A Video Game Development Agreement is a legally binding paperwork which contains an agreement between the game developer and a game publisher and many other persons associated. It is very significant as it spells out the roles, obligations and the expectations therein, offers protection on their intellectual properties and most importantly avoids conflicts by covering some of the important areas such as advance, payment terms, milestones and issues regarding secrecy.

The vital elements consist of a statement of works, schedules, compensation, ownership of works created, non-disclosure agreement and exit conditions. These segments serve the purpose of creating order, protecting interests and providing a mechanism of conflict resolution – in this case, including mediation or arbitration, if necessary.

It offers transparency about what has to be done and compensation and safeguards one's creativity to the developers. As for the publishers, it assures the completion of the good on the due date and protects their funds. There are less risks, more responsibility, and better cooperation for both sides.

The contract outlines the ownership of the assets of the game development process including but not limited to software, character’s design, soundscapes, and even mark representations. It is important to consider whether the developer has ownership rights or whether all content developed is for the exclusivity of the publisher. Well defined IP clauses ensure that there are no confusions and legal wrangles after the game is out in the public.

Most Video Game Development Agreements include termination conditions and dispute resolution mechanisms. If a breach occurs, the agreement may specify remedies such as mediation or arbitration. These provisions help resolve conflicts efficiently without resorting to costly court litigation.