license agreement primer: the miscellaneous provisions

Though they’re usually put at the end of the agreement, the “miscellaneous” provisions (also referred to as “boilerplate”) contain some very important terms. In this post, we’ll cover those we feel are most essential for you to comprehend when signing an art license agreement. So wiggle your shoulders, take a deep breath, and focus your attention for our final lesson!

F13Creative_026_ALA_08.png

Governing law
You live in one state, the licensee in another. Whose state law applies when interpreting the agreement? This can have a big impact because every contract includes not only all the agreed upon terms, but—in effect—all of a state’s laws relating to how a contract is interpreted and what is or is not allowed in a contract. Because laws can differ dramatically from state to state, most agreements will affirmatively identify which state’s law applies to interpreting the agreement so there can be no confusion when a contract dispute must be settled.

Jurisdiction and venue
If you go to court, what court will that be? Most license agreements will have a provision describing an exclusive place where any lawsuit has to be filed. Usually the party providing the agreement drafts it so that any lawsuit must be filed where that party lives or has offices. So, if you live in Beacon, New York, and enter into an agreement provided by a licensee who’s based in Tallahassee, Florida, you’re very likely to see both Florida law and jurisdiction of a Tallahassee Florida court.

Where a lawsuit can be brought matters because it’s a big disincentive to file suit if you’ve got to do it in a court two thousand miles away. Likewise, many contracts will require any claim to be arbitrated, again, usually in the locale of the party who drafts the agreement. While arbitration is often touted as a means to keep dispute resolution costs down, it can actually be more expensive (due to filing and arbitrator fees) to pursue smaller claims (e.g. $10,000 or less) through arbitration.

There are ways to make these terms more favorable to your interests, such as asking for court jurisdiction in your own state/hometown. And an alternative we like when it comes to arbitration clauses is to ask for a "small claim" exception. This allows you to file a claim for that amount ($10,000 or less) in your local court. That way you know that you can go to your hometown court (with its much lower filing fees and state-paid judges) for a royalty claim, for example, and the licensee knows its overall exposure is limited even if it’s giving up hometown advantage in a limited way.

Severability
This is one of those terms that non-lawyers may scratch their heads over. It’s prompted by old court cases in which a judge ruled that an entire contract was void because one provision in the contract was legally void or unenforceable. This could have the effect of leaving one or the other party with no means to recover at all. The solution was to have the agreement itself state the parties’ intention that even if one provision in the agreement is found by the court to be no good, it could be “severed” out, leaving all the other provisions valid and intact, and hopefully ensuring that some kind of decision between the parties could be reached.

Integration Clause
This is usually called “Entire Agreement” and provides that the signed, written agreement is the only agreement between the parties as to the subject matter of the transaction. An integration clause says, in effect, that all the verbal discussions, emails, and draft agreements with comments traded between the parties are no longer important. Everything actually agreed to is contained only in the signed document. While rare, it’s not unheard of for one party to tell the other during negotiations that they never enforce a particular contract provision or that the words may seem to say something kind of scary but actually don’t mean that at all. This can be a problem if you get into a dispute and want to tell the judge that your contracting partner never enforces that provision or said that the words really mean something other than what they seem to say.

It’s a commonplace of contract law that if there’s an integration clause, a judge is supposed to look only at the plain meaning of the language in the agreement. If the words are not ambiguous then the court will not look outside the “four corners” of the agreement for other or different meanings. So a judge might not even let you explain your position if the words of the agreement are clear on their face.

Conveniently, the practical effect of the integration clause gives us a really good closing statement for our licensing primer series: Because nearly every written agreement you’ll ever sign will have an integration clause, it’s vital to think long and hard about what a written agreement actually says before you sign it.

OK folks... Class dismissed! We hope you’re much better informed about art license agreements and that you’ll feel much more confident the next time you have an opportunity to review one.

On a related note: We’re  really excited to let you know about our newest service offering: our Art Licensing Agreement Session. We developed this comprehensive service to provide the customized advice, information and tools you need to confidently evaluate and negotiate your own license agreements—now and well into the future. Please take a look. We would love to work with you!



Please remember: The information provided on this blog and throughout our website is intended for general educational purposes only. While some information on this site relates to the law as a topic, it's not intended as a substitute for legal advice. Only a lawyer, selected by you and fully informed of the facts relating to your particular situation, can render legal advice.