Hi I am UK based and I'm recently forming a team to develop a game. I'm the lead developer and will be bringing on ~5 other artists to create content such as models, textures and music.

For the moment, I have not formed an official company, to avoid the time sink of all the paperwork, contract writing and so on. But without agreements/contracts/licences in place as I understand it, an artist on my team could pull out at any moment and reserve the right to take all their content with them.

To prevent this, I would like to have them upload their content to my website when they are done with it, and to include a licence in that directory that says something along the lines of

"By uploading your content files to this directory, you agree to transfer ownership of your files to the lead developer Alex Lynch, in exchange for payment from the revenue of the game".

I hope this would be enough, until I form a real company and get signed contracts from them.

>> I hope this would be enough, until I form a real company and get signed contracts from them.

unlikely.

odds are you'll need a lawyer and a contract for them to sign before they even turn on their PCs start working. or you could be hating life later.

one alternative is a network of sole proprietorships. every team member is a separate business. when an artist delivers an asset, they sell it to you outright. you pay them, or owe them money. and now its your bitmap, not theirs. no contracts. just simple bills of sale and possibly IOU notes. if you want to pay in royalty percentages, or "shares", you'll probably need a contract. but for simple cash and carry transactions between two individuals, a bill of sale is sufficient, just like buying a used car directly from the private owner.

"By uploading your content files to this directory, you agree to transfer ownership of your files to the lead developer Alex Lynch, in exchange for payment from the revenue of the game"

That, by itself, is a terrible contract that no one should sign. What game? Are you allowed to use the artwork in other games after this one? Can they still use it in their portfolios? How much is the payment? When does the payment occur? What happens if you miss the payment? When exactly do you become the owner of the artwork, and what rights do you and the artist have to terminate the deal in the meantime, and what consequences does that have? If you back out and never release the game, can the artist sue you for the money that was promised? etc, etc. A bad contract not any better than just a handshake and a promise :wink:

You really should register a company at least -- even a sole trader, which is often free -- and also talk to an accountant, and a lawyer. Registering the company and getting an accountant will save you money in the long run. e.g. There may be tax implications of the development work at the start, which can actually help you if done right...

If you're really going to skimp it though, look at contract().

"you agree to transfer ownership of your files to the lead developer " - okay, so you own the files. That doesn't mean you now own all the rights attached to the work that is stored in those files.

In my opinion it's better to have artists agree to give you an unrestricted and irrevocable licence to use the artwork that they supply to you. You probably want to ask for the licence to be exclusive as well, although you may want to make exceptions for their portfolios (etc).

Note that some jurisdictions don't allow people to give up their copyrights so the best you can get is a licence.

Note also that some jurisdictions won't hold a contract binding unless 'consideration' has occurred (i.e. payment or equivalent) and the mere promise of it may not be enough if there is no guarantee of it ever being delivered. I'm not sure how the UK handles this, or whether you have any overseas artists involved.

I am UK based

I'm the lead developer and will be bringing on ~5 other artists

I have not formed an official company to avoid the time sink of all the paperwork, contract writing and so on. But without agreements/contracts/licences in place as I understand it, an artist on my team could pull out at any moment and reserve the right to take all their content with them.

I hope this would be enough, until I form a real company and get signed contracts from them.

When you start to "bring on" other people to your project it is time to stop avoiding the paperwork.

In the US I would recommend reading books on starting a business, visiting the government's local Small Business Administration office, and talking with a business lawyer to help you get all the forms and agreements you need.

Since it is the UK I would change it slightly: Read books on starting a business in the UK, visit your local {whatever it is called} office who can tell you what you need to know, and talk to a business legal person {called a solicitor?} to help you get all the forms and agreements you need.

Once you start to "bring on" people you enter the land of contracts, legal covenants, and employment law. The consequences for getting something wrong can cost a fortune and even land you in jail. Make sure you get it right BEFORE you go down the road.

What frob said. At the very least, you need a Collaboration Agreement.
Mona Ibrahim wrote a great article, at http://maientertainmentlaw.com/2008/11/collaboration/. Mona also wrote:

http://www.gamedev.net/blog/1394/entry-2254033-what-happens-when-you-don%E2%80%99t-have-a-written-agreement-part-1-contract-basics/
What happens when you don't have a written agreement [part 1, contract basics]

http://www.gamedev.net/blog/1394/entry-2254080-what-happens-when-you-don%E2%80%99t-have-a-written-agreement-part-2-real-life-application/
What happens when you don't have a written agreement [part 2, real life application]

Hi all thanks for the comments, gave me a lot to think about.

I'm leaning more now to just letting my artists reserve the right to pull out their content at any time, and hopefully to foster enough trust that they won't feel they need to do that. As the game approaches a kickstarter/release though, I will form an official company and get contracts done so everyone gets payment.

I'm leaning more now to just letting my artists reserve the right to pull out their content at any time, and hopefully to foster enough trust that they won't feel they need to do that. As the game approaches a kickstarter/release though, I will form an official company and get contracts done so everyone gets payment.

If "at any time" means after you've already released the game, or right before you release your game, that permits them to hold critical content hostage when you don't have enough time to replace it.

There is not much you can do without employing them, thus compensating them with nice money.

They can negotiate final royalty compensation as tough as they want.

You will have three options:

win/win

win/loose

loose/loose

It will be always in your power to avoid the third one, just do not be too stuborn and proud about your coding part, I would advice you to be equal/equal-like, since the beginning, with someone who donates their time and skill to the game.