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.

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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
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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.

 

[dave2008]

[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.

Yes, I get that, and that is a justifiable response. But I can also see how something like this can be created without realizing that. We know the origin of this was more than 2 years ago. A lot things can happen when people look over something for 2 years and it is easy for things to get lost / misguided. Whatever the case/truth is: WotC messed up big time.

 

[Lazvon]

Agree with everything @dave2008 has said here. I am a dog off the Internet (for all you know), and am responsible for a little over $500M cost center, some years spending close to $350M in acquiring capital (IT HW/SW licenses depreciated over 60-months) and a bit in acquiring intellectual property rights.

I get presigned contracts all the time from vendors looking to close as soon as soon as possible… ABC (Always Be Closing). Obviously those contracts are going through lots of redlines back and forth with me and strategic sourcing for the technical and commercial terms, with legal for all the contractual/governing terms…

Would they love for me to just blindly counter sign the first version they sent over… absolutely, they will take every advantage they can get. That doesn’t mean it is anywhere near the final version they will accept. If we do the negotiations right everyone gave up/compromised on everything less important to them, and kept everything most important.

My opening stance is always, give it to me for free and I will sing your praises from the moutain tops (conferences, testimonials, etc) if it/you actually work as promised. So far no commercially viable company has taken me up on that opening offer, the same as I would not take them up in their opening offer in all likelihood.

I can think of only once or twice someone has presented an acceptable first draft… and they knew our terms we would accept before from prior business or we just told them or gave them our paper. But even our largest suppliers know we will be redlining for a couple weeks before signing and they do repeat $10s (or 100+ in a couple cases) of millions in business each year.

 

[Burt Baccara]

IANAL. I've worked with contracts and with in-house contract attorneys.

The distinction that is getting lost on many people is there is a difference between a contract review between two parties and an open contract. They also leave out that when sending a review copy, even if the contract does not say draft, the accompanying email (or letter) does make clear the intent.

When a vendor sends a contract for our review, it was in a word doc with signature blocks, this is true. It was not marked draft, though the accompanying email always made clear the intent that this was for our review, and if we accepted the terms a final would be sent for signature and that was not sent in an editable format.

Kyle Brink clarified the contracts were sent, and it was a click to agree—while also still maintaining this was only a draft. Conversely based on reports of what the publishers got and saw, no one who received this saw any indication this was a draft and believed it to be final, including the dates.

At best, if this was a draft, it was handled terribly with horrid communication that did not convey what the intent was. This line of reasoning leaves WotC looking completely incompetent, not just miscalculating the community—a view I do not hold.

 

[dave2008]

Kyle Brink clarified the contracts were sent, and it was a click to agree—while also still maintaining this was only a draft. Conversely based on reports of what the publishers got and saw, no one who received this saw any indication this was a draft and believed it to be final, including the dates.

This is wrong and/or misleading on two counts:

1. Kyle said the OGL was a click to through procedure. The OGL is not a contract, but a license. The contract to be signed that everyone is talking about is the Terms Sheet provided to 3PP under NDA.
2. In the Gizmodo article (you can get to from the link in the OP), the lawyer that reviewed the Terms Sheet for a 3PP (the only first hand account I believe) said the Term Sheet did include language that the contract was negotiable. However, he had the "impression" that WotC as not very flexible. It does not explain why he had this impression.

 

[Burt Baccara]

This is wrong and/or misleading on two counts:

1. Kyle said the OGL was a click to through procedure. The OGL is not a contract, but a license. The contract to be signed that everyone is talking about is the Terms Sheet provided to 3PP under NDA.
2. In the Gizmodo article (you can get to from the link in the OP), the lawyer that reviewed the Terms Sheet for a 3PP (the only first hand account I believe) said the Term Sheet did include language that the contract was negotiable. However, he had the "impression" that WotC as not very flexible. It does not explain why he had this impression.

I used the word contract as the OP was talking about contracts.

Splitting hairs between license and contract might be pedantic. From Adobe (I would think their lawyers know which way is up):

A license contract, also known as a license agreement or licensing agreement, is a type of contract where one party (the licensor) grants another party (the licensee) the right to produce, use, sell, and/or display the licensor's protected material.

Yes, Kyle mentioned an NDA, though not how that was agreed to (could have been click-through as well. Kyle mentioned the license, as click-through. Beyond that, there was some mention of some publishers perhaps getting other deals, those could be called term sheets

Term sheets are not contracts, they are just an expression of a possible business transaction and only some of the publishers got these it appears.

 

[dave2008]

I used the word contract as the OP was talking about contracts.

Splitting hairs between license and contract might be pedantic. From Adobe (I would think their lawyers know which way is up):

Yes, Kyle mentioned an NDA, though not how that was agreed to (could have been click-through as well. Kyle mentioned the license, as click-through. Beyond that, there was some mention of some publishers perhaps getting other deals, those could be called term sheets

Term sheets are not contracts, they are just an expression of a possible business transaction and only some of the publishers got these it appears.

OK, my point is the OGL, in any version, was not a document that is signed. You don't sign the OGL 1.0a and you wouldn't have signed the OGL 1.1 and you didn't sign the OGL 1.2. No one, to my knowledge, who has the leaked OGL 1.1 has said it required a signature. They said it came with a separate contract to be signed. They were different things. Some have referred to that contract as Terms Sheet, so I used the same language.

I am not making this stuff, I am just following what everyone else is saying and / or reporting. There are links in both of my threads were you can verify or read these claims by journalist or tubers with "sources."

EDIT: the title of this thread "Drafts don't come with contracts attached" is a quote from a 3PP company talking about the offer they were given. The "draft" in that quote is the OGL and the "contract" is a separate document.

 

[Burt Baccara]

OK, my point is the OGL, in any version, was not a document that is signed. You don't sign the OGL 1.0a and you wouldn't have signed the OGL 1.1 and you didn't sign the OGL 1.2. No one, to my knowledge, who has the leaked OGL 1.1 has said it required a signature. They said it came with a separate contract to be signed. They were different things. Some have referred to that contract as Terms Sheet, so I used the same language.

I am not making this stuff, I am just following what everyone else is saying and / or reporting. There are links in both of my threads were you can verify or read these claims by journalist or tubers with "sources."

EDIT: the title of this thread "Drafts don't come with contracts attached" is a quote from a 3PP company talking about the offer they were given. The "draft" in that quote is the OGL and the "contract" is a separate document.

The language is muddied, maybe by journalists, and also by people like us discussing this—example from the Gizmodo article:

It was expected that third parties would sign these Term Sheets. Noah Downs, a lawyer in the table-top RPG space who was consulted on the conditions of one of these contracts, stated that even though the sheets included language suggesting negotiation was possible, he got the impression there wasn’t much room for change.

Based on this, and Kyle Brink's choice of language, which may or may not be precise as he says he was in the know, but not aware of every detail, as well as Kyles overall story and timeline, which you may or not fully buy into, make it just murky to say the least.

My main point was that 2 parties passing a document back and forth for redlines and approval before making it binding is not the same as what happened here.

 

[dave2008]

My main point was that 2 parties passing a document back and forth for redlines and approval before making it binding is not the same as what happened here.

That may have been the intent though. There was even language in the contract that mentions negotiation (per Gizmodo). However, there was definitely some poor communication and that is on WotC.

Personally I think it is murky. I can definitely see a possibility that both parties came away with different impressions of what was submitted for "review." And that shouldn't be the case for a company as big as WotC.

 

[Snarf Zagyg]

My main point was that 2 parties passing a document back and forth for redlines and approval before making it binding is not the same as what happened here.

Given that we haven't even seen the term sheets, all we have to go on is the reporting.

The reporting is clear-

It was expected that third parties would sign these Term Sheets. Noah Downs, a lawyer in the table-top RPG space who was consulted on the conditions of one of these contracts, stated that even though the sheets included language suggesting negotiation was possible, he got the impression there wasn’t much room for change.

I'm not sure why people are still debating this, but unless and until there are actual documents produced, all we have is reporting stating that the terms were open for negotiation, and, moreover, that this was stated in the term sheet.

 

[Amrûnril]

I'm not sure why people are still debating this, but unless and until there are actual documents produced, all we have is reporting stating that the terms were open for negotiation, and, moreover, that this was stated in the term sheet.

I'm not sure what the terms being open to negotiation is meant to prove though. The underlying point is that Wizards attempted to coerce publishers into new licensing agreements based on the threat that the OGL would be rescinded and replaced with something similar to 1.1. Even if the details of the new agreements were open to negotiation, Wizards clearly intended to revoke the OGL and was actively using the threat of this unethical (and likely unlawful) action as a means of gaining leverage over publishers.