section 2-719 of the Uniform Commercial Code lets them make that the buyer's only remedy, as long as the fix actually works.

The clause is only as wide as its own list, and the event that stops a business is usually the one the drafter never imagined. What saves a contract is the structure around the list, not the list itself.

Force majeure covers the day the ship cannot sail. Hardship covers the year the fuel to sail it costs twice as much. A long supply contract usually needs both, because they answer different problems.

The phrase turns up most often in American drafting, where defend, indemnify and hold harmless run together as one formula. Read in Australia it usually adds little that an indemnity and a release do not already do, which is why it pays to know what the words carry.

An indemnity is the one clause in a commercial contract with no natural ceiling. Reading it properly means reading the trigger, because everything after the trigger is arithmetic.

An indemnity from a business with no cover is a promise, not a remedy. The insurance clause turns the risk section of a contract into something collectible.