A short-form publisher's agreement functions in the video game industry as a succinct statement of intent to establish core commercial terms, such as development financing and revenue sharing, before parties commit to heavy legal negotiation costs. The long-form is the subsequent, comprehensive contract that legally enforces these terms in detail and expands them to include complex clauses on royalty calculations, audit rights and contract termination. While the short-form is often erroneously presented as ‘non-binding,’ a careless approach under Belgian contract law results in possible pre-contractual liability, while the transition to the long-form requires extreme precision on net receipts and the reversion of intellectual property rights to ensure the commercial viability of a game studio.
The functional approach to the negotiation phase in the game industry
The creation of a partnership between an independent game studio and a global publisher is rarely a one-step process. The industry almost universally uses a phased and strategic approach, beginning with a short-form agreement, often referred to as a Term Sheet, Letter of Intent (LoI) or Memorandum of Understanding (MoU), followed by an exhaustive long-form agreement. The rationale behind this two-stage rocket is fundamentally economic and pragmatic in nature: parties want to avoid incurring significant legal costs in drafting and negotiating a 30- to 50-page contract when there is no fundamental agreement on the core commercial principles that will carry the collaboration.
The short-form agreement is usually a two- to four-page document that lays down the absolute cornerstones of the intended collaboration. It focuses only on the vital parameters: the amount of development funding (development advances), the revenue share key (revenue share), the intended platforms (PC, consoles, mobile devices), key milestones (milestone schedule) and a rudimentary allocation of intellectual property rights (IP rights). These efficiencies allow the developer to often start preparatory work and allocate personnel as early as the beginning, knowing that the broad outlines of the project are in place.
However, the perception that this preparatory document is a mere formality with no further consequences is a trap for independent developers. Publishers usually regard the terms in a short-form, even when legally qualified as non-binding in the header, as a moral and commercial anchor. Any attempt by the developer to renegotiate or improve these core terms at a later stage, during long-form negotiations, is often met with resistance. As a result, the short-form is de facto the developer's most important tool for shaping the basis of the deal; it is precisely at this stage that the bargaining leverage is greatest and the contours of commercial success or failure are drawn.
The short-form agreement and pre-contractual liability under Belgian law
The characterization of a short-form agreement as not binding is a misleading simplification under Belgian law that masks significant risks. In Book 5 of the Civil Code the Belgian legislator has codified the pre-contractual phase and the associated liability regimes in an explicit, detailed and mandatory manner.
Freedom of contract versus the requirements of good faith
Article 5.14 of the Civil Code enshrines the fundamental principle of contractual freedom, which implies that natural and legal persons are free to enter into a contract or not, to choose their co-contractor and to determine the content of their agreement autonomously, provided that they respect mandatory legal provisions and public order. This contractual freedom is complemented by Article 5.15 of the Civil Code, which stipulates that parties are free to initiate, conduct and, in due course, terminate pre-contractual negotiations.
However, this freedom is by no means absolute in the Belgian legal system. It is strictly limited by the objective requirements of good faith and the prohibition of abuse of rights. During this pre-contractual phase, both parties have an active information duty (codified in Article 5.16 of the Civil Code). The parties must proactively provide each other with the information required by law, good faith and prevailing industry practice. In doing so, case law adjudicates taking into account the capacity of the parties (e.g., a start-up indie studio versus a publicly traded multinational), their reasonable expectations and the technical complexity of the subject matter of the contract. A breach of this duty of disclosure, such as by concealing the fact that a publisher is in dire financial straits or that a developer does not have the required IP rights to an engine, can lead not only to liability, but also to the absolute or relative nullity of the subsequent contract for defects of will such as fraud or mistake.
The scope of pre-contractual liability
The most far-reaching impact for the practice of publishing contracts can be found in Article 5.17 of the Civil Code, which defines pre-contractual liability (historically known as culpa in contrahendo) structures. When a publisher or developer abruptly, without legitimate reason and erroneously breaks off negotiations after signing a short-form, there may be extra-contractual liability.
The basic sanction for such erroneous impairment is that the aggrieved party must be placed back in the hypothetical situation in which it would have been had there been no negotiation at all. This concept is known as compensation for adverse contract interest. For a game studio, this includes reimbursement for uselessly incurred costs (attorneys' fees, relocation costs, the creation of specific prototypes or vertical slices that served exclusively for this publisher) and the loss of opportunities to engage with other, benevolent publishers.
In addition, when the negotiations or the content of the short-form created a legitimate expectation that the contract would be concluded “beyond a reasonable doubt,” liability may extend to the recovery of the loss of anticipated net benefits from the non-concluded contract. This is compensation for the positive contract interest. For a developer who has reserved specific capacity based on an extremely detailed term sheet, formally rejected other lucrative projects, and incurred significant preparatory costs, the publisher's erroneous breakdown of negotiations may result in a claim for damages that includes the video game's lost profits, completely regardless of the non-binding clause in the header of the document.
Moreover, Belgian courts often also look at the parties' actual performance and will. As soon as the communication shows that there is actual consensus of will on all essential and substantial elements of the agreement (such as the exact game, the license price, the royalty distribution and the exclusivity area), it is often considered that a fully-fledged and binding agreement has already been established. This principle can only be averted if parties have formulated explicit conditions precedent, such as the formal and unconditional approval by a board of directors or the successful completion of a technical due diligence.
The transition to the final publisher's agreement (long-form)
Once the pre-contract hurdle is successfully cleared, the focus of negotiations shifts to the drafting of the long-form agreement. This is the final, binding contract that will dictate the legal and commercial relationship between the parties throughout the entire life cycle of the video game - from pre-production to post-launch support and server deprecation. The long-form replaces the preliminary document in its entirety, activating particularly specific contract law mechanisms and hazards.
The operation of the entire agreement clause
One of the most critical, yet most often ignored by non-lawyers, clauses in this transitional phase is the integration clause, commonly referred to in Anglo-Saxon practice as the ‘entire agreement clause'. This formal clause explicitly stipulates that the final, written contract contains the absolute and exclusive agreement between the parties and consequently definitively supersedes and nullifies all previous oral or written agreements, e-mail correspondence, Slack messages and, fundamentally, the signed short-form agreement.
Under the standard Belgian rules of contract interpretation, as codified in Article 5.64 of the Civil Code, a judge must primarily look for the true, common intention of the parties, not blindly adhering to the mere literal meaning of the words. A judge may normally consider the performance of the contract and pre-contractual communications to interpret that will. However, the addition of a strictly entire agreement clause objectifies the contract and formally excludes the probative value of earlier documents in most circumstances.
The practical implication of this for independent game developers is existential. If during the short-form phase a studio has secured a valuable, divergent concession-for example, the explicit retention of intellectual property rights to the core engine, the exclusion of merchandising from the revenue share, or the right to independently develop sequels-but fails to transfer this concession verbatim and accurately (the requirement of carry-over language) to the long-form agreement, the entire agreement clause will legally erase this earlier victory. It is therefore important that the text of the long-form be a minute, faithful and exhaustive representation of absolutely all commercial considerations recorded during the intent phase.
Offer, acceptance and the ‘Battle of Forms’
The final formation of the long-form is through the classic legal mechanism of offer and acceptance, which is extensively regulated in Articles 5.18 to 5.21 of the Civil Code. A full-fledged contract is created only by the unconditional acceptance of an offer that includes all the essential and substantial components and expresses the clear desire to be legally bound.
A phenomenon that occurs frequently in the software and gaming sector is the so-called battle of forms, or the battle of general terms and conditions. This arises in scenarios where complex contracts are flanked by standard documents. For example, when a developer sends an invoice for a milestone achieved that includes its own terms and conditions on the back, while the publisher makes payment with express reference to its own terms of purchase and liability.
Historically, this led to legal debates before courts as to which set of conditions now prevailed (the first-shot rule where the first provider wins, versus the last-shot rule with the latter document prevailing without protest). Book 5 of the Civil Code provides an effective solution and legal certainty in this regard through the introduction of the so-called ‘knock-out rule,’ enshrined in Article 5.23 of the Civil Code.
The law now provides that if offer and acceptance refer to conflicting general terms and conditions, the contract is nevertheless concluded. In that case, both sets of general terms and conditions form an integral part of the contract, however, with an absolute exception for the incompatible clauses. These conflicting clauses mutually eliminate each other (they are ‘knocked out’), after which the common law fills the gap. If a publisher or developer pertinently wishes to avoid this knockout rule and demands the exclusive application of its own terms and conditions, that party must expressly state in advance, or immediately upon receipt of the conflicting terms and conditions, beyond the general terms and conditions, that it does not wish to be bound by such an amputated contract. Simply including a standard phrase in its own terms and conditions that “other terms and conditions are expressly rejected” no longer has any effect under the new law.
Financial arrangement: net receipts, deductions and the recoupment mechanism
The technological perfection of a video game does not guarantee the commercial success of the studio; that depends exclusively on the financial definitions anchored in the long-form. Whereas the short-form is limited to naming a rudimentary allocation key (a ‘revenue split’ of, say, 50/50 or 30/70 in favor of the publisher), the long-form contains the mechanisms that determine exactly what this agreed-upon percentage is applied to in reality. A flawed definition can result in a highly successful game that turns over millions draining the developer financially.
The definition and dangers of net receipts
Royalties are almost never calculated on gross revenue in the modern gaming industry. In both Europe and North America, publishing contracts use the notion of “net receipts” or “Net Revenue.” This concept refers to gross revenue minus an exhaustive set of predefined, contractual deductions.
The core of the contractual negotiation focuses on what deductions are permissible and legitimate by the publisher before the remaining funds are distributed as a royalty base. Legitimate, industry-wide standard deductions typically include:
- Platform fees and distribution costs: Digital distribution platforms and console manufacturers such as Steam (Valve), PlayStation Network (Sony), Xbox Live (Microsoft) or the App Store (Apple) routinely withhold a significant percentage (historically 30%, sometimes stepped down) from the sale price of the game before passing on funds to the publisher.
- Refunds and Chargebacks: Revenues returned to consumers who legitimately exercise their return rights, e.g. through the automated Steam return policy (played less than 2 hours and within 14 days).
- Taxes and duties: Specific local sales taxes, value added tax (VAT) or customs duties in the areas where the game is operated.
The danger for the game developer lies in the deliberately created gray areas and catch-all clauses. Publishers routinely attempt to deduct marketing costs, localization costs, quality assurance (QA) costs, or completely abstract ‘overheads’ from gross revenue before “Net Revenue” is defined and the royalty calculation begins. Such a broad definition of allowable deductions results in a mathematical erosion of the royalty base, such that after subtraction, there is virtually nothing left to distribute. Moreover, publishing contracts often attempt to deduct ‘all other applicable third-party costs’ without any financial cap or objective verification.
From a legal and commercial perspective, it is essential that the source of revenue be defined as broadly as possible. This means explicit inclusion of in-game purchases, microtransactions, Downloadable Content (DLCs), bundle sales, subscription services (such as Xbox Game Pass) and licensing rights for linear adaptations or merchandising. On the other hand, deductions should be strictly, limited and exhaustively restricted to actually incurred, irrefutably verifiable (out-of-pocket) expenses to independent third parties that are directly and undeniably attributable to the specific game.
| Financial parameter | Pro-publisher definition (significant risk) | Pro-developer definition (protective) |
| Income base (Gross) | Limited to revenue from direct retail and digital sales of the base game on specific platforms. | All revenue, direct or indirect, from any form of exploitation (including DLC, bundles, subscriptions, esports, and merchandising). |
| Marketing costs | Unlimited deductible as iterative deductions over the life cycle. | Strictly subject to a pre-agreed budget (cap) or ideally completely excluded from “Net Revenue” deductions (for publisher's own account). |
| Overhead & Administration | Flat rate (e.g. 10%) structurally retained for publisher's internal office expenses. | Strictly and explicitly excluded. Only ‘out-of-pocket’ expenses paid to independent third parties with invoice proof are deductible. |
| Currency fluctuations | Loss from conversion charged in full to net pot without hedging obligation. | Limited to actual bank conversion fees at time of transfer to developer. |
The focus of the deal: The recoupment mechanism
Besides the battle over the definition of Net Revenue, the recoupment mechanism is by far the most decisive factor in the cash flow and survival of the game studio. Recoupment is the financial process by which the publisher recoups its initial capital investment-the development advances paid (to pay the team during construction) and any agreed-upon marketing advances- entirely from the game's sales revenue, before royalties are paid to the independent developer at all.
This mechanism is predominantly designed in the industry as a “100% recoupment” model. In such a setup, the publisher retains the first generated net receipts in their entirety (100%) until the invested sum is mathematically neutralized, only after which the regular, contractual revenue split (e.g., 50/50 or 70/30 in favor of the studio) takes effect. Developers sometimes try to mitigate this through a “soft recoup,” where the developer receives a small percentage (e.g., 10-15%) from day one to cover server costs or bug fixing, while the publisher uses 85-90% for recoupment.
A pitfall for inexperienced developers is the construction where the contract dictates that the publisher does not recoup its investment from total net receipts, but only from the developer's share (royalty fraction).
The economic reality of this subtle distinction is huge. In such an aggressive scenario: if a publisher invests €500,000 as an advance, at an agreed 50/50 royalty split after recoupment. If the investment is to be recouped from the developer's share, the game must first generate as much as €1,000,000 in net receipts before the developer sees its first euro of actual royalties appear in the bank account. Indeed, while the studio waits, in that model the publisher is already collecting €500,000 in pure profit on its own 50% share from day one, in addition to the €500,000 covering its initial investment. It is therefore of extreme commercial importance to make it contractually sharp that recoupment is calculated and fed over the total Net Revenue pool, and never exclusively from the studio's royalty fraction. In addition, it must be prevented that ongoing, after-launch marketing investments by the publisher lead to a ‘rolling recoupment,’ sending the developer into an endless spiral without ever receiving payouts.
The impact of Belgian B2B law on unilateral publishing contracts
Whereas commercial B2B (Business-to-Business) agreements in Anglo-Saxon jurisdictions and historically also in Belgium were dominated by the absolute primacy of the will autonomy-the idea that professional entities are themselves responsible for the consequences of their signatures-the introduction of the updated Belgian B2B law has brought about a shift.
Integrated into Book VI of the Code of Economic Law (Articles VI.91/1 et seq.), this legislation provides a shield against abusive terms between companies. The legislature's express purpose is to curb contractual excesses imposed by economically substantially stronger parties, a dynamic that is extremely prevalent in the relationship between a start-up, capital-hungry indie studio and a billion-dollar publisher.
The absolute prohibition of a manifest imbalance
The conceptual core of this legal system is the open standard (also called the marginal review): any contractual term that, alone or in imperative connection with other terms, creates a “manifest imbalance” between the rights and obligations of the contracting parties is unlawful by operation of law and therefore void (enshrined in Article VI.91/3 CEL).
The legislature emphasizes that this nullity penalty is relative. This legal detail means that the nullity serves solely to protect the economically weaker or injured party (in this case, the independent game studio) and can therefore only be invoked by this party before the enterprise court. It is not a crime to include such a clause (barring bad faith), but it simply risks being nullified. Important is the rescue clause: if the court nullifies a flagrantly illegal clause, the rest of the publisher's contract remains unaffected and binding on both parties, insofar as the contract can meaningfully continue to exist without the targeted, deleted clause.
The black and gray list applied to publishing practice
To make the open standard manageable in practice, the Code of Economic Law employs two specific lists. On the one hand, there is the black list of core clauses that are by definition and irrefutably void in all circumstances (Article VI.91/4 CEL). These include clauses designed to bind the developer irrevocably without the right to reasonable notice, or provisions that give the publisher the exorbitant right to unilaterally change the essential features of the agreement (such as the genre or platform to be developed) without any objectively valid reason.
Much more frequent and dangerous in international publishing agreements are those clauses that fall under the gray list (Article VI.91/5 CEL). This includes a series of clauses that are legally presumed to be illegal, although this presumption is theoretically rebuttable if the party invoking it (the publisher) can show that the clause is indeed economically justified in the specific context of the deal. In the context of game development, this immediately tests against the following classic clauses:
- Unilateral interpretation clauses and underwriting clauses: Clauses in which the publisher reserves the absolutely exclusive and unassailable right to unilaterally judge whether a delivered “milestone” (such as an Alpha build or a Gold Master) meets abstract quality standards, without reference to objective, technically measurable criteria. Such unilateral performance dependence is highly distrusted by B2B law and is a direct target for invalidation.
- Disproportionate exoneration clauses: Terms that exclude the publisher's liability even for its gross contractual errors or fraudulent intent, or that unreasonably limit the developer's economic recovery rights in the event of a gross breach of contract by the publisher.
- Unreasonable and disproportionate transfers of rights: Extremely broadly and vaguely worded clauses that dictate that, without any kind of additional or proportional compensation, truly every form of current and future intellectual property right (including as yet unimagined technologies) automatically and globally passes to the publisher, completely regardless of whether the video game is ever actually released or marketed.
The stringent Belgian legal practice thus forces global publishers to substantially balance and adjust their unilateral standard contracts to meet the requirements of proportionality. Informed developers can also proactively and strategically use these prescriptive regulations during the negotiation phase to successfully weaken disproportionate requirements in advance, with the powerful argument that the proposed clauses under Belgian law will immediately perish in court anyway.
Copyright qualification of video games and software under Belgian law
A publishing agreement, stripped of all commercial terminology, is at its legal core a complex licensing or transfer agreement of intellectual property rights. Determining, securing and transferring who owns the source code, the visual assets (art, models), the narrative, the music and the registered trademark is fundamental to the entire capital appreciation of a game studio. Video games fall under Belgian intellectual property law, where they do not constitute a unified work, but are a complex audiovisual and technological composition of various protected elements.
The specific and different regime for computer programs (Book XI CEL)
Software, specifically the game engine, scripts and underlying code of the game, is protected in Belgium pursuant to the meticulous implementation of the European Software Directive, which is integrated into Book XI, Title 6 of the Code of Economic Law (Articles XI.294 et seq.).
This protection applies to the expression of the software (both the source code and the compiled object code), as well as the preparatory design material (such as flowcharts, architectural diagrams and specific interfaces), on the absolute condition that the whole is original and thus constitutes the author's own intellectual creation. It is essential to realize that ideas, principles, abstract algorithms or game mechanics as such are never protected by copyright; one only protects their original expression. Computer programs in the EU are also generally excluded from patentability (“patents”) unless the program produces a technical effect beyond the normal physical interaction between software and hardware.
This specific and tightly defined software regime differs in several respects from general copyright on works of literature and art (Title 5 of Book XI WER). A fundamental, game-changing difference lies in the regulation of the employment relationship. Whereas general copyright law (e.g., for text writers) mandatorily requires that an explicit, written and detailed clause be included in the employment contract for the valid transfer of property rights, Article XI.296 CEL introduces an exceptional statutory presumption in favor of the employer.
Unless otherwise expressly agreed by contract or statute, the employer (the game studio or company) is automatically deemed by law to be the assignee of all property rights in computer programs created by employees or officers in the normal course of their business duties. However, game studios must be extremely attentive and vigilant when working with external parties or independent freelancers; here this protective automatism does not apply at all and an explicit, detailed and written transfer (assignment of rights) is inevitable in order not to break the chain of title towards the publisher. An imperfect IP chain invariably leads to the stalling of due diligence by the publisher.
Exclusion from general protective provisions and statutory operating obligations
In the complex relationship between the independent studio and the powerful publisher, one must also consider Article XI.295/1 of the Code of Economic Law. This article stipulates that various mandatory and protective provisions of general copyright law explicitly do not apply to the creators of computer programs. This includes the exclusion of articles XI.167/1 to XI.167/6, as a result of which the general statutory guarantee of an “appropriate and proportionate remuneration” upon licensing, as well as the administratively burdensome transparency obligation (the obligation to report annually on the exhaustive exploitation of the work), cannot be enforced compulsorily via copyright for the pure software components of the game.
Nonetheless, Belgian law, assessed and tested against the strict “fair trade practices” and the overarching duty of exploitation, obliges the person who acquires exclusive rights (the publisher) to actually exploit this work in accordance with fair trade practices in the industry (Article XI.167 CEL). Thus, a publisher cannot, in theory, accumulate worldwide, exclusive rights to a promising competitive game for the mere malafide purpose of putting it in the freezer (‘shelving’ or ‘killing the game’) and thus eliminating market competition for its own in-house title. Failure to adequately exploit or distribute the finished game may result in termination of the license agreement, provided these parameters (such as release deadlines) are delineated in the long-form contract.
In addition to pure economic rights (the right to reproduce, edit and distribute), the individual author or programmer retains his moral rights, unwavering in accordance with Article 6bis of the famous Berne Convention (Art. XI.297 CEL). These include the fundamental right to paternity (proper attribution of name in the credits) and the right to integrity (opposition to the arbitrary deformation, mutilation or reputational modification of the software work). A global, all-encompassing waiver of the future exercise of these moral rights, a clause that is standard in American work-for-hire contracts, is manifestly void in Belgium and produces no legal effect.
A concern for game companies also involves co-authorship and undivided rights, which is frequent in multidisciplinary projects. The recent and directional Chabrol-ruling of the European Court of Justice (C-182/24) clarifies that although Article XI.168 of the CEL binds the exercise of undivided copyright to joint consent, formal national procedural rules should not prevent the exercise of these rights (such as a claim for damages for infringement by third parties) when all co-authors or heirs cannot be found. For a game developed by founders who later leave the company with an argument without documenting their shares in the game IP illustrates the importance of watertight IP transfer in the early stages.
The turbulent context of the Belgian copyright tax regime
One element massively affecting contractual relationships and game studio profitability in Belgium is the tax treatment of copyright. Historically, software developers enjoyed an extremely favorable tax regime for income derived from the transfer or licensing of their copyrights, where such income was valued (up to a certain cap) not as heavily taxed professional income, but as movable income at a reduced rate of 15%.
This landscape was drastically disrupted by the Program Act of Dec. 26, 2022, which structurally narrowed the scope of the tax favor regime as of Jan. 1, 2023, and restrictively linked it to Title 5 of Book XI CEL (the classic work of literature or art), suddenly and decisively excluding income from pure software development (covered by Title 6 of Book XI CEL, Article XI.294). This heavy fiscal drain on the IT and gaming sector was challenged by IT companies for discrimination, but the Constitutional Court, in its May 16, 2024 ruling (Case C-575/23), rejected the nullification appeals, ruling that the exclusion of computer programs was reasonably justified given the legislature's original purpose of protecting artists with irregular income.
However, the political and legal reality remains volatile: recent political agreements and draft laws in view of 2025/2026 aim to bring software back under the favored regime, under strict conditions and definitions, in order to safeguard the international competitiveness of the Belgian technology sector. For drafting long-term long-form publisher contracts, this requires that the structuring of payments (splitting payment for performance versus payment for the IP license) be formulated flexibly and adaptively so as not to contractually block future tax optimization.
Control mechanisms: the absolute indispensability of the audit clause
The financial reports (royalty statements) that international publishers provide periodically-often quarterly-to the developer are the basis for royalty payments. In practice, these detailed reports are invariably compiled unilaterally by the publisher's accounting department, and the underlying raw data on claimed costs, deductions, platform deviations and gross sales refunds are by definition not publicly available. To hedge against intentional or accidental miscalculations in the long-form, the incorporation of an audit clause is indispensable for any professional studio.
Operation and strategic importance of audit
The audit clause provides the developer with the contractual right, often for practical considerations limited to once per calendar year and within business hours, to have a certified and independent accountant (a Certified Public Accountant or a Belgian company auditor) inspect the publisher's financial books, records, invoices and underlying contracts.
This clause is actually the only effective, compelling lever to accurately verify the sincerity of “Net Revenue” deductions, as analyzed earlier in this post regarding marketing and QA costs. Indeed, blindly relying on mere visual dashboard statistics via distribution platforms such as Steamworks or the Epic Games Store only demonstrates to the studio the pure volume sales figures and gross platform revenue generated. However, these dashboards totally fail to reflect off-platform deals, currency conversions, and especially the complexly applied internal deductions by the publisher that can so dramatically erode the final royalty base.
Cost shifting (reimbursement) when discrepancies are detected
Audits by specialized financial professionals are particularly costly, time-consuming and intensive procedures. The standard principle is that the party initiating the audit (in this case, the inquiring developer) bears the full initial cost of doing so. However, in order to be economically feasible and act as an efficient warning mechanism, it is imperative that the publishing agreement include a mandatory cost-shifting mechanism (reimbursement clause or penalty clause) for cases where substantial financial errors are revealed.
The prevailing equitable industry standard in the video game industry dictates that if the independent audit reveals an underpayment to the detriment of the developer of a margin of error of more than five percent (5%), or exceeds an absolute threshold amount (e.g., a shortfall of $10.000, whichever amount is greater), the issuer is required not only to immediately remit the outstanding and withheld difference including agreed-upon default interest, but also to assume the full, reasonable out-of-pocket costs of the audit organization itself. This asymmetric clause acts primarily as an invisible preventive deterrent against sloppy, ‘creative’ or outright misleading financial reporting by publishers. Developers should also ensure that the statute of limitations to audit is not contractually shortened to an unreasonable period (e.g., only 6 months after reporting), but spans at least 2 to 3 years after the report is submitted.
Termination, default and the strategic reversion of intellectual property rights (Reversion Rights)
The ultimate and final stress test for the robustness of the long-form agreement occurs when parties fail to perform, the project stagnates, or parties wish to terminate the cooperation. Both under contract law (Book 5 Civil Code) and from the specialized perspective of IP protection, the Belgian legal context has very specific and impactful mechanisms regarding the resolution of agreements.
Dissolution and unilateral ‘step-in’ rights under new contract law
Under the traditional principles of contract law, a material breach of contract by a publisher (for example, failure to deploy agreed marketing budgets on time, refusal of QA support, or exceeding payment deadlines) results in the creditor's ability to seek judicial termination of the contract through the courts, or to demand forced performance, possibly coupled with a penalty payment. However, this judicial path is deadly slow for a game studio just before a launch.
Book 5 of the Civil Code therefore introduces, through the article 5.85 CC, a powerful, quick alternative: the unilateral, extrajudicial substitution of the debtor, often compared to contractual ‘step-in rights. If contractually not otherwise detailed and excluded, a creditor (the developer) may, in cases of urgency or other exceptional circumstances, and only after a proper and reasoned prior notice of default, decide, at its own risk, to unilaterally replace the defaulting party and have the agreed commitment performed by a third party at the failing publisher's expense. Although this legal option is heavily at one's own risk-if the court subsequently finds that there was no urgency, the developer itself commits breach of contract-it offers a potential toolbox for studios that, crucially just before an irreversible launch window, contend with a completely unresponsive publisher, provided they strictly adhere to the formal requirements of notice. However, given the explosive risk profile of these regulations, professional parties typically steer toward specific, nuanced and contractually delineated step-in or out-of-court long-form rescission clauses.
Reversion of rights and the deadly danger of IP transmission
One disastrous clause for developers that they may encounter in a publisher's draft long-form agreement is the infamous “transfer on breach” clause. Such one-sided clauses stipulate that if the developer fails to achieve a technical milestone in a timely manner, fails to fix bugs, or violates any other material term of the agreement, absolute ownership of the source code, assets, intellectual property and name of the game immediately and irrevocably automatically transfer to the publisher.
The oft-heard argument that the publisher is doing this solely so that, as a financier, it can “finish the game with another internal team,” ignores the reality that this poses a risk to the survival of the entire studio. Such a draconian clause should be immediately eliminated or, at the very least, heavily mitigated by generous, realistic recovery periods (cure periods) and limiting the transfer to merely a non-exclusive license to complete the specific, defined project, without loss of the basic IP.
On the other spectrum of this discussion is the incorporation of a ‘reversion of rights’ clause. This clause provides that if the long-term agreement is unilaterally terminated due to a material, irreparable breach of contract on the part of the publisher, or if the publisher goes into liquidation or bankruptcy, all exclusive licensing rights, distribution rights and IP rights temporarily granted or entrusted to the publisher as part of the collaboration will immediately and automatically revert in their entirety to the original developer. This essential safety net ensures that the studio and its most valuable asset are not irrevocably trapped for years in a legal impasse or bankruptcy estate, with the successful game no longer able or allowed to be updated by anyone or distributed by a legally unreachable entity. Moreover, to accompany the formal end of a regular contract or upon discontinuance, professional practice commonly provides for a run-off period (sell-off period) of, say, three to six months, during which the publisher may phase out remaining physical store inventory and can and should transfer digital management accounts (such as Steamworks admin rights) to the developer without obstruction and neatly, without further copyright infringement of the creator's intellectual property.
Frequently asked questions (FAQ)
Is a short-form agreement stamped “non-binding” legally completely non-binding?
Not at all. Under the rules of the Belgian Civil Code (specifically Book 5, Contracts), all pre-contractual negotiations must invariably be done in good faith. If the short-form already contains overwhelming consensus of will on the essential elements of the contract, or if its signing has created in you as the developer the objective “legitimate expectation” that the final deal would come through without any doubt, the publisher's abrupt breaking off of negotiations can lead to significant claims for damages. This liability (culpa in contrahendo) may then cover not only the preliminary development costs incurred, but also include compensation for integrally lost profits from the non-concluded contract.
How does Belgium's B2B law protect developers from strangling contracts from powerful publishers?
The legislation on B2B contracts (codified in Book VI of the Code of Economic Law) expressly prohibits all contractual provisions that create a “manifest imbalance” between professional parties. This mechanism ensures that extreme unilateral publisher stipulations-such as the publisher's exclusive and indisputable right to determine whether a milestone has technically been reached without measurable criteria, the lawless termination of the contract without any notice period, or the disproportionate exclusion of all financial liability of the publisher even in the case of grave contractual errors-can be qualified by a court as unlawful and therefore void, regardless of the fact that the game studio has already signed the contract in a position of economic dependency.
What happens to intellectual property (IP) rights if the publisher unilaterally terminates the agreement or goes bankrupt?
This lapse depends exclusively on the agreed-upon ‘reversion of rights’ clause in the long-form. In a balanced and properly drafted contract, all license rights, code and names of the game immediately and automatically revert to the developer in the event of default, bankruptcy or refusal to operate by the publisher. Without such a sharp, explicit written provision, the developer risks an impasse in which the game is held hostage for years in a bankruptcy estate, given that intellectual property rights to software in Belgium are strictly and anomalously regulated through Book XI of the CEL.
Conclusion
The transition from a seemingly innocuous short-form to a final, all-encompassing long-form publisher agreement is by far the most delicate and crucial legal journey in the cycle of game development. What starts out as commercial and euphoric harmony on a few pages over a rough revenue split quickly transforms into a legal maze at the subsequent stage. In practice, it is the complex, invisible concepts such as the formal entire agreement clause, asymmetrical recoupment structures calculated on developer income, undefined deductible expenses and ‘transfer on breach’ clauses that dictate the future financial survival of an independent studio.
In Belgium, the mandatory provisions in Book 5 Civil Code on pre-contractual liability, the protections against strangulation clauses under B2B law (Book VI CEL) and the tight copyright regulation in Book XI CEL offer perceptive and well-prepared developers weapons to ward off extreme contractual force majeure and restore vital commercial balances. However, these legal shields in reality at no time replace the absolute necessity to methodically plug every legal concept, fiscal anomaly and mathematical revenue mechanism from the exchange of the very first term sheet to the final signature.
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