The Check is in the Mail

Posted on Posted in Past Events

It’s a common tale. An artist agrees to perform or produce work. The artist fulfills her side of the bargain, but the party responsible for providing payment delays or refuses to pay altogether. The artist is then left in a difficult situation. On November 19th, Jeff Nelson and Claire Molesworth, attorneys with Graham & Dunn, conducted a workshop for artists on How to Get Paid. They discussed the fundamentals of contracts and some strategies for artists to use when trying to collect payment on those contracts.

Contract Fundamentals

Once upon a time, Claire decided to plan a holiday party for her close friends and knew just who should provide the entertainment. She wrote a quick email to her friend Jeff asking him to sing at her party. “Hi Jeff, I am throwing a holiday party and would like to offer you $200 to come and sing for my guests. Would you be interested?” Jeff quickly responded, “Hi Claire, I would love to sing at your holiday party and $200 sounds like fair payment!” Claire promptly replied, “Sounds great! I can’t wait to hear you sing!”

This simple exchange of emails has created a contract. Contracts don’t have to be complicated—their true purpose is to memorialize what the parties have agreed to do for one another. With a few exceptions, most contracts don’t require magic language, Latin phrases, or legalese. Keep it simple. Clearly explain what each party is agreeing to do and what compensation will be upon performance. The focus should be on clarity, not length, so there are no misunderstandings.

  •  Oral Contracts

Suppose Claire had walked over to Jeff’s office to ask him about singing at her holiday party instead of emailing. They could have discussed what she wanted and what he would provide and how much she would pay him. While oral contracts can be legally binding, there are far more opportunities for things to go wrong, and they are difficult to prove and enforce. If an oral contract is created it is always best to follow up the conversation with a written agreement or at least an email conversation so all the important terms are in writing.

  • Form Contracts

What if Jeff does this work regularly? Maybe he does a killer version of Little Drummer Boy and is in high demand for holiday parties! If so, then Jeff might already have a contract he likes to use when booking events. Consistent contracts are easier to manage so using the same document template for similar agreements can help ensure that all the terms are included.

Contract Terms

Some important terms that artists’ services contracts should contain:

  • Copyright License v. Assignment

When you sell a piece of artwork, determine if you are giving the buyer a license to use your work in a particular way or if you are assigning all your rights in the work to the buyer.  A buyer might want a license to use your artwork on promotional materials for her business, and the agreement could specify which uses are acceptable, for example the use includes flyers and posters but not t-shirts. If the buyer uses the artwork for a purpose you haven’t agreed to then you might sue them for infringement (and breach of contract). On the other hand, if you assign your copyright in the artwork to the buyer this means the buyer can use the artwork however and whenever she wants and you no longer have control over what happens with the work. Both assignments and licenses have significant benefits and drawbacks so consult with a copyright attorney before licensing or assigning your work to someone else so you fully understand what rights you are giving away and what rights you are retaining.

  • Payment

Every contract should contain provisions that address when payment is due and how payment will be made. If payment isn’t received according to the contract it’s helpful to include a provision that reserves your right to stop performing or not deliver the art until payment is received. Retain any licenses or assignments of copyright in the artwork until you are paid in full or paid fairly.

If the deal changes after the agreement is documented then amend the written agreement with a written amendment.

Know Who Your Friends and Enemies are…

If you are negotiating a contract with an unfamiliar buyer or someone known to be a difficult buyer it is wise to require a more detailed contract. Carefully review all the provisions and use good business judgment before agreeing to the deal. If the agreement is with a known business partner then less detail might be required. Remember that almost all contract disputes settle so draft the contract to put you in the best position to negotiate a fair remedy.

If you keep these fundamentals in mind, things will never go wrong…until they do!

 Contract Disputes

Claire’s holiday party was an amazing success!! Jeff showed up on time and sang a collection of holiday hits that had the crowd belting out their favorite tunes with joy and good cheer. At the end of the party Jeff packed up his elf hat and headed home. A week goes by and Jeff realizes he never received the $200 payment from Claire.

When a promised payment is missing or delayed, it is very important to take time to clearly think through the situation and evaluate all the options. A hurried and accusing email to a long time buyer might cause irreparable damage to both a business and personal relationship. If a breach of contract occurs it is important to respond appropriately, not react hastily. In any situation the key is clear communication.

  • Friendly Inquiry

The first option is to send a friendly inquiry regarding status of payment. Maybe the other person forgot about the payment or ran out of funds and needs to delay payment. A kind reminder might be all that is needed to ensure payment is made.

  • Neutral Third Party

If one party is disappointed with the outcome of the deal, it might be necessary to get a second opinion from an uninterested third party. Both sides will have different versions of what happened so getting a second opinion can help resolve the problem in a fair and equitable manner.

  • Demand Letter

If the attempt at a friendly resolution doesn’t work, the next option is to send the other party a demand letter. Demand letters also need not use fancy language or be written by a lawyer. The letter should outline your understanding of the agreement, how the other person breached the agreement, what you are specifically asking for because of the breach, a deadline for the other person to comply, and what you plan to do if the other party doesn’t comply with your request.

  • Stay Organized

When engaged in a contract dispute it is vital that you stay organized and keep a paper trail of all the agreements and correspondence. Take notes at in-person meetings including the date and location and confirm any verbal agreements or discussions with an email after the exchange.

  • Small Claims Court

If friendly requests and a demand letter still don’t resolve the dispute, another useful option can be small claims court. There are no lawyers allowed in this court, but you can consult with a lawyer before filing and while proceeding with resolving a dispute in this forum. The maximum claim allowed is $5,000 and the process requires filing a small claims notice, serving the claim on the defendant, waiting for the court to schedule a trial date (usually within 40-90 days), and appearing in court to present your evidence to the judge. The more reasonable and objective you can be, the better your chance of getting the dispute resolved. King County also has a mediation department that can sit down with both parties and work out an equitable solution.

The more you can set yourself up for success during contract formation, the better position you will be in to handle a dispute should one arise. Consulting with a contract or copyright attorney before signing any agreement is also highly recommended as an attorney can help draft the agreement to protect your interests.

This post represents the views of the author(s) identified above and does not necessarily reflect the views of Washington Lawyers for the Arts (“WLA”). WLA provides this content as a public resource of general information. WLA does not warrant that the content is or will be complete and accurate. It is not intended by WLA, nor should it be considered by you, to be a source of legal advice. You should not rely upon the information provided. Rather, you should seek legal counsel for consultation and advice.