A contract is a legal enforceable agreement between two or more parties. The foundation of several contracts is a set of mutual promises in legal terminology known as consideration. The promises made by parties define rights and obligations of parties. Contracts are enforceable in courts like if one party meets its contractual obligations and other party doesn’t “Party breaches contract”, the non breaching party is entitled to receive relief through courts. For instance, a developer promised to pay Graphic Designer $9000 for creating promotional materials for developer’s multimedia work. Graphic designer shaped material and delivered that to developer as required in contract. Developer admits that the material meet specifications of contract. If developers deny paying graphic designer then graphic designer can go to court and get judgment against developer for breach of contract.
Typical Contract Provisions
Several contracts include special types of provisions. These provisions include:
Duties and Obligation
The duties and obligation section of a contract is a comprehensive description of duties and obligations of parties. It also includes deadlines for performance. If one party’s obligations are to generate a multimedia work or software then the deadline specifications should be stated.
Representations and Warranties
A warranty is a legal promise that definite facts are true. Typical representations or warranties in contracts alarms such matters like ownership of contract’s subject matter for example real estate and right to sell assign subject matter. In multimedia industry contracts, warranties of ownership of intellectual property rights and non violation of third parties intellectual property rights are common. Certain warranties are implied under sales law for contracts involving sales of goods unless specifically disclaimed by parties.
Termination Clauses
These clauses ensure that either or both parties have right to cease contract under certain circumstances. Typically termination clauses describe breach of contract that prompts the right to terminate contract for example nonpayment of royalties. Termination clauses also portray process of notice for exercise of termination right and breaching party should be given an opportunity to cure breach before other party can terminate contract.
Remedy Clauses
These clauses state what rights of non breaching party has if other party breached contract. In contracts for sale of goods, remedy clauses are typically designed to limit seller’s ability for damages.
Arbitration Clauses
An arbitration clause states that disputes arising under contract should be settled through arbitration rather than through court litigation. Such clauses typically include name of organization that will conduct arbitration like the American Arbitration Association, the city in which arbitration will be held and method for selecting arbitrators.
Merger Clauses
Merger clauses state that written document contains entire understanding of parties. The purpose of merger clauses is to guarantee evidence outside written document will not be tolerable in court to contract or complement terms of written agreement.
