As the esports landscape continues to grow and companies further invest within the space, there is no doubt that the shift towards the professionalization of business practices at all levels of the industry is well underway. This progression is already apparent in that most businesses, teams, and players have started to adopt a more mature outlook on written contracts within the space. For the most part, some type of written contract is now the rule rather than the exception in business transactions, even at the small business and semipro levels. While this approach is positive for the future of the industry since contracts should provide both parties in a transaction with necessary protections, the value of a contract can be in jeopardy if proper business practices are not instituted.
Disputes in business transactions can arise at any level of the deal so it’s important for all businesses (yes, streamers are businesses too) to take steps to ensure that they will be able to protect themselves if a problem were to arise in the future. No one likes to think that when entering a contract, there may be disputes in time, but implementing some simple business practices at the outset of any deal can help make the resolution of any potential dispute easier. Here are some tips that will help prevent problems from occurring, and may assist you down the line if there is ever a contractual dispute:
1. Do Your Due Diligence
While this may seem like an unnecessarily obvious step, research the other party to the deal prior to entering into an agreement with them. Our trusting human nature can sometimes be harmful in newer industries where bad actors look to prey on inexperienced business owners. Unfortunately, esports is no different. There are a number of very public examples (see here) where people have falsely represented who they are or who they work for in order to reap their own gain. For example, someone may represent that they work for a company does not actually exist, have high valued accounts which don’t exist, or represent that they work for a company, when they actually do not, in order to trick a person into entering into an agreement for whatever reason. Doing a quick search of the company or person you are dealing on websites like Google, LinkedIn, and even Twitter, can help you better determine whether the other party is reliable and prevent you from entering into a partnership with people who may be acting fraudulently.
2. Retain All Communications
Keeping a record of all communications (emails, texts, discord messages, etc.) with the sponsor throughout the span of your relationship can also be beneficial if done so in a responsible manner. Maintaining communications from initial outreach, to negotiation, and through the actual term of the agreement, will help provide you with concrete evidence to validate your claim if there is ever a dispute regarding the terms or intention of an agreement. This is especially necessary when communicating orally over the phone or through online voice chats, where details can easily get lost or “forgotten” between the parties. It is always a good practice to send a follow-up email to the other party after discussing anything significant in the manner. Doing so provides both parties with clarity as to what was discussed, which can eliminate any immediate confusion.
3. Retain All Contracts and Corresponding Information
Although written contracts have become more of a standard practice within the esports industry over the past few years, there is still an element of unpredictability that transpires in many of these transactions. Oftentimes, parties will agree to modify conditions of an existing agreement during its term, which can result in multiple separate independent agreements. It is good practice to keep track of ALL of these agreements on file in an organized manner in case of a dispute. This way, if a party tries to argue that it only agreed to certain terms from the original agreement, you will be able to provide supporting evidence proving otherwise. Without having these documents available, it would be much more difficult to substantiate your claims. Importantly, this sentiment also applies to any amendments to a contract. Additionally, it is also helpful to preserve any audit trail from websites where you have electronically signed an agreement. This audit trail can prove to be useful if the opposing party ever tries to contest the authenticity of a signature, which, unfortunately, happens far too often. An audit trail will verify the name of the user that executed the agreement, the date it was signed, and sometimes, the IP address of the signatories.
While these steps may seem basic, it is surprising how often little steps like these are not taken. With so many deals being completed, and frankly, being busy operating the business itself, it is easy for businesses to become unorganized and lose track of every detail of its dealings. Instituting simple business practices like saving all contracts from your email into your hard drive, scanning each physical agreement onto your computer, and sorting/maintaining all communications with contracted parties can save you time and money if a problem were to arise. And as always, do your due diligence before entering into an agreement!
(Photo used under creative commons license. The original photo can be accessed here)
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