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For Material Breach > For Material Breach - Pg. 201

The Publishing Contract 201 The cure period , the amount of time after receiving a breach letter that the publisher has to correct the breach, is very important to getting paid on time and should be as short as possible--15 days if you can negotiate it. If your publisher has 30 days to cure, it is quite possible that it will take 30 days to pay after receiving a breach letter from you. The publisher will want to continue receiving royalties for any games it published or entertainment/merchandise contracts that it originated. This is fair, but you will want all monies redirected to you f/b/o the publisher ("for the benefit of," which means that the money legally belongs to the publisher, even though it is delivered to you). If there is a lawsuit over damages caused by the publisher's breach, you will also want the right to hold onto any royalties you may owe the publisher to offset any damages the court may find that the publisher owes you. Publishers fear remedies in equity which are non-monetary remedies like temporary or permanent injunctions that prohibit the publisher from doing something (like releasing a game), or specific performance, in which a court compels a company to do something, and will want to limit your remedies to money damages. Developer's Material Breach You may want to define material breach, for clarity, as failure to get approval for a milestone, failure to deliver the gold master, your going out of business, or excessive delay in delivering the game. If you are in material breach before the game is completed, the publisher will have a period of time to decide whether to complete and publish the game or to abandon development (30 to 60 days). If the publisher elects to complete and publish and if the publisher owns the IP, it will want to ter- minate the contract with no further payment to you. You will want to receive a proportional royalty. The calculation for this is found by multiplying the original royalty rate by a fraction, the numerator of which is the number of milestones you completed and the denominator of which is the total number of milestones.