"A verbal contract isn't worth the paper it's written on." - Samuel Goldwyn
Even though this quote is both misattributed and didn't actually happen, I love it because it speaks a simple truth about contracts. Namely, if you don't have one in writing, you don't have one.
When I first moved to LA after graduating from RISD, I picked up some freelance work from an indie producer who was trying to get some low-budget TV projects off the ground. He liked my moxie and we got along well, so he hired me as a camera-operator for a demo he was producing. He offered me $100 per day for three days work in a transaction that was conducted orally. I wanted the offer in writing, but I was so desperate for work that I didn't want to negotiate myself out of the job by asking for it.
Yes, I was stupid for not getting it in writing and when he stiffed me on half the payment, we both knew that even though a verbal contract is legally enforceable, I couldn't prove that he owed me another $150. There are thousands of young artists - and a whole lot of experienced ones - in the same boat who don't put anything in writing because they don't know that they should, can't be bothered, or think that drafting a contract is too expensive and/or time-consuming. Now I certainly can't do anything about laziness or apathy, but I can tell you why contracts are important and how you can draft your own.
As a lawyer, I like everything in writing because paper equals proof; that is to say, having something in writing is proof that a conversation took place, or that an agreement occurred. That's all a contract is after all: evidence that an agreement took place so that if you end up in a legal battle, you can prove your side of the story. Otherwise you end up in a "he said/he said" situation and courts generally don't look favorably on those. So for the love of God, if you're hired to make a work of art, or you sell a piece of art, memorialize it somewhere somehow. "But Greg" you might say, "don't contracts have to be drafted by lawyers?" Well my friends, here's the dirty little secret behind contracts - NOPE!
At the risk of negotiating myself out of potential clients (I do that a lot, don't I?), a contract is no more enforceable in court just because it was written by a lawyer. Obviously there are certain benefits to having a contract drafted by someone with a legal education - namely a lawyer can think of all sorts of ways to protect you in writing than you couldn't dream of - but if you're like most artists out there, then you don't have a lot of discretionary cash lying around to make this happen. So instead, I'm going to give you some tips to help you make your own while maximizing your self-protection.
- For a contract/agreement/bill of sale to be valid, it must state all the material terms. Specifically, you need to mention the parties involved in the transaction, the quantity of items sold or the type of service rendered, and price. You should also put anything else you think is important. If you don't wish to have a return policy, make sure to state that all sales are final.
- If you're shipping a work to a buyer, write down which party is liable if the art is destroyed or damaged during shipment. This is called Risk of Loss and can bite you in the ass if it's not discussed ahead of time.
- Make sure to mention who owns the copyright upon completion of the work. If it's a work-for-hire situation, you could end up losing it without even realizing it.
- Use plain English. Most people think a contract needs a lot of "heretofore's" and "wherein's" and "thusly's" but they just make it harder to read. Instead, draft a contract like you would draft a professional email to a colleague.
- Email chains are acceptable in lieu of a paper agreement as long as the material terms are there and understood by all parties.
- For bills of sale, they can be sent after the sale, although they still need the material terms.
- You can use a template version so you don't have to draft a new one from scratch for each transaction.
- Keep two copies of each final agreement, one physical paper copy and one scanned copy on your hard drive.
- A contract isn't valid if both parties don't agree to all the terms. Before you start working, make sure the other party is on board because you could end up doing a lot of work without getting paid.
- Finished contracts should be signed and dated by both parties and each party should have a copy of the signed and dated final.
- Stand your ground on the terms you can't live without and be flexible on everything else. If our Congress has taught us anything, it's that drawing a hard line in the sand on every issue results in no one getting anything they want. Be flexible and willing to negotiate.
- Finally, don't be afraid to ask for a written version of your verbal agreement. Too many people don't do this because they think it's disrespectful or indicates mistrust. This is not true. If anything, you'll look more professional for it.
The truth about contracts is that if you know what you want and are willing to put a little time and effort into getting it down on paper, they're not nearly as intimidating as they seem at first. That said, if you truly don't know what you're doing (I leave it to you to know when that is), or you're just not comfortable drafting an agreement, please please please hire a lawyer to do it for you.
If you're trying to make a living as an artist, then you don't need things to be more difficult... the deck is already stacked heavily against you. Having a written agreement for each of your sales/hires/commissions/whatevers may create a bit more work up front for you, but I promise you that the one time you need it and you have it, it will save your ass. And then it will be worth it.