Drafts do not come with contracts attached?

[dave2008]

There seems to be a lot of confusion around the idea of what a draft is and can it include a contract. While I have no real idea if the OGL 1.1 and its Term Sheet where presented as a "draft" or not (I have another thread discussing that: 1.1/Terms ), a contract can absolutely be sent as a draft.

I am an architect and my company routinely sends and receives contract drafts. These drafts always have signature lines and are sometimes even signed. They are still drafts. They are sent to the client for review and comment. Typically, if the terms are acceptable the document can be signed, but it is understood that the terms are negotiable. Here are two proposal for a project I worked on (redacted by me).

This first contract (1st & last page) was our standard proposal at the time and this document was already the 2nd revision sent to the client. You can see revision noted on the last page and my boss even signed it. However, this ended up going to a 3rd revision before the client signed.

This second contract (1st and last page) is an AIA (American Institute of Architects) contract we regularly send to clients as draft. This contract was sent un-signed by my boss as it was assumed there may be additional revisions.

In both cases nothing in the document itself called it as a draft or that it was negotiable. However, it was understood by both parties that it was. Sometimes this is through a phone conversation or the body of an email. Sometimes who have a client familiar with contracts and they just understand that these things are negotiable.

As @Ruin Explorer has said, contracts are drafts until the are not. So, the OGL 1.1 and the Term Sheet definitely could have been a draft and technically is a draft until signed by both parties. However, what we don't know is how the Term Sheet was proposed to the 3PP under NDA. When know one lawyer who reviewed the Term Sheet (see link above) admitted it was negotiable, but that he had the "impression" there was not much room for negotiation. It seems WotC should have been, at the very least, more clear that the term sheet & OGL were drafts, it that was the intent.

Anyway, I just wanted to clear up that drafts can have contracts and contracts can be drafts.

 

[Enrahim2]

There seems to be a lot of confusion around the idea of what a draft is and can it include a contract. While I have no real idea if the OGL 1.1 and its Term Sheet where presented as a "draft" or not (I have another thread discussing that: 1.1/Terms ), a contract can absolutely be sent as a draft.

I am an architect and my company routinely sends and receives contract drafts. These drafts always have signature lines and are sometimes even signed. They are still drafts. They are sent to the client for review and comment. Typically, if the terms are acceptable the document can be signed, but it is understood that the terms are negotiable. Here are two proposal for a project I worked on (redacted by me).

This first contract (1st & last page) was our standard proposal at the time and this document was already the 2nd revision sent to the client. You can see revision noted on the last page and my boss even signed it. However, this ended up going to a 3rd revision before the client signed.

View attachment 275156
View attachment 275157

This second contract (1st and last page) is an AIA (American Institute of Architects) contract we regularly send to clients as draft. This contract was sent un-signed by my boss as it was assumed there may be additional revisions.

View attachment 275158
View attachment 275159

In both cases nothing in the document itself called it as a draft or that it was negotiable. However, it was understood by both parties that it was. Sometimes this is through a phone conversation or the body of an email. Sometimes who have a client familiar with contracts and they just understand that these things are negotiable.

As @Ruin Explorer has said, contracts are drafts until the are not. So, the OGL 1.1 and the Term Sheet definitely could have been a draft and technically is a draft until signed by both parties. However, what we don't know is how the Term Sheet was proposed to the 3PP under NDA. When know one lawyer who reviewed the Term Sheet (see link above) admitted it was negotiable, but that he had the "impression" there was not much room for negotiation. It seems WotC should have been, at the very least, more clear that the term sheet & OGL were drafts, it that was the intent.

Anyway, I just wanted to clear up that drafts can have contracts and contracts can be drafts.

There is one key feature identifying your screenshot as a draft: There are two signature fields, and neither are signed.

If one of the fields had been signed, the situation would have been very different. For electronic documents the practice might differ making it less obvious. However my understanding is that the term sheet they got was the equivalent of such a "draft" with the wizards side presigned. Else I don't think it would not be natural for Gizmodo to state that a signature was expected.

 

[Enrahim2]

You can see revision noted on the last page and my boss even signed it. However, this ended up going to a 3rd revision before the client signed.

I think this is the key difference recognising something as intended as a draft or not. My understanding is that the term sheets came essentially pre signed by wizards. (electronic documents might make this non-obvious though).

 

[Iosue]

I think this is the key difference recognising something as intended as a draft or not. My understanding is that the term sheets came essentially pre signed by wizards. (electronic documents might make this non-obvious though).

I'm not sure we can make that presumption. A term sheet being pre-signed doesn't mean the second party is expected to sign it. It just means that the pre-signing party is perfectly happy with the draft as is, and if the other party is happy as well, then the pre-signing is simply an expedient so that does not need to be any more back and forth. I have sent back for revision any number of contracts that were provisionally signed by the other party.

 

[Lidgar]

I'm not sure we can make that presumption. A term sheet being pre-signed doesn't mean the second party is expected to sign it. It just means that the pre-signing party is perfectly happy with the draft as is, and if the other party is happy as well, then the pre-signing is simply an expedient so that does not need to be any more back and forth. I have sent back for revision any number of contracts that were provisionally signed by the other party.

This. Being pre-signed is fairly regular practice to expedite contracting. The other party can always still mark up with requested changes and send back unsigned.

 

[Gammadoodler]

This seems to be a bit of an argument based on semantics. There is the idea of a draft as incomplete document from the perspective of the person who drafted it vs. the idea of a draft as an incomplete document generally.

In my experience, large public corporations have controls in place to make sure that contracts are reviewed by various stakeholders before those contracts are made available to outside parties for execution.

If it was an executable contract that folks received, it is reasonable to expect that a bunch of people internal to WoTC reviewed and signed off on the version that went out.

Sure, at the end of the day, if that contract version doesn't get executed, then that version is a "draft", but let's not conflate things.

If publishers received an executable contract, it either represented the motivations and expectations of the WoTC/Hasbro stakeholders who reviewed it, or there was a pretty significant breakdown in their internal controls (which is something regulators take pretty seriously for public companies in the Unites States).

This "oh we didn't really mean any of those things in that executable document" version of the word 'draft' just isn't something you should expect to see for a large, publicly-traded companies. It strains credulity because it should.

 

[dave2008]

There is one key feature identifying your screenshot as a draft: There are two signature fields, and neither are signed.

If one of the fields had been signed, the situation would have been very different. For electronic documents the practice might differ making it less obvious. However my understanding is that the term sheet they got was the equivalent of such a "draft" with the wizards side presigned. Else I don't think it would not be natural for Gizmodo to state that a signature was expected.

Actually one was signed by my boss, I just redacted it. However, I will say that now drafts always come unsigned as the signing is handled via DocuSign. These were from about 3 years ago.

 

[dave2008]

I think this is the key difference recognising something as intended as a draft or not. My understanding is that the term sheets came essentially pre signed by wizards. (electronic documents might make this non-obvious though).

If it was via DocuSign, like my firm does now, it would be obvious. But I haven't heard anything about whether or not the term sheets came pre-signed by WotC. Do you have any quotes on that? I didn't see it in the tweets you posted.

 

[briggart]

I'm not sure we can make that presumption. A term sheet being pre-signed doesn't mean the second party is expected to sign it. It just means that the pre-signing party is perfectly happy with the draft as is, and if the other party is happy as well, then the pre-signing is simply an expedient so that does not need to be any more back and forth. I have sent back for revision any number of contracts that were provisionally signed by the other party.

[bolded by my for emphasis] But that is exactly the crux of the matter: people are not mad because they didn't understand that while WotC send around a message that they were going to (figuratively speaking) kill the baby, they would actually have settled for only cutting off three of the baby's fingers. They are mad because WotC was fully ok with killing the baby in the first place.

 

[dave2008]

This seems to be a bit of an argument based on semantics. There is the idea of a draft as incomplete document from the perspective of the person who drafted it vs. the idea of a draft as an incomplete document generally.

In my experience, large public corporations have controls in place to make sure that contracts are reviewed by various stakeholders before those contracts are made available to outside parties for execution.

If it was an executable contract that folks received, it is reasonable to expect that a bunch of people internal to WoTC reviewed and signed off on the version that went out.

Sure, at the end of the day, if that contract version doesn't get executed, then that version is a "draft", but let's not conflate things.

If publishers received an executable contract, it either represented the motivations and expectations of the WoTC/Hasbro stakeholders who reviewed it, or there was a pretty significant breakdown in their internal controls (which is something regulators take pretty seriously for public companies in the Unites States).

This "oh we didn't really mean any of those things in that executable document" version of the word 'draft' just isn't something you should expect to see for a large, publicly-traded companies. It strains credulity because it should.

I agree with you. But this is how people who handle contracts operate. They are used to sending executable contracts that will then get revised. There was a break down in the communication no doubt, but it may or may not have been malicious.

The examples I posted are for the same project. You can see in the revision notes of the first "proposal" the contract is revised to be based on a particular AIA contract (141). However, when we finally got to the AIA contract, we used a different one (143). So quite major changes can happen to an executable "draft" before it gets signed and executed.