Getty Images Skirts $1B Lawsuit

Victory by Quinn Dombrowski from Flickr (Creative Commons License)

Victory by Quinn Dombrowski from Flickr (Creative Commons License)

Earlier this year, Getty Images was sued for $1 billion (yes, that’s billion) by photographer Carol Highsmith.

Getty Images had sent Highsmith a letter and a bill, claiming that she was using one of their images without buying the requisite license. (Getty’s known for doing this.) It turns out Getty sent her a bill for using an image that she had taken herself. In fact, Getty was selling licenses for thousands of her images. Highsmith responded by suing Getty for $1 billion for violating her rights under the Federal Copyright Act and state level laws related to licensing.

Highsmith donated over eighteen thousand images to the Library of Congress and made available to others to copy and display for free starting in 1988. Her claims were based on the fact that Getty used her work without attribution and added their own watermark. In my previous post about this case, you can see the math that shows that $1B is a reasonable amount to request for damages given the number of photos in question.

I previously wrote that this will be a fun case to watch, assuming it goes to trial and doesn’t end a settlement with a non-disclosure agreement. But alas, it wasn’t meant to be.

The Court granted Getty and the other Defendants’ Motion to Dismiss the federal claims, leaving on the state-level claims in the case. The Parties apparently came to an agreement amongst themselves, with a non-disclosure provision, and stipulated to having the remaining claims dismissed with prejudice (meaning Highsmith can’t file this lawsuit again for these claims). The dismissal also directs each side to be responsible for their own attorneys’ fees and costs.

Judge Rakoff wrote that he will release a memorandum explaining his ruling “in due course.” I expect it will be an interesting read.

I feel for Highsmith. Not only did she feel like her rights were violated, but the Court disagreed with her and told her she had to pay her attorneys’ fees. That’s the risk a person runs when they pursue a lawsuit – the Court could say you’re wrong, and you had to pay possibly thousands or tens of thousands of dollars to get that answer.

So what does this mean for future cases that are similar to this? It’s hard to say, though it appears that the fact that Highsmith made her work available for public use impacted her argument that she had rights in the images in question. I don’t expect this to effect artists who retain their copyright rights and make their work available for free through Creative Commons and similar means. (Thank you to all the artists who do this. I am forever grateful for your generosity.)

There are a lot of issues that come into play surrounding photography, image rights, and copyright. If you want to chat more about these topics, you can contact me directly or connect with me on TwitterFacebookYouTube, or LinkedIn. You can also get access to more exclusive content that is available only to people on my mailing list, by subscribing here.

Should your Child have a YouTube Channel?

Tire Swing by RichardBowen from Flickr (Creative Commons License)

Tire Swing by RichardBowen from Flickr (Creative Commons License)

I recently spoke at a family law conference on how to get usable evidence from social media. Afterwards, a woman approached me and said her 11 year-old child asked to have YouTube channel and several his friends already had channels. She wasn’t sure if she should let him and asked for my input.

Google Says No
The easy and obvious surface-level response to this question is Google (which owns YouTube) doesn’t allow anyone to have an account that is under 13 years old. (That’s the rule for all social media accounts in the U.S., by the way.) However, there’s nothing wrong with a parent creating a separate Google account to use with their child to create content for a YouTube channel.

Teachable Moments and Skill Development
My first response to the idea of a child having a YouTube channel, is that it’s a great opportunity to develop their skills – both as a content creator and as a person interacting with others online. Before letting the child create video content, have a serious planning discussion with them about what they want to create, their motivations for creating it, and what topics/language are off-limits. All these things should be written down; it’s good practice for creators to have a thoughtful for plan for what they want to create. You can help your child develop their video editing and copyright writing skills, as well as learn the rules about using others’ content and doing product reviews online that comply with the federal rules.

The parent(s) should review the child’s final draft of a video before it is uploaded to their channel to make sure they’re following the rules. This is an ideal opportunity to talk with your child about the potential long-term effects of a piece of content, and how they would react if they receive feedback from peers or teachers about it at school. Also, you want to decide in advance whether you will allow comments on your child’s videos. It may be prudent to turn these off, at least at first. Allowing your child to post content online comes with the responsibility of being mindful about who is trying to interact with them – either through comments, email, or direct messages.

Safety First
If you let you child have a YouTube channel, regardless of their age, be sure you’re monitoring both what they’re communicating to others (publicly and privately) and what others are saying to them. If they are under 18 years old, you should have the passwords to all their accounts and their phone so you can effectively and closely monitor what they’re doing online. The younger they are, the more oversight they need. Use effective software to monitor and protect your kids. Here’s some real-life advice from geek parent Susan Baier about her experience raising a geek child:

I also strongly recommend that you read the books by security expert Gavin de Becker, especially The Gift of Fear and Protecting the Gift. If you want a resource about the legal dos and don’ts about social media for yourself and your children, I suggest you read The Legal Side of Blogging: How Not to get Sued, Fired, Arrested, or Killed. The lessons in there apply to all social media platforms, including YouTube. If you want to connect with me and my thoughts about children using the internet, you can contact me directly or connect with me on TwitterFacebookYouTube, or LinkedIn. You can also get access to more exclusive content that is available only to people on my mailing list, by subscribing here.

I Want to Humanize Contracts

The Anxious Type by JD Hancock from Flickr (Creative Commons License)

The Anxious Type by JD Hancock from Flickr (Creative Commons License)

A friend from my business mastermind group asked me to draft a nondisclosure agreement for her for an upcoming meeting she has to discuss a future project with a potential collaborator. She wants to be able to discuss the project to see if they want to participate in it without fear that the other person will decline the opportunity but then steal her idea and compete against her. (My friend is very smart.)

The first thing I did was grab my legal pad and start jotting down ideas for clauses to include – scope of the agreement, nondisclosure provision, non-compete provision, dispute resolution, severability, etc. As a lawyer, it’s my job to go through my mental checklist of all the terms the contract should have. I’ve always said that contracts are relationship management documents and they need to be written to cover that extent of it accordingly.

This morning, as I was walking my dog, I started looking at this contract from a different perspective – how can I humanize this agreement?

In my experience, many people are afraid of contracts or they don’t read them because they assume that they are full of legalese that they won’t understand or they’re just an annoying hurdle to clear as part of a more desirable event. When I was in law school, my friends and I went to Ladies Paintball Night; the worker behind the desk said he’d never seen anyone read the waiver prior to signing it. (We altered it, then we signed it.) When I moved to my current home, it took me hours to read the CC&Rs for my HOA. They were 78 pages long, and filled with excessive legalese I swear you needed a first-year law school education, at least property class, to understand them.

Contracts should be written in plain English, be as short as possible (cover the scope then stop), and set both sides up to feel secure in what they’re getting into. Whenever I write a contract, I prefer to refer to the parties as “I” and “you” because that’s how people speak and think. In regards to this current project, I want to phrase the provisions in a way so that when my friend presents the contract to prospective collaborators, they don’t feel like there being attacked or distrusted. This document should help both sides feel comfortable speaking candidly. Here are a few of the thoughts I have about how I want to phrase some of the provisions:

  • I would not have asked for this meeting if I didn’t think you were an ideal collaborator for this project. But because this project is not only a central component of my future business plan and projected livelihood, it’s also dear to my heart, as a business owner, it’s essential that I protect it and myself. This agreement protects you too. This meeting, regardless of whether we work together on this project, should not be a hindrance to your ability to continue your professional pursuits.
  • Although I don’t anticipate there being any problems between us as a result of this meeting (otherwise we wouldn’t be having it), this is how we will address problems should it occur. I hope neither of us is in a situation where we must resort to these extreme measures, but as business people we know we must be prepared for the worst-case scenarios, even when working with the best of expectations.

There is nothing wrong with contracts using the verbiage that humanizes both sides. In fact, I encourage it. People do business with people; therefore, contracts should be written from that perspective first. When appropriate, I also encourage clients to personalize their contracts and include a touch of humor or “Easter eggs” (because I’m weird like that). You can put anything you want in a contract, as long as it’s not illegal.

I love writing contracts, and I hope I get more opportunities to write agreements that are effective for the needs of my clients’ businesses and also who they are as individuals. If you want to connect with me and my experiences as a contract writer (including how I change almost every liability waiver I sign), you can contact me directly or connect with me on TwitterFacebookYouTube, or LinkedIn. You can also get access to more exclusive content that is available only to people on my mailing list, by subscribing here.

Choosing a Business Entity

"Leap" by Sabrina C from Flickr (Creative Commons License)

“Leap” by Sabrina C from Flickr (Creative Commons License)

Just like you wouldn’t ask your plumber to change your car’s oil, don’t ask a lawyer what type of business entity you need. Ask your accountant.

What your Accountant Can Do
Anyone with access to their state corporation commission website can see the different types of corporations and limited liability organizations are available where they live. Determining which one is the ideal for your situation is best left to your accountant, an accountant who does business accounting. The tax code is too complex and has too many changes year-to-year for a regular person to navigate on their own. Get yourself an accountant which whom you can have a candid discussion about your current financial situation and your future plans, so they can tell you what’s the right business entity for you. What’s right for your friend, may not be the best plan of action for you.

And I’ve always said, a good accountant is worth their weight in gold. I’m happy to pay my accountant’s bill because handles the tax side of my business for me and he always answers my random questions.

How a Lawyer Can Help
A business lawyer can describe the differences between the types of corporations and LLCs, what it costs to file the documents in the state to start an entity, whether an annual report is required, and other legal obligations and suggestions accompany different business entities. If you have a limited budget, filing your documents with your state by yourself is one way to save on legal fees. If you can afford it, and you don’t want to take the time to do it yourself, you can hire a lawyer to do your filing for you and take care of the require publication.

Your lawyer can also create the documents that accompany the creation of a new business – bylaws, operating agreement, terms of service, and/or contract templates. They can also advise you about how to protect your intellectual property and the importance of maintaining your corporate veil. Even if you don’t need a lawyer to create your business entity, it’s pragmatic to bring your lawyer into the loop sooner than later, just to make sure you have your ducks in a row.

Being a business owner and running the business are two full-time jobs in one. As an entrepreneur, I sympathize with what my clients go through with the challenges of providing for their customers and managing the nuts and bolts of being a business owner. If you want to connect with me and my experience as a business owner, you can contact me directly or connect with me on TwitterFacebookYouTube, or LinkedIn. You can also get access to more exclusive content that is available only to people on my mailing list, by subscribing here.

Update on Arizona Drone Laws

Farming by Mauricio Lima from Flickr (Creative Commons License)

Farming by Mauricio Lima from Flickr (Creative Commons License)

Earlier this year, Arizona passed a new law regarding unmanned aircraft systems (UASs), aka drones. The purpose of this law is to prevent cities from making separate regulations. This law makes it a misdemeanor to use a drone in a way that interferes with law enforcement or fire operations. It’s a felony to use a drone to “intentionally photograph or loiter over or near a critical facility in the furtherance of any criminal offense.”

I have heard reports of drones interfering with aerial firefighting operations, causing planes to be grounded, but I have yet to hear of anyone be cited or arrested for violating this law.

On the flip side, the law is helpful to hobbyists by requiring cities with more than one park to allow drones in at least one of them. Beyond that, the law requires drone operators to comply with the Federal Aviation Administration(FAA) rules of UASs.

Rules for Flying a Drone for Fun
The FAAs rules for flying a drone as a hobbyist are pretty simple and straightforward:

  • All drones over 0.55 lbs must be registered. Your drone and its cargo total weight must be under 55 lbs.
  • You must always fly your drone in your unassisted visual line-of-sight (exception for prescription eyeglasses or contacts).
  • You must fly your drone at an altitude that is less than 400 feet.
  • Always yield the right of way to manned aircraft.
  • You can’t fly a drone within 5 miles of an airport without prior notification.

I imagine some drone enthusiasts or clubs have mapped where the 5-mile radius around each Phoenix-area airport ends. Hopefully, wherever you live in Arizona, there’s a place near your home where you can fly your drone. My dog was intrigued and a little frightened when we encountered a drone-flyer at a park.

Rules for Flying a Drone for Business Purposes
The FAA’s rules for using a drone for commercial purposes are much more complicated. Here are some of the requirements that apply in addition to the rules above:

  • Operators must be at least 16 years old and have a Remote Pilot Airman Certificate
  • Drone operators cannot operate more than one drone simultaneously.
  • The maximum permissible groundspeed is 100 mph.
  • You must fly your drone during the day.
  • No flying drones over people (exception for those involved in the drone operation).
  • No flying drones from a moving vehicle except in sparsely populated areas.
  • No carrying hazardous materials with your drone.

You can read the full summary of the FAA’s rules for commercial drone operations, including record and reporting requirements, on the FAA website. If your project requires violating these rules, you can apply for a certificate of waiver if you can demonstrate that your project can be executed safely.

More Information
If you have additional questions or want to stay up-to-date on the legalities of flying drones, check out the FAA’s UASs site or Know Before You Fly. You can also seek out a local lawyer who understands the federal and local drone rules that apply to you. If you want to connect with me, you can contact me directly or connect with me on TwitterFacebookYouTube, or LinkedIn. You can also get access to more exclusive content that is available only to people on my mailing list, by subscribing here.

FTC Compliance Friendly Reminders

Praise by bark from Flickr (Creative Commons License)

Praise by bark from Flickr (Creative Commons License)

Bloggers, vloggers, and other social influencers frequently asked me about the rules regarding disclosure when partnering with companies and using affiliate links. With holidays (and therefore holiday gift guides) on the horizon, it seemed apropos to share some helpful reminder for how to comply with the FTC’s disclosure rules when you get free product or are compensated for providing a review.

It’s All About Transparency
The purpose of the FTC’s disclosure rules is transparency. When people consume content, they have a right to know whether the creator has a relationship with the company or product or whether it is 100% their independent opinion. Knowing that a person has a relationship with a company, which may or may not include financial compensation, will impact whether a person reads or view a post and how much weight or credibility to give it.

To comply with the transparency requirements of Federal law, social influencers must clearly and prominently label the content they were compensated to make as advertising to avoid misleading consumers.

Disclosure First
Many influencers put their notice that they were compensated for doing a post or that a post has affiliate links at the end of the content. This is likely insufficient to comply with the rules because consumers need to be informed before they form an opinion about a product that they’re reading a sponsored post or an ad.

In general, you should make a disclosure in the post itself and shortly before the reader receives the advertising message. The FTC recommends putting it in front of or above the ad’s headline. Additionally, the notice need to be clear and unambiguous language. To determine whether your disclosure complies with the FTC, consider your notice from the perspective of the reasonable consumer who’s seeing your content for the first time. Will he/she notice the disclosure statement and understand that they’re reading or seeing an ad?

The FTC says terms like “ad,” “advertisement,” or “sponsored advertising content” are likely to be understood but terms like “promoted,” or “sponsored by [XYZ]” don’t comply with the disclosure requirement because they could be interpreted as merely underwriting the content without influencing the statements made in it.

So what does this mean? If you write a review of a product that you got for free or got paid for writing the post about it, you have to disclose at the top of the post that you have a relationship with the company. If you use affiliate links, you have to clearly disclose those relationships as well, prior to posting the link. (In some circumstances, using the term “affiliate link” may be insufficient if the average consumer doesn’t know the difference between links and affiliate links. Yes, this happens – I recently attend a blogging conference where an attendee assumed that the terms “link” and “affiliate link” were interchangeable.)

Every Post, Every Platform
When you have a relationship with a company or are compensated for writing about a product, you have to disclose it to your audience every time you write about it – regardless of the platform it’s on or what device people use to access it. Every single time. (Yes, I know this is annoying, but it’s what the FTC requires.)

Disclosure is Everyone’s Responsibility
Everyone who is involved in the creation or distribution of native advertising should review the content to ensure that the required disclosure is present and that the material does not mislead the audience about the product or the relationship between the writer and the company. This includes middle men like ad agencies. If anyone is found to be in violation of the FTC rules about native advertising, they could be fined by the FTC – the company that created the product or service, the writer, and anyone in between who was involved – up to $16,000. That’s a stiff penalty for forgetting or refusing to disclose a relationship.

If you want to learn more about this topic, I recommend the FTC’s article, Native Advertising: A Guide for Businesses. If you want to chat with me about these issues, like how to incorporate these requirements into website terms of service or contracts with third party content creators, you can contact me directly or connect with me on TwitterFacebookYouTube, or LinkedIn. You can also get access to more exclusive content that is available only to people on my mailing list, by subscribing here.

Someone Posted a Photo of Me Online Without Consent

Photographer by Robert Cooke from Flickr (Creative Commons License)

Photographer by Robert Cooke from Flickr (Creative Commons License)

People come to this site almost every day with questions about whether someone can post their picture on the internet without obtaining consent. Some people even ask if it’s a crime or whether they can sue.

Sue for what? Which of your rights have been violated?

Of course, each situation must be evaluated on its merits. It’s possible that a person is concerned with an intimate photo, a photograph that was taken in a bathroom, or circumstances where they are being harassed. I’m not saying that there aren’t situations where a person’s rights may have been violated; however, the frequency with which I get these questions makes me wonder whether most of these people have a legitimate legal concern or merely hurt feelings.

No Expectation of Privacy in Public
Remember, in the U.S., there is no expectation of privacy in anything you do in public (exceptions of course for places like bathrooms, confessionals, etc.). So, if someone snaps a photo of you that is less than flattering, and they post it on the internet, as long as they are not violating your rights, there’s nothing you can do about it.

Maybe they took a photo of you not putting your shopping cart away, walking around with your skirt tucked into your underwear, or texting while driving. I think there are much more important things to talk about in general and definitely that are worth of documenting permanently online; however, it’s not illegal. Just like it is not illegal to be stupid, it is not illegal to post stupid things online. The internet is full of stupid.

So What Do You Do?
Well, if you truly believe that you’ve been the victim of a crime or that your rights have been violated, contact the police or buy an hour with a lawyer to review your situation. You may be in a situation where your legal rights have not been violated but the posting itself and violates the terms that apply to the site where it was published. In that case, reporting the image to the website administrators may be sufficient to get it removed.

If it is purely a situation where you are merely angry or upset, and the person won’t remove the image when asked, let it go. If you’re embarrassed by your behavior, don’t do it again. If you’re in a situation where the image shows up if someone Googles your name, you can try to bury it by manipulating the search algorithm. Hopefully it’s not a situation where you screwed up so badly that the image or situation is going to dominate the search results for years to come.

On the Flip Side
If you’re thinking about snapping a picture of someone, check your motives. If you’ve taken a picture and you have the impulse to share it online, double and triple check your motives. What are the benefits of sharing this image? Are you being vindictive? If the situation were reversed, would you want an image of you in a similar situation posted? What if the person in the picture was your parent or significant other – would you post it then?

The person in the photo isn’t the only one at risk of losing face. Do you want to be the jerk who not only took this photo, but also shared it? You could harm yourself as well as the other person.

What is socially inappropriate and what is illegal are often two drastically different standards. My rule of thumb for this situations is the same: Think before you act. Think before you post. If you want to talk more about internet privacy or social media law, you can contact me directly or connect with me on TwitterFacebookYouTube, or LinkedIn. You can also get access to more exclusive content that is available only to people on my mailing list, by subscribing here.

What’s Up with YouTube Pulling Ads from Videos?

Speak No Evil by Robert Young from Flickr (Creative Commons License)

Speak No Evil by Robert Young from Flickr (Creative Commons License)

In the last week, several people have posted that YouTube pulled the ads from their videos because their content wasn’t “advertiser-friendly.”

What’s Advertiser-Friendly Content?
According to YouTube policies, ads can only be run on content that’s all-ages appropriate. “It has little to no inappropriate or mature content in the video stream, thumbnail, or metadata (such as in the video title). If the video does contain inappropriate content, the context is usually newsworthy or comedic and the creator’s intent is to inform or entertain (not offend or shock).”

According to YouTube, you can’t run ads against content that contains the following:

  • Sexually suggestive content;
  • Violence
  • Profanity or vulgar language
  • Harassment
  • Promotion of drugs
  • Sensitive subjects – including, war, political conflicts, natural disasters, and tragedies

If a user repeatedly posts videos that violate this policy, YouTube may suspend monetization on your whole channel. This could be problematic for content creators who make a living in part from their YouTube channel(s).

Their Site, Their Rules
Reading the YouTube rules, it’s ok to create and post content that violates some of its advertiser-friendly guidelines, but not make money from it.

And don’t even think about trying to argue that YouTube is violating your First Amendment right to free speech. It’s their site so they make the rules. They’re not stopping you from creating and publishing content on your own forum, just setting the rules for their platform.

Compare this to a shopping mall. They control who can sell wares and what behavior is appropriate. If you break the rules – by screaming or walking a body bag through the food court (not that I’ve done that) – you can be asked to leave or even banned for a period of time. Likewise, if you scream obscenities on the street, the police might be called and you could get a ticket for disturbing the peace.

So, What’s Changed?
It appears that not much has changed on YouTube. The policy regarding advertiser-friendly content hasn’t changed, but rather how it’s enforced. Before, if a video violated this rule, they would merely turn off the monetization feature, and you may not notice the difference unless you checked your Video Manager. Now, YouTube is sending an email notice when they turn off monetization.

I went back and reviewed the law firm’s YouTube channel. I run ads on most videos, but I haven’t made a cent from YouTube. There’s only one video on which monetization was turned off. My other videos where I may occasionally swear and/or mention sexual content like “revenge porn” are still monetized. (Not that I expect to make money from my videos, but you never know.)

If you have an internet-based business that relies on another platform to make money, be sure you read the site’s terms of service before you design your business model around it. (Remember, there’s a good chance the site can change the rules at any time.) If you want to talk more about internet or social media law, you can contact me directly or connect with me on TwitterFacebookYouTube, or LinkedIn. You can also get access to more exclusive content that is available only to people on my mailing list, by subscribing here.

Getting Fired because of your Side Hustle

Explosion by Charles Dyer from Flickr (Creative Commons License)

Don’t Blow Up Your Master Plan | “Explosion” by Charles Dyer from Flickr (Creative Commons License)

When I was on one of the weekly calls with my mastermind group last week, one of my fellow Shankminders asked me to comment on a phenomenon amongst entrepreneurs – working on your side gig while at your full-time job.

Wait . . . what?! There are people out there sitting at their desks, and while they are supposed to be working for their employer, they are working on their side hustle? I was incredulous, but the members of my group knowingly nodded their heads.

I thought my head was going to explode. How can anyone think this is ok?

Am I the only person who read in their employment contract? What are you supposed to do on the first day of work besides read the company handbook? Even before I went to law school, I remember signing off on company policies that said employees couldn’t use company time or company resources to run a side business. At the time (2005ish), I assumed this policy primarily applied to people who might be realtors or the like on the weekend, but now I see how this applies to anyone who has a side business – including bloggers and other social influencers.

The notion that people are running their side gig during regular work hours raises a lot of red flags for me.

  • If you are an at-will employee, you can be fired for any reason, or no reason at all. Working on a side project when you’re supposed to be doing your work tasks seems like a good reason to fire you, especially if you’re neglecting your work duties to do it.
  • Employers can easily track what employees are doing at work with technology like keystroke trackers. You may be telling your employer a lot more than what websites you’re visiting – like passwords and your company’s trade secrets.
  • Your contract may have a provision that says anything you create during company time or using company resources is owned by your employer. If your contract has this provision, you may unwittingly forfeit your business to your employer, without any options for recourse.

Some employees have a provision in their contract that says that anything they create during the ten-year of their employment that is related to the work of their employer, is owned by the employer. This could apply to projects done even outside the office.

In general, I am an advocate of employer’s staying out to of employees’ business – personal or otherwise – and that comes with the obligation that employees keep non-work issues out of the office. I understand why it makes sense for someone to occasionally check social media at work, or like during their lunch break. And unless there is a security reason to prohibit it, employees should be allowed to have their phones at their desks to take phone calls or respond to text messages related to their families, permitted it doesn’t interfere with doing their jobs.

But work on a side gig while at the office? No no no. (At least, not without permission.) There are too many risks, the least of which is losing the job which is paying your bills while you’re getting your side hustle off the ground.

If you don’t know what the rules are at your office, go back and read them. Ignorance of the company rules, particularly the ones you signed off on, will not save you from discipline or worse. If you need help understanding how to work on your side gig while at your current employment, talk to a business attorney her knee or a resource that helps entrepreneurs in your community. If you want to see me pontificates more about this and related topics, you can contact me directly or connect with me on TwitterFacebookYouTube, or LinkedIn. You can also get access to more exclusive content that is available only to people on my mailing list, by subscribing here.

Severability: Lifesaver of Contracts

Cut out and collect! by Rob Brewer from Flickr (Creative Commons License)

Cut out and collect! by Rob Brewer from Flickr (Creative Commons License)

Part of my job as a lawyer is writing and reviewing contract. I love writing contracts – you put in creative and crazy clauses as long as they’re legal. I get many clients who draft their own agreements or get a contract from a peer or template website (shudder) and ask me to review it.

Most clients do an adequate job getting the basics terms into the document – offer, acceptance, and consideration – but where they falter is boilerplate legalese that every contract should have. (I swear we don’t put this stuff in there just to make it look fancy. It serves valuable purposes.) One of the most important provisions people who draft their own contracts forget is severability.

A severability clause saves a contract in the event that one of the provisions is invalid or illegal. It lets the party (or the court) cut out the invalid provision and allow the remaining terms stand as the contract. Here’s a simple severability clause I’ve used in other contracts:

If any provision of this Agreement is held invalid by a court of competent jurisdiction, such invalidity shall not affect the enforceability of any other provisions contained in this Agreement, and the remaining portions of this Agreement shall continue in full force and effect. If a provision is found to be invalid, the Parties hereby request that the intention of the invalid provision be upheld wherever possible.

 

So what happens if your contract doesn’t have a severability clause?

If all the terms of your agreement are legal and valid, nothing. You don’t need a severability clause to save it.

If you don’t have a severability clause and you have a term in the agreement that’s invalid, it could invalidate the entire contract. (Yeah, that’s bad.)

So if you’re in a situation where you have written contract with someone, and you think they’ve violated it, you could sue them for breach of contract (assuming the contract allows for this). If the alleged breacher shows the court that there’s an invalid provision in the contract and no severability clause, the court could declare that the entire contract invalid. If that happens, there’s no written contract between you, which means there might not be a legally-binding agreement. If that’s the case, there can’t be a breach – and you just lost your case.

Severability clauses are short provisions that can have a big impact in a contract dispute. It’s one of the provisions I include whenever I draft a contract and one of the first provisions I look for when reviewing an agreement for a client, especially if there’s a suspected breach.

I always caution people who look to friends, colleagues, or the internet for free contract templates or who draft their own documents. At the very least have a lawyer review your agreement before you start using a document to make sure it addresses your needs and protects your interests.

If you need help with a contract or are looking for more information about contracts, you can contact me directly or connect with me on TwitterFacebookYouTube, or LinkedIn. You can also get access to more exclusive content that is available only to people on my mailing list, by subscribing here.