Yes, Virginia, There Is An Indemnity Clause

December 20, 2011 by Josh Selig

I have never been good with contracts.  Though I love most forms of language, I find the language of contracts to be absolutely mind numbing.  Whenever we’re reviewing deals at Little Airplane, I typically glaze over halfway through the first page and, for the rest of the meeting, I simply turn the pages when everyone else does. So far this approach seems to have served me pretty well, mostly because I surround myself with people who are way smarter than I am (which is pretty much everyone on my staff.)  At some point, one of these folks will bring me the deals with lots of little red Post-It arrows on them to indicate where I should sign.  (They don’t allow me to date the contracts myself as I am not so good with numbers either.)  I pretend to give these contracts a final “once over,” then I nod approvingly and sign my name with a flourish.  Once this ritual is complete, I make a hasty retreat back to the orchestra room where I can sit quietly by myself and drift off into my world of singing and dancing Small Potatoes.

But this week I had a rather unique contractual experience that I would like to share with you because it may have been the first time I actually understood each and every word in one of my own deals.  For the past few months, I have been in discussions with another company about collaborating on a new preschool show.  These are people I have known and trusted for years so, when we got close enough to put something on paper, I simply wrote out the basic terms in an e-mail using plain and simple English.

I ran it by my lawyer and he added a few of his usual “therewiths” and then I e-mailed it to the other company and their lawyer added a few “mutually agreeds” and, before we knew it, everything fell happily and painlessly into place.  There was simply nothing we didn’t agree on.

But then something really extraordinary happened.  The other company suggested that we print out and sign the e-mail term sheet.  Sign the e-mail term sheet? Surely this can’t be possible, I thought.  What about all the crap in the back of all my other deals?  Don’t we need to put all that in?  Those pages and pages of turgid and impenetrable legalese that I never ever read and cannot understand?

So, I called up our very brilliant “friendly-but-firm” lawyer who advises me on everything from my company to my relationship and I brought him up to speed on this latest conundrum.  I was absolutely certain that he would laugh at the mere suggestion of me signing an e-mail exchange.  After all, didn’t our deals usually weigh a few kilos?  But he did not laugh.  In fact, he simply re-read the e-mail and said, “Sure, you can sign that.  It’s good to go.”

Good to go?  Good to go?! I was amazed!  I was thrilled!  I don’t know how to operate our company printer but, if I did, I would have printed and signed the e-mail right there on the spot!  I was so happy and so heartened by the fact that a simple and understandable seven-point e-mail term sheet could suffice as a binding contract!  This was new to me and it was quite exciting because I have always been a person of my word and, if it were up to me, we would all get by on handshakes over Guinness and signed e-mails.

Contracts for preschool shows have always felt so odd to me, almost like reading the chemical breakdown of a piece of lemon meringue pie before getting to eat it.  After all, who wants to think about “acts of God” or “force majeure” when you’re creating some new cuteness for a toddler?  But, this week, I was able to have my pie and eat it, too.

PS:  Due to the holidays, there will be no blog on Tuesday, December 26 and the next blog will appear on Tuesday, January 3.  On behalf of all of us at Little Airplane, I want to wish you a very happy and healthy holiday season.