This fascinating article on Gamasutra goes through the publicly available development contract between Activision and Spark for a 3 title deal that includes Call of Duty: Finest Hour. Three entertainment attorneys go through the document giving play by play commentary. It's excellent insight to how these contracts work and how exposed a developer can be. The publisher is going to want to be as vague as possible. It's up to the developer to decide how comfortable they are with those terms and ask for specifics. Giving up ownership rights of internal tools and technology for 3 years of development is crazy. As is agreeing to doing unspecified amounts of work for demo builds of the game. As a matter of fact, the new little gig I started is for making a demo of the Basketball game. The publisher just asked me to do it- almost like a favor. When I asked which milestone in the contract this work falls under, it was my friendly way of telling them I won't do it for free. No problem with that, it just had to be specified.

The problem is, as a developer, you've got a big wad of cash sitting in front of you that somebody wants to give you to make games. In this case, 3 games! So the temptation is to not look a gift horse in the mouth and be very agreeable. But it's not a gift. If anything, the gift is you dedicating your experience, skilled labor, and talent to this company. They want to make as much profit as possible (see: The Man) off of your effort and will gladly take every drop of sweat and tears you want to give them.

Finally, the last thing to note is that contracts are not a guarantee of anything. You can be as specific and detailed as you want- it isn't a security blanket. I don't know the actual details of how it really went down, but I think Spark messed up with they fired up the litigation machine, because that's when Activision filed counter-suit and all the bells and whistles in the contract started making all kinds of noise.