To Dynamo's hypothetical...

That can be a problem. And unfortunately, it's you who ("Bill") would ultimately be on the hook.
That's because it is you who is (without license) redistributing the work that Bob gave you.
So you're the one who gets sued.
Now, you can of course turn around and sue Bob. But if Bob doesn't have any assets from which to pay you (or say he declares bankruptcy), then you're still on the hook..
That's why, btw, most larger companies require their contractors (including composers) to have "Errors and Omissions" insurance, usually called "E and O." That's an insurance policy Bob would buy that will pay you when you get sued because Bob gave you music that infringed on someone else's copyright.

It gets worse actually! True story related to me last GDC by an audio director for a major company..
They contracted out music for their game, as they usually do. After it's released, they get a letter from a lawyer representing a sample library!. The library recognized their sounds in the game's music, looked up the composer and determined that he wasn't a customer-- that he was using their sample library illegally...
Long story short, the game publisher ended up paying some amount of money to the sample library company.

Brian
Brian Schmidt Studios

Brian - but what about indemnity clauses? If a company or person was able to set up a situation where the contract states, officially, that the contractor agrees to indemnify and hold harmless the owner (or buyer) of and from any and all claims, demands, losses, causes of action, damage, lawsuits, judgments, including attorneys' fees and costs, but only to the extent caused by, arising out of, or relating to the work of Contractor - it sure reads like it would be the contractor on the hook. Not the buyer. Granted... there may be a legal chain of thought (or processes) to eventually get to that stage and put the right person on the proverbial hook. I agree with everything else you stated.

Nathan-- The person suing you doesn't really care about the agreement you and I have-- they have an agreement with you and you alone and you are the one making unauthorized use of the music (presumably by distributing it with your game)

If I were a composer and you hired me, I could certainly sign a clause indemnifying you against any and all claims. All that means is that if you get sued by a 3rd party because of the music I wrote and gave to you, I'll pay your costs and settlements. But if I go bankrupt, you're out of luck. That's the problem with indemnity clauses: they're only as strong as the financial health of the person/entity signing it. So you're still on the hook to the 3rd party and you can't get anything from me.

In general as a composer, it's generally bad to have an indemnification clause in your contract. Depending on how they're worded, you may be on the hook for legal fees even for flagrantly dumb lawsuits. Best thing (if it's there) is to ask it be struck. Short of that, limit the liability to the $ value of the contract. That way, you won't be on the hook for a million dollar lawsuit because of a $50,000 composing contract..

Brian Schmidt Studios

Well put Brian and thanks for the response.

That way, you won't be on the hook for a million dollar lawsuit because of a $50,000 composing contract.
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The contractor agrees to indemnify and hold harmless the owner (or buyer) of and from any and all claims, demands, losses, causes of action, damage, lawsuits, judgments, including attorneys' fees and costs, but only to the extent caused by, arising out of, or relating to the work of Contractor.
[/quote]

Definitely understand but if the indemnification clause states that it only applies to the work of the contractor (in this case music) then that would help avoid such situations. May not be a failsafe method but it is something. Thanks for the interesting discussion!

Actually that indemnification clause is quite broad. The phrase "but only to the extent....relating to the work of contractor" just means that if you delivered music, and there's a problem with the music, your're on the hook for at least part. (it does imply that there might be a shared blame--which means shared liability)

Another problem with that example is that you're on the hook for anything... claims, demands, losses, etc... That's a lot, and includes the cost of defending against frivolous cases. If they demand an indemnification clause, a reasonable accommodation to ask for is that it be limited to awarded judgments.

[color=#000000][font=Arial, Helvetica, sans-serif]Finally, you might want to try to limit damages to the amount of the contract. For example[/font]
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"In no event shall the maximum liability hereunder exceed the amount actually paid to Contractor under this contract."[/font]


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Brian Schmidt[/font]:
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GameSoundCon[/font]
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p.s. No one told me I practically needed to become a paralegal just to compose music for videogames![/font]