"Famous Last Words"

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DISCLAIMER: This column is intended for general educational and entertainment purposes and is not legal advice. Every situation is unique. Anyone entering into a contract should have a lawyer who can provide counsel.

by Jim Charne
Attorney at Law

Time is of the Essence (December 2001)

Dear Jim,

We signed our deal last week, but I'm wondering what this means in the contract:

"Time shall be of the essence of this Agreement."

Maybe we should have checked before we signed?

HOPE NOT IN TEXAS

Dear Hope Not:

Will you finish the project on time? Hope so.

The famous "Time is of the essence" clause means if you are one day late, you are in material breach and the publisher can terminate the agreement.

Many publishers use this as one more tool to gain leverage over a developer.

Without this language, missing your delivery date would not necessarily be a material breach. The publisher would have to prove he had been damaged as a result of the late delivery.

By adding "time is of the essence," this burden is removed and there is agreement between the parties that any late delivery, even by one day, equals material breach.

Life is of the essence; love is of the essence; fine wine is of the essence. But unless there is an especially compelling reason (like maybe the Harry Potter movie opening this week with supporting games that you are developing), time in a development contract, and from a developer's perspective, should not be of the essence.

Is there language in your contract that has you scratching your head? Found something confusing or worse? Submit a question to Jim for developer-oriented analysis in this Famous Last Words column (IGDA members only).

Jim's Bio

Jim Charne practices law in Santa Monica, CA (www.charnelaw.com) where he represents developers, designers, and other clients in the games industry. Jim was the proud recipient of an IGDA M.V.P. Award at GDC 2006, is chair of the annual GDC legal and business tutorial, and a member of the Advisory Board of G.A.N.G. From 1998 to 2001, Jim served as President of the Academy of Interactive Arts and Sciences.