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Filed under: Business •Legal •

Law, nonsense, and predatory dinosaurs

Sympathy for the typo

Pouncing on a typo may seem petty.  For one thing, everyone makes them, and they sometimes survive endless diligent re-readings.  But they can cost big time, and not only when the typo consists of a misplaced decimal point in a dollar amount.  In one famous dispute a telecommunications company risked losing millions because a single misplaced comma made the renewal term ambiguous.  The issue was resolved, but not until a decision, an appeal, and lots of expert testimony about what the placement of a comma signifies.

When typos or just bad drafting cause ambiguity, courts may try to figure out what the parties intended.  Their first step is usually to apply “rules of construction,”  which include such common sense ideas as:

• agreements are generally interpreted against the person that drafted it;
• the words of an agreement should be given their plain and literal meanings;
• interpreting the words of an agreement should produce reasonable rather than absurd results;
• specific provisions are more likely to identify intent than more general provisions; and
• an agreement should be interpreted in a way that makes it enforceable rather than void.

Additional rules apply in particular situations.  As examples, the rules to guide interpretation of an ambiguous copyright license include:

• the clearest language is necessary to divest the author of the fruits of his labor;
• copyright licenses are assumed to prohibit any use not authorized;and
• the burden of demonstrating the existence of a license lies with the person asserting it.

Some mistakes are less understandable

There are typos and ambiguities and misunderstandings, and then there are plain errors—pure nonsense that gets copied from form to form and year to year without thought or justification.  Here’s a very common error that many people have seen so many times it looks correct just because it looks familiar:

Independent contractors.  The relationship between the
Licensor and Licensee is that of independent contractors. Nothing
in this Agreement may be construed to make a Party the agent or
partner of the other.  Neither Party may legally bind the
other Party in any manner. [taken from a software license]

That section is intended to avoid the possibility that by doing business together, the parties could be perceived as “partners.”  Partnership these days is a much overused and misused idea—practically every business lists on its website as partners companies that are really just customers or suppliers.  But a real legal partnership can be created without using the word “partner” and even without anything in writing.  Partnership can be inferred when two or more people hold themselves out as doing business together (for example by using a name such as “Smith & Jones”).

The problem is that in a real partnership, partners ordinarily share profits, losses, and decision-making.  If Smith orders a truckload of CD blanks, Jones may have to pay for them—Smith and Jones being equally liable.  Accordingly, avoiding the appearance of partnership when there isn’t one is a good idea, and the sentence about neither party being “the agent or partner of the other” make the appropriate point at least between the people who agree to it.

So what’s the big deal?

To be extra-convincing, the section doesn’t just say that the parties are not partners.  It also says their relationship is “that of independent contractors” which is pure nonsense.

Part of the problem is a missing word.  When an employer hires someone, we know what to call them: employer and employee.  But when a someone hires a contractor, we call them the contractor and… what?  The person that hired the contractor.  In contracting there is no equivalent of the word “employer.”

But the bigger problem of saying “the relationship between the parties is that of independent contractors” is contractors don’t have a relationship with each other.  Even when two parties really work as contractors for the same company, there is no default set of rules that defines their power or liability relationship to each other.

The reality is when one party provides software under a license and the other agrees to license it (as in the example above) neither is a contractor: they’re licensor and licensee, and the section could just say so (or say they are employer and employee, or bank and borrower, or whatever the situation happens to be).  But that can problematic too, because often more is going on.  For example in a licensing situation, licensors often also provide support services (making the licensor also a service provider).  Licensees sometimes have a right to change the software as long as they give back to the licensor the right to also use the changes (making the licensee also a licensor).  In situations like those, identifying parties only as “Licensor” and “Licensee” would overly simplistic, and partly inaccurate.

The simplest improvement would be to cut out the first line entirely, leaving this:

Nothing in this Agreement may be construed to make a Party
the agent or partner of the other.  Neither Party may legally
bind the other Party in any manner.

Except that the last line doesn’t entirely make sense either. The parties certainly do intend to bind each other—at least to the agreement they’re signing.  So in the end, the best thing is to chuck the section entirely, and replace it with something like this:

Relationship of the parties.  Neither Party, by reason of this
agreement or its performance (1) is an agent, representative,
partner or joint-venturer of the other Party, or (2) is granted
any right, power or authority to enter into any agreement, incur
any obligation or liability, or to otherwise bind or speak
on behalf of the other Party. [taken from a software license]

But the hunt for law turned nonsense doesn’t end there.

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Thanks for the interesting article, Charles.  Welcome to PVC!

We had an interesting discussion on Cinematography Mailing List recently about photographing buildings and billboards that are out in the open and hard to frame out.  Also, oftentimes the film calls for an establishing shot of a city, but evidently some buildings are copyright-protected, and we were trying to determine if it’s legal to incorporate shots of them without paying a fee. 

Is there any general advice you could give on this issue, perhaps in an upcoming article?  One person claimed that it’s OK if you incorporate 4 or more buildings, because it becomes a ‘scenic’ shot verses a shot of any one building.  Also, there are helicopter shots, and sometimes shop signs are in the background at malls, street scenes, etc.

Thank you very much for offering advice here on PVC.
-Graham

Posted by Graham Futerfas  on  01/26  at  10:35 AM

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Hi, Graham!  And thanks for the welcome.

And thanks for suggesting the relationship of film v. architectural copyrights (and film v. the copyright in billboards) as a subject for an article.  A related and more difficult problem arises in computer games where the scenery is based on a real city.

Charles

PS: This isn’t a complete answer, but check out:

(1) http://www.bitlaw.com/source/17usc/120.html (USA’s Copyright Act S.120) which among other things says:

“The copyright in an architectural work that has been constructed does not include the right to prevent the making, distributing, or public display of pictures, paintings, photographs, or other pictorial representations of the work, if the building in which the work is embodied is located in or ordinarily visible from a public place.”

(2) http://www.copyright.gov/title37/202.html (Regualations for the Copyright Act S.220)which among other things says:

(d) Works excluded [from Copyright Registration]. The following structures, features, or works cannot be registered:

(1) Structures other than buildings. Structures other than buildings, such as bridges, cloverleafs, dams, walkways, tents, recreational vehicles, mobile homes, and boats.

(2) Standard features. Standard configurations of spaces, and individual standard features, such as windows, doors, and other staple building components.

(3) Pre-December 1, 1990 building designs —(i) Published building designs. The designs of buildings where the plans or drawings of the building were published before December 1, 1990, or the buildings were constructed or otherwise published before December 1, 1990.

Posted by CharlesBKramer  on  01/28  at  06:18 AM

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So, you “critiqued” some piece of complete gibberish; what’s your point?  It was probably hashed together by some sloppy, careless egomaniac who is arrogant and underestimating enough of other people to figure that they’re “not smart enough” to figure it out(and, obviously, albeit ironically, that he or she is).  And, if you’re naive enough to take it seriously, then the author no doubt has some bridge down by Brooklyn that he or she is willing to sell you at a bargain basement price…such people do, in fact, exist.  Hint: take a look around you.

Posted by .(JavaScript must be enabled to view this email address)  on  12/08  at  02:30 AM

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Hi, NYSecjd, thanks for reading my piece, but perhaps you missed the point that *lots* of lawyers copy forms mindlessly—to the point where common phrases are accepted just because they are common.  I’ve had the experience of quite senior lawyers trying to justify clauses because “every contract” contains them—which is true.  But they’re still wrong.

Charles B. Kramer

Posted by CharlesBKramer  on  12/26  at  09:49 PM

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