(Former INN Executive Director Kevin Davis wrote this article in 2012. It has been updated to link to current legal service resources.)
We’ve all signed up for some new technology – something that is going to make things easier, faster, better, less expensive – and then when the message pops up, saying “I have read and accept the terms and conditions,” we click to accept without a second thought. No lawyers are involved, there are no hours spent pouring over dense legalese.
However, as executives and publishers we have an obligation, not only to read the legalese and the fine print, but to stay atop of it all. Every legally binding contract involves rights and obligations that must be met in order to avoid a significant risk to your organization, and even to you individually.
I’m not an attorney, and so this is not legal guidance, but I have included here a few pointers for keeping track of contracts.
1. Print Everything – For those of you trying to save the world one piece of paper at a time, this is hard advice to take. However, it’s vital to keep copies of all agreements in a file. Also back up a digital copy (like a PDF) of any executed contract.
2. Read carefully– When I worked at a large media organization, it was expected that I had read every contract and agreement cover to cover, and would not sign without legal review. And, in a perfect world, that’s good advice. However, not all of us have ready access to legal professionals in a timely manner. If you choose not to have a lawyer read a contract but instead review it yourself, pay particular attention to these kinds of sections which are common in media-centric contracts:
- Definitions – These may seem obvious, but being clear on what is what up front is very important.
- Contract clauses/obligations – These sections are specific to the types of deals that the contract covers. For example, advertising contracts have clauses that deal with inventory availability, ad placement and positioning; content licenses have clauses that deal with licenses, exclusivity, revenues and delivery costs.
- Term & Termination – Understanding this section is critical. It spells out not only how long the agreement lasts, but how and when it can be renewed or cancelled.
- Representations & Warranties – This section usually spells out the basis of the agreement stating that each party has the right to enter and what happens if there’s a problem.
- Confidentiality – Understanding who can say what and how about the deal is critical to understand up front.
- Governing law – This is critical in two areas: 1. Having to assert your rights or defend them in a state that you do not work or reside in can be costly, and 2. There are tremendous differences in state law as it relates to contracts. Some states are business friendly, others are not. Taking the time to research and understand this, particularly in non-standard contracts that you are entering into on behalf of your company, can be critical.
3. Calendar deadlines – Keeping track of when you enter into a contract, when you can cancel a contract and when it may renew (especially automatic renewals without written notification) is key in staying on top of your agreements. Too often, organizations enter into agreements and then down the road assume that the contract is no longer in force. But that’s not how it works, and it’s important to understand how long you and your partners are on the hook.
4. When in doubt, get a lawyer – Given all the hard work our organizations put into creating their content, seeking legal assistance to insure that you are safeguarding your organization is always a good idea. Having a lawyer on staff or on your board is best. For those who do not however, INN’s recommendations are on its Services Page.