IP Contract Essentials Every Creative Should Know
Creativity has value — but value only turns into income when it's backed by a clear agreement. This article draws on the African Regional Intellectual Property Organization's (ARIPO) Guidelines to Contracts, published to help creators across the region negotiate fair, well-documented deals instead of relying on casual, verbal understandings that are nearly impossible to enforce.
Whether you're licensing a design, selling a manuscript, scoring a film, or booking a client project, the same underlying principles apply. This is the foundation — later articles in this series go deeper into publishing/literary contracts and audiovisual/performer contracts specifically.
What You'll Learn
- Why a contract is a legal relationship, not just paperwork
- The clauses every IP contract should contain
- The difference between licensing and assigning your rights
- Exclusive vs. non-exclusive deals — and when each makes sense
- Who can legally sign on behalf of a company
- Where to get help if you can't afford a lawyer
Key Takeaways
A contract is an agreement where minds meet
ARIPO's guidelines define a contract simply: an agreement between two or more people where there is a genuine meeting of the minds (consensus ad idem). For it to be binding, it needs:
- An offer and clear intention to create a legal relationship
- Consideration — something of value exchanged. This is what separates a contract from a gift: a gift is where one party gives value and gets nothing in return, and gifts and contracts follow different legal rules
- Capacity to contract — both parties must be legally able to enter into the agreement
- A legal subject matter — you cannot contract to do something illegal
Verbal agreements can be legally binding, but they are nearly impossible to prove in a dispute. Always get it in writing, even for a "small" or informal job.
Why creators avoid contracts — and why that costs them
ARIPO's guidelines are blunt about this: many right holders do business in a casual, friendlier way rather than as a serious business relationship, because a contract feels like it costs money, takes time, and "locks them in" for a specific period. The result is that they lose out and only realise it after the fact — right holders in urban areas struggle with this, and the guidelines note it's worse for creators in rural areas with even less access to legal support.
A written contract flips this: it sets clear standards for both parties, reduces risk by minimising liabilities, and gives you something to point to if a dispute arises.
The clauses every contract should have
Whatever the type of creative work, ARIPO's guidelines list the basic clauses that should appear in any IP contract:
Don't be intimidated by the list. Not every clause needs to be a page long — a service booking on Sokobuni already covers payment, terms, and duration through the platform. What matters is that nothing important is left to assumption.
Licensing vs. assigning — know which one you're signing
This is the single most important distinction in any IP contract, and it's where creators lose the most value without realising it.
| Licensing | Assigning | |
|---|---|---|
| What happens | You grant permission to use your work under specific terms | You transfer ownership of the right itself |
| Who owns the IP afterwards | You still do | The other party now does |
| Can you reuse or resell it elsewhere? | Depends on the licence terms (exclusive vs. non-exclusive) | Generally no — you've given it up |
| Typical structure | Royalties, fees, or a defined term | Usually a one-off payment |
| Reversibility | Can expire, be limited to a territory or term | Permanent, unless the contract says otherwise |
"All-encompassing" contract language — such as granting rights across "all media forms currently in existence and hereinafter invented" — hands the other party a very wide scope of control. Read that kind of clause carefully before signing; it's often more than the deal actually requires.
Exclusive vs. non-exclusive licensing
When you license rather than assign, you then choose how exclusive the licence is:
- Exclusive licence — no one else, not even you in some structures, can exploit that right except the licensee. This usually commands a higher fee or royalty because you're giving up flexibility.
- Non-exclusive licence — the licensee can use the work, but so can others you license it to. This lets you earn from the same work multiple times, but each individual deal is usually worth less.
Which one makes sense depends on the market strength of your work and what you're trying to achieve — a single high-value client deal often calls for exclusivity; a template or preset you want to sell repeatedly should stay non-exclusive.
Who can actually sign
If you're contracting with a company rather than an individual, make sure the person signing is actually authorised to bind that company — not just any employee. ARIPO's guidelines flag this specifically: a contract signed by the wrong person within a legal entity risks being void from the beginning (void ab initio). If you're unsure, ask who the proper signatory is before you proceed.
When to get help
You don't have to navigate this alone:
- An agent can negotiate on your behalf and help maximise your income from a deal
- A Collective Management Organisation (CMO) — such as the Music Copyright Society of Kenya (MCSK) for musicians — can check agreements and collect royalties on your behalf
- A legal practitioner specialising in IP or entertainment contracts can review terms before you sign
ARIPO's guidelines are explicit that they are not a substitute for legal advice: comply with the laws of your own jurisdiction, and seek a properly drafted contract from a legal practitioner for anything with real value at stake.
Practical Steps for Sokobuni Sellers
- Before accepting a commission or collaboration, write down (even briefly) what's being granted: is it a licence or a full assignment of rights?
- State clearly in your product or service descriptions what licence a buyer receives — personal use, commercial use, resale rights, etc.
- For any custom or commissioned work, get a signed agreement before you start — specifying ownership of the final IP — not after
- Keep every signed agreement and be able to show who signed for the other party, especially for business clients
- If a deal feels too big to handle alone, use Sokobuni's service-booking terms as your baseline and add a simple written addendum for anything non-standard