Stephen Brenish
Most indie developers sign their first contracts in a hurry, with a collaborator they trust or a publisher they are excited to work with, and read them properly only when something goes wrong. Contracts are not bureaucracy. They are the written answer to the questions that end studios and friendships: who owns this, who gets paid what, and what happens if someone leaves.
This is general information to help you ask better questions, not legal advice. Contract and copyright law differ by country and state, so get advice from a lawyer where you live before you sign anything significant.
The contracts that actually show up
Contractor or freelancer agreements. Anyone who is not a formal partner or employee, from a composer to a character artist to a contract programmer. These define the work, the price and, above all, who owns the result.
Co-founder or collaboration agreements. If two or more people are building a game together, this records who owns what share of the company or project, how decisions get made, and what happens if someone leaves. It is the contract most small teams skip, and the one they most often regret skipping.
Publishing agreements. If a publisher funds, markets or distributes your game, this is the most consequential document you will sign. It decides who owns the game, how revenue is split, what the publisher recoups first, and what happens if either side wants out.
NDAs. Non-disclosure agreements protect confidential information when you pitch or share builds. They are routine, but read them for scope and duration like anything else.
Ownership: why IP has to be in writing
The single most common contract mistake in indie development is paying for work and assuming you own it.
In the United States, a transfer of copyright is only valid if it is in writing and signed by the owner. And work by an independent contractor counts as “work made for hire”, owned by the commissioning party from the start, only in specific circumstances: the work must be specially commissioned, fall into one of the categories the law lists, and both parties must agree in writing that it is a work made for hire. Because it is not always clear whether a given piece of game art, music or code qualifies, contractor agreements commonly include both work-for-hire language and an explicit assignment of copyright as a backup.
Other countries handle this differently. Some give creators moral rights that cannot be fully waived, so if you hire internationally, check how ownership transfers where your contractor lives.
What should be in a contractor agreement
- Scope and deliverables: what exactly is being made, in what format, to what standard.
- Payment: amount, schedule and conditions. Splitting payment across milestones, for example part up front and the rest on delivery, protects both sides.
- Ownership: work-for-hire language plus an assignment of rights to your company.
- Portfolio rights: whether, and when, the contractor can show the work. Most will ask; agree it in writing, with timing that respects your announcement plans.
- Confidentiality: what they cannot share, and for how long.
- Third-party material: a promise that the work is original, and that any licensed assets, fonts, samples or tools are disclosed and properly licensed. Agree your policy on AI-generated content here too.
- Credit: how the person will be credited in the game.
- Termination: how either side can end the agreement, what gets paid for work already done, and what happens to work in progress.
What should be in a co-founder agreement
- Ownership shares, and vesting, so that someone who leaves early does not keep a full share of a game they did not help finish. Vesting schedules over several years with an initial cliff are common in startups.
- An assignment of each founder’s work on the game to the company, including work done before the company was formed.
- Who decides what, and how deadlocks are resolved.
- What happens when someone leaves: what they keep, whether the company can buy back their share, and on what terms.
Form the legal entity and sign this before the game is worth anything. Ownership disputes over an unformed “future company” are among the hardest to untangle.
Reading a publishing agreement
The terms that matter most:
- IP ownership. Do you keep the IP, and are sequels, ports and adaptations covered?
- Revenue split and recoupment. What does the publisher recoup before royalties start, is it capped, and is it calculated on net receipts after platform fees? Watch for cross-collateralization, where costs from one game are recouped from another.
- Term, territory and platforms. How long the deal lasts, where it applies and on which platforms.
- Milestones and acceptance. How payments are tied to milestones, and who decides that a milestone is accepted. Vague acceptance criteria give the other side unlimited leverage; see how to plan milestones for a publisher deal.
- Marketing commitments. What the publisher actually commits to, in writing.
- Audit rights. Your right to check the numbers your royalties are based on.
- Termination and reversion. What happens if the publisher stops supporting the game, and whether rights revert to you.
Red flags that mean stop and get help
- The other side owns your IP outright, or holds it permanently with no reversion.
- Recoupable costs are uncapped or undefined.
- A right of first refusal over your future games with no clear terms.
- Revenue shares described as a percentage of “all revenue, from any source, forever”.
- Acceptance and approval at the other side’s sole discretion.
- Ownership promised to a company that does not exist yet.
- No way out for you, and an easy way out for them.
Before your next project
Write down, for every person and company involved, three things: what they are contributing, what they get, and what happens if they leave. Then turn it into a signed agreement before the work starts, not after the game is worth arguing over. A short, specific contract signed early is worth more than a long one negotiated in a crisis.
For the money side of these conversations, see revenue share vs. salary for game contractors, the revenue share calculator, and hiring your first game developer.
Sources
- U.S. Copyright Office, Circular 30: Works Made for Hire
- U.S. Copyright Office, Copyright Law of the United States, Chapter 2: Copyright Ownership and Transfer
Photo: RDNE Stock project via Pexels
