Red Flags in Contracts

Time Investment: 75-90 minutes of multimedia learning and analysis

Learning Objectives

By the end of this activity, you will be able to:

Identify problematic clauses commonly found in translation and localization contracts
Recognize when contract terms are unreasonable or potentially exploitative
Understand the power dynamics that lead to unfair contract practices
Develop strategies for protecting your professional interests when reviewing agreements

What Are “Herod Clauses”?

The term “Herod clause” refers to contract language that seems harmless but actually requires signers to give up something valuable—named after the biblical King Herod who ordered harmful actions against children.

Listen: The Wi-Fi Firstborn Incident

Listen to this segment from “A Way with Words” radio show: Herod Clause

A security firm in London set up a free Wi-Fi hotspot with terms and conditions that included language stating users agreed to “sign away their first born child for the duration of eternity.” This was a stunt to demonstrate how people don’t read terms and conditions—but some people actually agreed to these terms!

Discussion Questions:

How often do you read terms and conditions before clicking “I agree”?
What does this story reveal about our relationship with legal documents in daily life?
How might this same principle apply to professional contracts?

Real Contract Horror Stories

Watch: Red Flags in Localization Contracts

Watch this presentation about real problematic clauses encountered in the translation industry: Red Flags in Localization Contracts

Key Examples from the Video

The Multiple Choice Question: If you had signed the Loc101 NDA from our previous activity, what rights would you have accidentally given up?

A. Freedom to work at another employer in the localization field B. Ability to speak an idea aloud during an interview without your potential employer claiming rights to it
C. Freedom from monetary damages for your work as an intern D. Right to be paid for work performed E. Full, royalty-free, perpetual, irrevocable, worldwide, non-exclusive, and fully sublicensable right and license to use, reproduce, display, distribute, adapt, modify, create derivative works of, and otherwise commercially or non-commercially exploit in any way, any and all intellectual property

Answer: E - The intellectual property clause was the “Herod clause” hidden in the NDA.

Real-World Contract Problems

1. Non-Compete Agreements

Can prevent you from working in your field after leaving an employer
May be legally unenforceable but can still create stress and uncertainty
Often broader than necessary to protect legitimate business interests

2. Interview IP Assignment

Some tech companies require signing agreements before interviews
Any idea you mention during the interview becomes company property
Creates unfair power dynamic in the hiring process

3. Unlimited Liability for Interns

Student interns held responsible for “any and all debts, claims, demands, liabilities”
Exposes students to financial risk far beyond their role or control
Often added by lawyers without considering reasonableness

4. Unpaid Additional Work Requirements

Purchase orders requiring “free in-context reviews” beyond paid translation work
Terms buried in fine print, discovered only after work begins
Can destroy professional relationships when translators discover hidden obligations

5. Moral Rights Elimination

Translators routinely stripped of rights to be credited as creators of their work
Translation treated as mere copying rather than creative, professional work
Contradicts UN classification of translation as specialized professional activity

The “Spaghetti at the Wall” Strategy

Contract lawyers often include as many restrictive clauses as possible, knowing most people won’t challenge them. They rely on:

Severability Clauses: “If one part of this contract is found invalid, the rest still applies”

Allows lawyers to include legally questionable terms
Protects the overall contract even if some clauses are unenforceable
Encourages overreaching in contract language

Length and Complexity: Making contracts so long and dense that people won’t read them

2,600+ word “NDAs” that are actually comprehensive service agreements
Important terms buried in dense legal language
Multiple documents that must be read together to understand full obligations

Industry Perspective: The Patenttranslator’s Analysis

Read: Professional Translator’s Response

Required Reading: How the So-Called Translation Industry Turned “Confidentiality Agreements” into Declarations of Acceptance of Servitude

Key Points from the Article and Comments

Evolution of Translation Contracts

Traditional NDAs were 200-300 words, focused on actual confidentiality
Modern “NDAs” can be 2,600+ words with extensive additional obligations
Legitimate confidentiality protection has evolved into comprehensive control mechanisms

Power Dynamics in the Industry

Large agencies can easily replace translators who refuse unfair terms
Independent translators face “take it or leave it” contract terms
Economic pressure forces acceptance of increasingly unreasonable conditions

Professional Impact

Translators treated as “obedient servants” rather than skilled professionals
Creative and professional aspects of translation work not recognized in contracts
Industry-wide race to the bottom in professional standards

Common Red Flags to Watch For

🚩 Intellectual Property Overreach

What to look for: Broad assignments of rights to all your work, ideas, or creations
Red flag language: “perpetual,” “irrevocable,” “all intellectual property,” “derivative works”
Why it matters: You could lose rights to work you create, even unrelated to the specific project

🚩 Unlimited Liability

What to look for: Making you responsible for damages far beyond your control or role
Red flag language: “any and all damages,” “unlimited liability,” “reasonable attorney’s fees”
Why it matters: You could face financial responsibility for problems you didn’t cause

🚩 Unpaid Work Requirements

What to look for: Obligations for additional work disguised as part of the original scope
Red flag language: “as needed,” “unlimited revisions,” “additional services as required”
Why it matters: You could end up working for free on time-consuming tasks

🚩 Overly Broad Non-Compete Clauses

What to look for: Restrictions on working in your field that go beyond protecting legitimate business interests
Red flag language: Long time periods, broad geographic areas, vague industry definitions
Why it matters: Could prevent you from using your skills and education to earn a living

🚩 Invasive Monitoring Rights

What to look for: Rights to audit your workspace, access your computer, or monitor your activities
Red flag language: “from time to time,” “ensure compliance,” “workplace audits including home offices”
Why it matters: Violates reasonable expectations of privacy and professional autonomy

🚩 Mandatory Compliance with Impossible Standards

What to look for: Requirements that are technically impossible or unreasonably expensive to fulfill
Red flag language: “delete all electronic files,” “remove all traces,” specific software requirements at your expense
Why it matters: Sets you up for contract violations through no fault of your own

Professional Responses to Unfair Contracts

Successful Negotiation Examples

Research Legal Standards: One professional faced a non-compete clause and researched Wisconsin employment law, finding that overly broad restrictions are unenforceable. Sharing the relevant statute with the employer resolved the issue.
Request Clarification: When faced with unlimited liability clauses, asking employers to explain the risk they’re asking you to assume often leads to contract modifications.
Seek Professional Advice: For complex contracts or significant career decisions, consulting with a lawyer specializing in employment or contract law can provide valuable protection.

Analysis Activity

Post your analysis to the Contracts discussion forum

Most Shocking Example: Which contract problem from the video or article surprised you most? Why?
Personal Risk Assessment: Looking at the red flags list, which issues would you be most concerned about encountering in your future career?
Negotiation Strategy: How would you approach a situation where you were asked to sign a contract with problematic clauses but really needed the work?
Industry Perspective: Based on these examples, what changes do you think the translation industry needs to make regarding contract practices?
Professional Development: What steps can you take now to prepare for evaluating and negotiating contracts in your career?

Protection Strategies

Before Signing Any Contract

Essential Questions

What exactly am I agreeing to do and not do?
What rights am I granting to the other party?
What happens if something goes wrong?
How long do my obligations last?
What are the consequences if I need to terminate the agreement?

Research Steps

Look up unfamiliar legal terms
Check if similar clauses have been challenged in your jurisdiction
Consider whether the terms are reciprocal (do both parties have similar obligations?)
Ask trusted colleagues about their experiences with similar agreements

Red Flag Responses

Request clarification for unclear or overly broad language
Propose modifications to unreasonable terms
Seek legal advice for contracts involving significant risk or long-term commitments
Consider whether the opportunity is worth the risk of unfair terms

Key Vocabulary

Contract Analysis Terms

Term	Meaning
Herod Clause	A contract provision that seems minor but requires giving up something significant
Severability	Legal principle that invalid contract parts don’t void the entire agreement
Moral Rights	Author’s rights to be credited and to control how their work is used
Indemnification	Agreement to compensate another party for losses or damages
Work for Hire	Legal doctrine where the employer owns the copyright to work created by employees or contractors

Power Dynamic Terms

Term	Meaning
Take It or Leave It Contract	Agreement offered without possibility of negotiation
Economic Duress	Pressure to agree to unfair terms due to financial necessity
Information Asymmetry	When one party has significantly more legal or industry knowledge

Reflection Questions

How do these contract examples change your understanding of professional relationships in the translation industry?
What role does economic necessity play in translators’ willingness to accept unfair contract terms?
How might new professionals balance the need for experience and income with protecting their long-term interests?
What responsibility do established professionals have to push back against industry-wide problematic practices?
How do cultural differences in business practices affect international translation contracts?

📥 Download this Content

Find this file on our repo and download it.

🤖 GAI Study Prompts

Copy the downloaded content and try it with these prompts:

“Based on these contract examples, what are the most important clauses for new translation professionals to negotiate?”
“How can I build leverage to avoid accepting unfair contract terms early in my career?”
“What are ethical alternatives to problematic industry practices in translation contracts?”
“Create a checklist for evaluating translation and localization contracts before signing”

Next Activity: Understanding Typical Contracts