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Relations between individuals and business entities are governed by law; what's not specified in the law, can be specified by a mutually-executed contract. Generally, one party provides the actual text of such contract, which, depending on circumstances, could potentially be modified by the other party prior to execution (especially when dealing B2B or between somewhat equal entities).

Realistically, in most circumstances, a multipage document is not legally required in order to execute most agreements like rent or services. However, the perception exists that the legalese must be signed. Vast majority of contracts don't explicitly specify the © copyright for the text of the contract itself.

From a copyright perspective, you can't really just take some work and republish it, even if the work in question may be missing the © copyright symbol, as it may still be copyrighted. However:

  • What's the situation with reusing the text of the contracts you've been a party to? Would that by default be prohibited by whoever the copyright owner of the contract may be? And how would you even find out the owner, or if there is one? Is copyright even at stake here, as neither the general public nor the copyright owner would possibly be aware of this copying and derivative work taking place?

  • Does it at all invalidate the agreement itself if the party that supplied the contract doesn't actually own the copyright to it? After all, if you're not legally allowed to have a copy of the text that specifies the terms of the contract, how would it be possible to adhere to such terms?

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Multipage contracts, like any multipage texts, will likely bear some level of originality and so they will have a copyright owner. Absent a license allowing you to reuse the text, you will not be allowed to do so.

The fact that you were a party to a contract represented by the text does not change your position: your contract does not have anything to do with the copyright of its text, therefore you still need to honor the copyright as if you were not a party to the contract.

It is not uncommon that the copyright will be owned by the lawyer who drafted the text. Your business partner who supplied it would have employed/contracted one. Or, the lawyer could have provided the text to your business partner together with the copyright (less common).

Why wouldn't fair-use be at play here? Don't you already get the permission to copy and modify the contract from the original party when they send it to you? (Is such right only limited to original execution?)

The original party, whether it is the copyright owner or just a license holder, can send the text to you for possible copy and modification in the course of executing the contract with that party only. The copy that you receive is provided solely with the express purpose to make you an offer (so that you know the terms of the contract) and give opportunity to suggest modifications i.e. make a counter-offer.

To reuse the text with another party you need a permission/license from the copyright owner. Fair-use won't play here because you'd be using the text for the purpose it was created for—executing contracts—as opposed to, say, writing a research paper on language/phrases used in legal documents.

Does it at all invalidate the agreement itself if the party that supplied the contract doesn't actually own the copyright to it? After all, if you're not legally allowed to have a copy of the text that specifies the terms of the contract, how would it be possible to adhere to such terms?

Most contracts do not even need to be in writing. The text will be just one of the evidences if your contract, not the contract itself. No matter whether you obtained the text legally or not, it still does its job as evidence. Whilst you may well be sued for the copyright infringement, in no way will it affect the validity of your contract, which will still hinge on those well-known 6 elements having nothing to do with the copyright of the text.

  • You've answered the second part of the question, but I'm still unconvinced about the first part without further references. Why wouldn't fair-use be at play here? Don't you already get the permission to copy and modify the contract from the original party when they send it to you? (Is such right only limited to original execution?) Basically, in this answer, by analogy, you're kinda claiming that I can't sell an original CD that I've already listened to, because copyright, but that's not actually the case with the CDs, so, not sure it applies here to contracts, either. – cnst Dec 16 '18 at 6:00
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    @cnst Added a couple of paragraphs. CD analogy isn't good here because a CD is a physical product that can't be sold multiple times. Contract texts are digital downloads (like commercial mp3s) and come without the right to resell. – Greendrake Dec 16 '18 at 7:02
  • I get it, but it's not really being re-sold here, either. Couldn't one view it more like the software or music that could be used several times? (Also from a practical standpoint, you don't even know who wrote it, and they won't even know you're using it, so, whilst it obviously doesn't give you the right to copy as-is, I still think it's also a bit difficult to understand why you don't necessarily have a licence to do so, either.) Also, I think our original assumption that the contract is actually copyrighted might not necessarily be correct in the first place? – cnst Dec 16 '18 at 7:47
  • @cnst I am certain the copyright will legally/technically exist, though the owner will often not even think of it that way, let alone enforce it. But it well may do: search "contract templates" and you will see they are actually being sold. You indeed can use commercial templates several times for yourself like music, but only if you're explicitly allowed by the copyright owner. But not if you are the other party to the contract which the owner did not give license to. – Greendrake Dec 16 '18 at 8:54
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Note that model contracts or templates for contracts are often sold. Once this was often done in book or pamphlet form -- now it is more likely to be in the form of downloadable digital text, or software packages that assemble the text for a legal document from pre-written sections or fragments, depending on inputs, often the answers to a questionnaire. This helps make it clear that the text of a contract is copyrighted and has a value, but that that value is usually far less than the sums that might be involved in the contract itself. A model contract will often sell for less than $100.

To reuse contract language without the permission of the author (who will often be the copyright holder) is, at least technically, copyright infringement unless one of the exceptions or defenses apply, such as lack of originality or fair use. That said, it is very often done and rarely is anyone sued for it, at least in part because the value of contract text as such is usually too small to justify a suit, particularly if it is copied for a single use, rather than being resold as a new model.

Moreover, many contracts are modifications, often minor modifications, of previous contracts which are in turn modifications of yet earlier ones, and the truly original content may be old enough to be in the public domain, and would be very hard to trace. The value of the original content of the latest modification might be hard to establish.

However, let us consider the fair-use issues, assuming a US jurisdiction. (Never forget that fair-use is a strictly US legal concept.) It is worth reviewing this question and answer from Law SE Consider the four factors for fair use, as listed in 17 USC 107, in the context of the text of a contract:

  • The purpose and character of the use Writing a contract is generally a commercial action, not an educational one, which would weigh against fair use. Reusing contract language is in no way transformative, which also weighs against fair use. (Contract language remains intended for use as a contract. To copy language for comment in a book analyzing contract law might be trasformative. Analyzing it in a paper about linguistics would surely be transformative.)

  • the nature of the copyrighted work. The text of a contract does not tend to be creative in the way a work of fiction is, but not as uncreative as a purely factual textbook is. This factor does not seem to weigh strongly in either direction

  • the amount and substantiality of the portion used in relation to the copyrighted work as a whole. Most often the whole of a contract text will be used, or failing that a very substantial part of it. This factor would weigh against fair use.

  • the effect of the use upon the potential market for or value of the copyrighted work. If the model used is being marketed as a model, and if many people simply reused it without permission or payment, the effect on the market would be sizable. If the model is simply being used as a contract, and is not being marketed, nor is likely to be, there is really no market to effect. Still if there is any market value at all, copying without permission would significantly affect it. (Note that for this factor, one must judge not the effect of the individual use at issue, but the effect if many people in a similar position made a similar use of the copyrighted work.) This factor has a variable weight, but probably at least leans against fair use.

How a court would asses the overall effect of the four factors if there was a suit over the copyright of the text of a contract, is hard to say. I suspect it woudl not be judged to be fair use. But thew value of the text as text would be low, and contract texts are not usually registered with the Copyright office, unless they are being marketed by a publisher as a model text. Therefore statutory damages might well not be available. Moreover, contract text not being marketed often does not carry a copyright notice, so the defense of innocent infringement might be available to further mitigate damages. Overall I think such suits will continue to be rare, even thoguh the practicve of copying contract language is common.

The question also asks if copying the contract language (no doubt with modifications) would invalidate the new contract. The clear answer is No. The copyright issue is quite separate from the issues involved in the actual contract. Indeed it might well be the lawyer or advisor to one or both of the contracting parties who committe4d infringement, not any of the actual parties. In this regard I have really nothign to add to the previous answer by @Greendrake to this question.

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