Contracts only protect our clients so much. And that protection is even less when non-negotiable terms are imposed on them. It's an uncomfortable and difficult spot to be in, especially so for clients whose entire business runs on a platform that controls all the rules and can change those anytime.
This topic came up in our webinar yesterday about video game contracts with Adam Starr, General Counsel of Do Big Studios, and Keith Cooper, a partner at Cooper & Iravani. Adam and Keith described a contracting structure for platforms like Roblox and Fortnite that leave content creators completely exposed.
How should we be counseling our clients facing these non-negotiable contract terms?
Adam's advice is to treat these powerful counterparties respectfully and remember they are the ones paying the client. As he framed it, this is not just a contractual asymmetry. It is also a relationship asymmetry. He warned that if the client is a jerk or blasts them on social media, they can take action the client will never be able to trace. It could be they tweak an algorithm or other things they do on the back end that the client will never find out about.
This happens all the time and flies under the radar. Companies make quiet adjustments in the background that the client cannot see, cannot prove, and cannot trace back to a cause. Our client's traffic drops, or their payment terms impact our client's revenue. No term was violated, so no remedy applies. The contract may say nothing.
Here’s my takeaway.
My takeaway from Adam's comments is that we should be treating the positive relationship as the protection when contracts leave clients exposed. A client in good standing gives the other side little reason to look closely. A client who picks public fights invites discretion to run against them.
Advising our clients to be a good partner can sound like soft advice. In a dependent relationship, it may be the most reliable risk control our client has.
The lesson reaches well beyond gaming. Many of our clients build their business on a SaaS provider, an app store, a marketplace, or a single large customer they cannot push back on. The contract sets the floor. The relationship sets much of what happens above it. We spend our hours on the floor because that is what we can draft. The risks above it often do more damage.
I'm not saying the contract doesn't matter. What I am saying, what I took away from Adam's comments, is that the contract is not the whole picture, and our advice should say so. We can still fight for the terms worth fighting for. We can also tell the client the truth about the terms we cannot get.
Make sure the client understands how much rides on a relationship they cannot control. Flag the discretionary risks the contract does not cover, the quiet ones with no paper trail. And tell the client that how they treat the other side is part of how they protect themselves.
