Requirements of a Contract

Consideration

• something of value must be offered by both parties otherwise it is a gift

Mutual Assent

• must agree on terms and the meanings of words

Offer and Acceptance

• must be clearly stated and communicated, we want to do this

Legal Purpose

• can’t make a contract to rob a bank

Capable Parties

• usually can’t make contracts with minors, bankrupts, prisoners, or adults without all mental faculties

Elements of a Contract

Introduction

• States general facts, has a lot of “WHEREAS…” clauses and paragraphs.
• Will likely change Your Name to “Artist” and Main Street Gallery to “Venue” or Super Awesome Production Studios to “Client”

Purpose of the Agreement

• Why is this contract being agreed to? Are you having a show? Releasing copyright? Commissioning a work of art? Is the show in Nevada or Ohio?

Responsibilities of both Parties

• What is each party obligated to do? When? What conditions change those obligations?

Representations and Warranties

• Artist usually represent that a work is theirs and original
• One might represent that the work is of sound construction, no wet paint dripping on the floor

Boilerplate Clauses

• Important to read and understand, cover many common elements of contracts and agreements

Signature Block

• You have to clearly sign and agree to the contract by signing somewhere

Attachments

• Often there are additional documents to reference in the contract and they are referred to as attachments or exhibits, and are included at the end.

Miscellaneous Provisions

• Payment Terms
• Timeline
• Revision or Design Schedule
• Termination Clauses
• Budget
• Progress Report Schedule
• Installation Terms
• Approval and Acceptance – so important to spell out
• Taxes
• Duration of the agreement – is it forever?
• Insurance
• Ownership rights – Copyright
• Reproduction Rights
• Artist rights – VARA
• Death or Incapacity
• Independent Contractor?
• Amendments to contract? How?

Payment Terms

• Do you get paid on signing the contract?
• When do you get paid? How much?
• Are there approvals necessary to get paid?
• Who approves the work? How? Verbal? Written? When?
• What if there is a disagreement?
• Who controls the budget?
• Are you reimbursed for expenditures or receive a lump payment?
• What happens in termination?

Timeline

• Outline when everything will happen.
• How long after a painting sells until you get paid?
• How long does a work sit in gallery until you can have it back?
• What happens if timelines slip?
• Consider writing timelines “3 weeks after completion of …” rather than using hard dates.
• When does the contract begin and end? How?

Revision or Design Schedule

• Related to the timeline.
• Must be clearly spelled out.
• How are designs approved?
• How many revisions? At what cost?
• Who decides?
• What happens when no one agrees?

Termination

• Client for cause
• Artist for cause
• Death or incapacity
• Force Majeure
• What happens to payment terms?
• What about disputes?

Term or Duration

• When does the contract start?
• When does it end?
• Some provisions may last longer than the agreement such as licenses, be sure to explicitly state duration of terms. In perpetuity can be helpful for licenses.

Ownership Rights

• Reproduction rights
• Who owns the copyright?
• Who can make images of the work?
• Do the rights expire?
• Are they exclusive?
• Is there a limit on types of media? T-shirts? Coffee cups?

Ownership

• You may not own the physical work but you may still own the copyright
• Maintenance agreement for commissioned pieces

If you do not write any of the words of a contract it is likely not written in your best interest.

Contract Changes

Remember Mutual Assent?

• Both parties have to agree. So if you do not agree, change the agreement until you can agree.
• This is a negotiation process. In some situations you will have little power to negotiate in others you will have much more.
• Remember to not only look for things to “remove” from a contract, look for missing things as well that you need to add.
• Don’t be afraid to ask.
• Do you really want to work with someone who is mad at you for asking about a contract? They may not agree to the proposed changes but you should always ask.

Examples of Additions and Clarifications

• Where is the electricity? How many amps? Whose power cords?
• How many volunteers? Art handlers?
• Who pays for shipping? In a bag or a crate? Insured?
• Is the gallery open daily? Or only once a month?
• Is the exhibition only of your work or a group show?
• How many works in the show?
• Who hangs the work?
• Who buys plane tickets? Do you get reimbursed later or get a ticket sent to you?
• Will equipment be rented? Who pays? How many days?
• What about insurance? Liability?
• Can they take photos of your work and sell them?
• How long can you use my images / video for publicity and paid advertising?

Boilerplate Provisions

Can seem like a lot but matter when needed. Make sure to read and understand all of them.

Boilerplate Clauses

Warranties

• Promises or assurances made by either party. Especially important in commission work.  You will warrantee that the painting or ceramic piece won’t fall apart.

Notice

• How will the parties contact each other? Registered mail? Email? What address? This is important for payment, termination and force majeure.

Relationships

• Not the romantic kind. Usually prevents parties from claiming a business relationship.  Allows for contract work and avoiding workers compensation and payroll taxes.

Indemnification

• A ”hold harmless” provision. It is a transfer of risk. It shifts potential costs from one party to another.
• Can be one way or two way. Always try to get a mutual indemnification.
• Protects the party from losses from third party claims. Copyright is a good example.
• You will also likely “warranty” that you own the copyright of your work but an indemnification clause add additional protection.

Choice of law

• What law will you use? Generally you will be in the same State but with out of State agreements this can begin to matter.

Jurisdiction

• Similar to above but decides where any lawsuits or other court actions must be filed.  If you have to file in California, it may cause additional expenses.

Force Majeure

• Floods, terrorism, tornadoes, hurricanes, sink holes, Covid-19 – what happens with these events – unlikely but should be in there. If it is a specific list of situation it may offer less protection then more broad and vague terms.

Assignment

• Allows or does not allow the parties to transfer rights in the contract to other people. Common in artist contracts, if you contract Anish Kapoor to decorate your living room, you don’t want Anish to “assign” that right to someone off the street.

Attachments

• Very common in artist contracts. Sometimes called “exhibits” but are just documents that are attached to the contract and become part of the agreement.  Often referred to in the text of the contract.

Integration

• States that the contract represents the total or the final agreement of the parties. If you have an email that says you get paid 1,000,000 but the contract says 100, guess what you are getting paid? (Note: there are special laws that govern written correspondence leading up to a contract.  Ask a lawyer.)

Headings

• States that headings in the document have no meaning

Severability

• Allows the contract to stand and be enforced if one part is invalid.  You contract with a gallery and it says artist responsible for robbing a bank.  The rest of the contract is still valid, including you getting paid, even if the invalid bank clause is taken out, if you have a severability clause.
• This is in the current news with the potential invalidation of the Affordable Care Act by the Supreme Court.

Do I need a lawyer?

Yes, you do.

• It may not be necessary as you sign some basic agreements in the beginning of your career but there is a threshold where it is a good idea to hire an attorney.
• Is your threshold $100? $1,000? $10,000? $100,000?
• In your career you will handle many similar contracts.  After you use an attorney on a certain type, you are likely able to handle that type of contract on your own in the future.
• It is a good idea to hire an attorney again if you need a new type of contract or if the stakes significantly increase.
• Remember, there are free resources available.