
Hack4Detroit's indemnification clause - nanch
https://backupfreak.com/2015/06/13/hack4detroit-hackathon-contract-bait-and-switch/
======
beambot
I've been in these situations a few times. I have a few different approaches
depending on the person and company asking:

(1) Say, "My employer prohibits me from signing any legal documents related to
intellectual creations. You'll have to run it past their legal team. It'll
take 1-2 weeks." That's mostly true(!) depending on the provisions of your
employment agreement, and it's usually enough to get them to back down.

(2) Go to the signature page and write in legible penmanship: "I do not agree
to these terms" (and that is all). Often the administering party has no leeway
and just needs to be able to say, "I saw them write something."

If all else fails: You have to be willing to walk away. And if you do decide
to sign: Retain a copy!

Anyway, that's pretty shady and should not be tolerated.

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jonasrosland
Transfer of IP is not reasonable, as you should still own what you have
created.

Granting a perpetual and royalty-free license is very common as can be seen in
the Apache Individual Contributor License Agreement:
[https://www.apache.org/licenses/icla.txt](https://www.apache.org/licenses/icla.txt)

The Apache ICLA states that you still own the copyright of the software and
can do what you want with it, they only license it from you and can then use
it for the purposes stated in the agreement. It does require you to mention
all the patents that you might infringe on, but only if you are aware of them.
Otherwise you're pretty much in the clear.

I wouldn't have signed the document mentioned in the article, I think you made
the right move.

~~~
nanch
Ah, that's very interesting, and much simpler! That seems better for both
parties. I'll update the post to reflect this.

Thanks for your affirmation, I was feeling like a dummy being the only one
that decided not to sign.

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bthornbury
You had to pay $20 and then you find the tranfer of IP to the city reasonable?
I understand these things aren't cheap to run, but there's no shortage of
sponsors looking to get involved for various reasons.

Paying to make software for someone else seems entirely unreasonable and in
bad taste in the organizers part.

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jsprogrammer
The contract was bad. It was very bad that they never revealed it until you
got there. It was really bad that a Party tried to persuade you into signing
the document knowing you don't understand it (and they probably don't either).

Under these circumstances, it would be appropriate to submit an invoice for a
refund of the registration fee (which I assume was pre-paid), reimbursement
for your travel costs, and time paid for the amount wasted on reading their
contract.

~~~
dunkelheit
I don't think bickering over registration fee would be a reasonable thing to
do. It just promotes the overall litigious atmosphere. The next thing we will
see in such contracts is something like 'under no circumstances are
participant's costs associated with event refundable, including but not
limited to registration fees, travel costs, bla bla bla.' Or maybe it is
already there. Much better make the whole thing public like the OP did.

~~~
rgbrenner
I disagree. The way I see it, they stole $20 by crafting a completely one-
sided contract designed to prevent reasonable people from participating in the
event, and then foisted it upon participants at the last minute.

~~~
dunkelheit
Surely that was bad behavior on their part. The question is how to prevent
this type of behavior in the future? I think the OP achieved more to this end
by making bad behavior public than by mitigating his personal damage. Maybe it
is false dichotomy but maybe not (the reason for these contracts is organizing
entity trying to cover its ass).

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philip1209
Something like this happened in St. Louis. The community protested, and they
ended up canceling the hackathon.

Details here: [https://www.philipithomas.com/stl-hackathon-canceled-
after-s...](https://www.philipithomas.com/stl-hackathon-canceled-after-social-
media-backlash/)

~~~
x5n1
... as it should be...

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databound
Wow, this is out of control... so I make an app at the hackathon... the city
of Detroit gets full rights then someone uses the app and dies or gets hurt
and they sue the original programmer meanwhile, the city owns it and uses it
100%.

This is out of control!

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natch
"You are probably thinking about it too hard." That CIO who said that should
be fired.

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rgbrenner
IANAL.. would this contract be enforceable? Because it seems the event org
gets:

$20, exclusive IP ownership, indemnification, etc

and the participant gets:

to do work (and one person gets $5k, and two people get gift cards)

Where's the quid pro quo? Seems like there's no consideration for one side.

Edit: the contract says that providing a place to work (which will be done at
their direction, supervision, and for their sole benefit) and the 3 prizes are
the only things they'll provide. Is that enough for this to be considered a
fair/enforceable contract?

~~~
bradleyland
That was the first thing I thought. Turning over IP _and_ offering
indemnification... for what exactly?

That indemnification clause is utterly ridiculous in this context. Our company
works with a lot of governments, and indemnification clauses of this type are
extremely common any time there is software involved. What's crazy about this
circumstance is that the participants aren't contractors writing code for the
city... Or are they? Based on the indemnification requirement, it seems that's
how the city views it.

It appears un-enforcable to me (IANAL, but I do deal with this shit a lot).
However, just because a contract can't be enforced doesn't mean it won't cause
you trouble. I'd walk before I signed a contract like this at a hackathon. No
"chance" at a prize is worth this kind of exposure.

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krick
This is outrageous. I wouldn't be happy to sign anything, no matter how
harmless _after_ I agreed to participate (which means I already arrived to the
place, not mentioning the fee), but OK, it's just me. But 8 page contract with
liabilities? "You are probably thinking about it too hard."? At this point I
would basically explode, so I can only applaud your calmness and restraint.

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lisper
"...all IP is transferred to ownership of the City of Detroit (which I think
is reasonable) and the City is granted a perpetual, royalty-free license to
“use” any derivative software (which I think is unreasonable)"

I'm pretty sure the author reversed "reasonable" and "unreasonable" from what
he intended.

Also, IANAL, but I'm also pretty sure this contract would not be enforceable
because of the way it was presented. There would be a very strong argument
that the participants were coerced into signing.

~~~
nanch
Actually, how I wrote it was how I intended it, but originally I didn't have
an issue with the IP transfer, I was more concerned with liability.

As you and others have mentioned, it does make more sense to maintain IP
ownership and grant a license to the City of Detroit. That'd be a hackathon I
want to be in. :)

~~~
lisper
> I didn't have an issue with the IP transfer

That surprises me. IP transfer means you would no longer be able to use your
own code without their permission. That would be a show-stopper for me.

~~~
krick
> That surprises me. IP transfer means…

I guess this really highlights the problem with the whole bureaucracy in
general, and that contract in particular. You know what "IP transfer" means.
OP doesn't. And, I'm convinced, he doesn't have to. He is not a lawyer, he
knows other things, that lawyers do no know. Cheers to you for knowing both
lisp and law, but I really cannot judge OP for the fact he knows only lisp. I
believe it's not him, who is guilty, but the system, where every harmless
lisper can be forced into signing contract he doesn't understand because of
the fact he wanted to do something good for the society (and paid 20 bucks for
that, by the way).

~~~
lisper
> and paid 20 bucks for that, by the way

That's another reason this contract would probably be invalid: no
consideration.

[http://www.nolo.com/legal-encyclopedia/consideration-
every-c...](http://www.nolo.com/legal-encyclopedia/consideration-every-
contract-needs-33361.html)

~~~
krick
Yes, I suspect so, and it is pointed out in the comments several times already
anyway. But this is another thing that some harmless lisper might not know, so
he will discover it at some point that is much closer to the court, after
spending quite a generous amount of money on the lawyer to defend him. And,
considering how fucked up legal system is, it is not completely unlikely that
he will actually need this defend, because Detroit's lawyers will be trying to
prove that there actually was something in that contract for the OP, and it is
"consideration enough".

And even if nothing bad will actually happen — which might be true in this
case, but not in general — you can say that moral damage is already received.
And nobody will ever pay him for that, because, guess what, he is a harmless
lisper and not somebody, who tries to sue everybody he sees for the moral
damage.

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sergiotapia
Granted I've only participated in 3 hackathons but the times I went I just
walked in and found a cool thing to work on. I didn't have to sign anything or
pay a cent.

Is this sort of legalese normal in the US for hackathons?

~~~
vinay427
At university hackathons I have been to there's usually a short waiver
covering liability and sometimes ownership. Nothing very extensive compared to
many legal contracts these days, but I would say that given the rather
litigious culture in the US these sorts of papers are justified. The one
mentioned in this article definitely sounds more troubling, however.

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hydrogen18
I once was working freelance deals. I talked to a guy and the project he had
sounded reasonable. As it, he wasn't claiming we were going to build a
Facebook competitor. He had a good business opportunity with a solid
opportunity for revenue. A 30 minute Skype and I agreed to start work at a
certain rate.

He sent me a contract that stated I had to provide unlimited warranty on any
software I wrote for 3 years after the date of the last payment. I kindly told
him I was no longer interested. He told that was his 'standard contract' and
had 'never looked at it anyways'. Six months later I was still getting emails
from him about once a week asking me when I'd be able to begin work.

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stretchwithme
You had to pay a fee? To create things for free?

~~~
minimaxir
Hackathons are not free to run at any significant scale. (especially when
prizes are involved)

Usually, the costs are covered by sponsors, and I can't find any indication
that there were sponsors for this event.

EDIT: Comment is incorrect; there were sponsors, see child comment.

~~~
vnchr
The event was sponsored. Local folks and some national brands like Comcast and
5-hour energy. Winner gets a $5k prize.

Here is the event detail.
[http://www.automationalley.com/Events/Calendar/Event-
Detail....](http://www.automationalley.com/Events/Calendar/Event-
Detail.aspx?uniqueid=16840)

~~~
vnchr
And the organizers have deleted the event details here (10pm EST)

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brudgers
Onerous contracts have long been common in the startup industry. My impression
is that one of the things that has made YC successful is striving for a
reputation for providing better terms for founders, but out in the wild places
where reputation doesn't count and funding is turned from competitive to a
competition where investment is the prize, it's amateur hour. $5000 isn't
going to provide much runway for a startup, and funding just one team isn't
going to make for a valuable portfolio. The contract is just a reflection of a
failure to distinguish between barbershops and startups.

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Animats
Of course you shouldn't sign. Walking out was the right thing to do.

I've always been very, very careful about reading contracts, and it's worked
out quite well for me. There are online services I will not sign up for
because the terms overreach.

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vnchr
Detroit CIO Beth Niblock has publicly acknowledged the issue with plans to do
it differently in the future.

[http://imgur.com/FwLSilU](http://imgur.com/FwLSilU)

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ncv
I participated in Automation Alley's #HackDPL last year (which was free) and
in the last hour of the event, they sent out an email saying all submissions
required a copy of the app's source code. Our team submitted ours since I was
the only member of my team opposed to it, but it was a scummy move. Since this
hackathon had a cover charge, I decided not to go. This doesn't surprise me
and I hope Automation Alley gets it together.

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jostmey
And that is why the city of Detroit is going down the drain.

