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Examining the Contract Key Elements
by: J. Stilwell-Cheek
Now we will get to the meat of the contract issue with a discussion of some basic
elements which they contain, as well as, considering what points to include
when developing your own.
Due to the length of this summary, the Front of the contract will be discussed
on this page. There will be a link at the end of this discussion which will
lead you to the remaining information. Thank you.
Since this sample contract is being used here as a guide by way of educating
those of you who are interested in learning more about contracts, we ask that you
respect the ownership of this document and not copy it for business use.
The two pages of a contract that we are about to discuss were taken from reference
samples found in the "Graphic Artists Guild Pricing and Ethical Guidelines -
9th Edition Handbook". An Edition of the handbook from this Guild is a must
have for any graphic artist's reference bookshelf. So much great information
and helpful guidelines! Their web site may be found
HERE.
The link to the Front Page will open in a new window. The "Front Page" button to the left,
will do the same thing. You may want to leave it open while we discuss its various components.
Some of the information you will read here is fairly standard. The information contained
in the [ brackets ] is just FYI and should not be included in your own contract.
OK. We will now take a look at a sample of the
Front Page
of the contract.
Taking items numbered 1 - 16 on the Front Page:
- #1 - Print stock for Contract:
- You should always have your contracts printed on your Letterhead. Complete
with all of your Contact Information.
- #2 - Fundamental Information:
- This is routine information noting any Purchase Order number, in
addition to your Project or Job number, or, whatever you choose to call it... Also,
who the work is being Commissioned By. This may often be an art director, or,
other staff member in charge of design within a company. The name of the Company
should be noted in the #1Client ID slot.
- #3 - Description of Project:
- There tends to be several places, in this particular contract, to
enter descriptive information for the project. Perhaps one can never be too thorough#2.
- #4 - Description of Use:
- Other Description of the product pertaining to its use. Apparently, we
would list magazine, catalogue and other periodical information here.
- #5 - Definition/Type of Assignment/Nature of Market:
- Definition and Type of Assignment seem to duplicate efforts to describe
the project. [On an individual basis, you may or may not need to include
each of these components in your own contracts.]
For example: If you are writing a contract for a run of
5,000 corporate greeting cards; four color, full bleed, using the company's logo,
two or three appropriate graphics, complementary background, furnished copy inside
with staff photo, on 100 LB cover, spot varnish, scored with imprinted envelopes; there
are not too many ways of stating this fact.
Unless the input sought here is something describing the type of media such as;
animation, broadcast video or audio, promotional, corporate ID, or, book jacket.
However, that information would have already been stated in either #3 or #4 with
still other areas to input the same in #6, #9 and #10.
The Nature of the Market may be an asset from a statistical point of view.
And knowing information about the market and target audience would serve to keep the
artist on track with the project's intentions and goals. [Again - just use what you need
and disregard the rest.]
- #6 - Additional Uses:
- It is vital that the artist know exactly where and how her art is to be used.
Not only will this assist in pricing the work, she must attempt, as well as possible, to
keep record of where her copyrighted work is and what it is doing.
Scenario: A contract has been authorized for a signage project at a storefront business location and the
business owner decides to have it made into a billboard and placed at several
key points along the main highways leading in to the city, this must be known!
This alternate use will affect project price as well as any rights which may have been
sold or transferred.
This should be where you would also choose to put any limitations on the use
of your images/work as a reminder. Ex: First-run rights only, 5,000 prints.
- #7 - Copy:
- Self-explanatory, to a point. Not many artists would proceed with completing
a project where the syntax of the copy seemed incorrect, or, typographical errors
existed.
Many graphic artists are copywriters, as well, and could not, in good conscience,
allow copy containing errors to be processed. This being an obvious time where
your business ethics would come into play, how much of an inconvenience would it
be for you to pick up the telephone and inquire of the client regarding the suspected error?
How would you feel in this situation - if you were the client? How would this
reflect in your opinion of the company, with which, you are conducting this business?
As the designer/artist hired to do this project, such deliberate oversight
would speak volumes to others about YOUR company!
- #8 - Rights Transferred:
- Indicate here, what rights your client is purchasing, if any. Be as specific as possible
in describing the limitations to the use of your work. If there are additional uses
involved (see #6) then it must be spelled out here exactly what rights are necessary
for those uses.
This would include; multiple printing, ownership of designs - they are
purchasing your copyright to any given image or design, reformat of design - extraction
of an image from one document type to be used in another. Rights to alteration, etc.
It is not always about what your contract DOES state, but, what your contract FAILS to
state that can get us into a bind regarding the use of our work, and which rights
have and have not been purchased by the client.
Scenario: A client engages you to design the images for, and layout of, a two-sided
6-panel full color advertising brochure for his small commercial janitorial service.
An uncomplicated project - right? You do the work, the client approves it and you
send it to the printer. The snag - the client wants one copy only. He thinks he will save
a lot of money on printing by just running an original through a copier!
The point is that it will cost him a substantial amount of money to purchase
reproduction rights to all of the images involved in his project. He may even be required to
purchase the copyright, which is quite costly. Those charges, coupled with any on-going
royalty fees and re-use rights will cost so much more than he could ever hope to save
by copying the brochure himself. [Don't scoff at this - a small business may
try many things to save money on advertising and self-promotion!]
There can be much confusion over "Rights". Is it "first run" rights? Reuse for a specific
amount of time? Rights for a specific number of copies? Limited to a particular form
of presentation?
Most Rights of the "timed" variety should include guidelines for a Royalty
Fee as well. [Usually 3 to 12%] Royalty Fees reimburse you for each time a copy of
your work is used. This type of situation is often restricted to businesses which
purchase rights to your work and then intend to resell it for a profit.
Such as with greeting card companies and others who specialize in paper
goods; napkins, gift wrap, paper plates and cups, as well as those who deal in novelties;
drinking mugs, mouse pads, calendars, etc. These companies are aware of this
facet of the enterprise and will, most of the time, bring the issue to your
attention. Be very prepared, however, and know what to look for and be
ready to bring the issue up if the client fails to do so.
Royalty Fees vary such that it is impossible to state a standard rate. Combine that
point with the fact that it is illegal to discuss anything concrete regarding pricing in
any Public Area which may be misconstrued as Price Fixing#3, and so
there is not much we can advise on this subject. Only you can
determine what is fair and feels right to you for your work.
When selling to a greeting card company, or, other business that will
use your work to resell, they are, as a rule, extremely up front with what
they are willing to pay in Royalties.
- #9 - Type of Use:
- One would think that this would have been mentioned previous to this point.
But, in case it has not, what the images and/or product will be used for should
be inserted here.
- #10 - Medium of Use:
- Again, this appears a bit redundant as there has probably been some mention
of whether the finished product will be video, periodical, an advertising brochure, or,
retail catalogue.
If there is more than one medium to be used, for example; as
a promotional brochure, as well as, displayed on the company's web site. You would
be certain to mention both here.
- #11 - Distribution/Geographical Area:
- ...Bulk mail-out to persons in the southeast, hand-out at in-house event,
display at front desk, on-site download world-wide?
- #12 - Time/Number of Printings:
- This appears to be related to the Additional Uses and Rights Transferred
categories, yet, its focus is on number of uses.
How would one charge for a 15 second commercial, which featured three static
images and one title graphic and an animated background, is scheduled to be shown 4 times in a 24
hour period for each weekday, 6 times in 24 hours on Saturdays, none on Sundays,
8 times each 24 hours on national holidays with a running date of July 1,
through September 15? OUCH! That hurts just thinking
about working this one out! (anyone with the correct answer? I would LOVE to
hear from you!)
- #13 - System Application:
- This would apply to programmers and developers who author gaming
applications and other graphics-based programs and add-ons. Would not seem to
be applicable to graphic artists across the board.
- #14 - Production Schedule:
- Many clients, who are advancing a substantial amount of money, want to
have a peek at the progress of their project from time to time. Understandably.
A returning client, on the other hand, may have full confidence in your judgement
and abilities, due to his business ventures with you in the past, and will require fewer, if any,
additional meetings. Or, the meetings may be conducted via a fax or online.
This would be your schedule for showing them the initial phases of the project -
an agreement can and should be reached at the time of signing as to what stage they prefer to
see the work in progress.
The first showing, no doubt, would be shortly after all of the research, rough
images and tentative layout are done. You really would not want to get too close to the project's
finishing stages without at least one additional meeting with your client.
A review of all of the material, along with final layout and design
plans, as well as, the images (agreed upon at the first showing) to be used should
be finished. This is kind of 'The Point of No Return' for any amendments that the
client may request without them being too costly to make.
The Review is probably two thirds of the way into the project (however, it
can be earlier, or, later if both sides are comfortable with the schedule). You should,
of course, have all permissions and releases signed and in hand at this time, also.
If your presentation of the finished product meets with the client's expectations
for the project - this is very good.
The Final Acceptance should go smoothly providing both sides have communicated
openly and as often as needed. (Do not feel like a failure if you need to contact
your client in between scheduled meetings!) None of us have that mind-reading thing down pat just yet!
Having a question does not translate into your incompetence as an artist. If anything, it
reflects a genuine caring for client satisfaction and a great deal of pride in your work.
Remember to be humble about your work, in a dignified kind of way.
Sometimes, with a project that has proven to be an extra special 'challenge',
or, one that has truly strained our resources or abilities as an artist, we are
just so damn pleased with ourselves for a job well done, and still having hair
on our head, that it is tough to remain humble! But, alas! We must.
- #15 - Purchase Price:
- You and your client spoke about this prior to signing the contract. Any
amendments he has chosen since that time, that would make a significant change in the purchase price,
(10% or more) were approved before you proceeded to make them. You spoke to him, also
in the beginning of the project, regarding any outside expenses which would be his responsibility.
(models, data mining - if necessary, purchased audio, video or stills) There are
NO surprises! You have the project in ahead of schedule and it looks great!
(which makes YOU look great, too!) Life is sweet.
- #16 - Payment Schedule:
- Traditionally, payment is due at the time the product is released to the client.
Or, no later than 30 days past that time. Depending upon the circumstances,
however, these rules can be bent.
It may be a favored client who patronizes your business often; it may be
that you are on retainer by some huge corporation. (this certainly sounds grand!)
It may be that the project is extremely expensive and the client would like
payments on a monthly basis. It could be that your client's accounts payable
department only cuts checks on a specific schedule. Whatever the situation,
how it is agreed that you are to receive payment for your work goes here.
Hopefully, you have found some helpful information on this page, or, at least
a better understanding of the various elements of a contract.
We are now ready to move on to the
Back page of the contract and discuss
the information there.
Footnotes:
1. ESP uses the client's name as the Client ID. If the name is too lengthy, we choose the most descriptive part and use that.
2. It is a grand idea to have a description written by the client. Photocopy it, and
attach this to the main copy of the Contract to be filed away with your business papers.
3. "Price Fixing", as cited at Legal DataBase.Com, refers
to the act of "Two or more competitors who agree to fix the price they will charge." This
activity falls under the auspices of the DOJ's Anti-trust laws and can get pretty ugly.
[Ask Bill Gates or ATT]
This information is in no way meant to be taken as legal advice, nor,
as a substitute for the expertise of your legal counsel. Although simple
and sufficient contracts may easily be written by the artist,
in the case of documents that require in-depth stipulations, or,
where there are investors involved, it is always best to consult with your
attorney or legal department.
For information regarding reprints of this article, or, to obtain the
author's permission to publish it elsewhere, please contact the author by e-mailing
ESP Concepts. Or, by sending
your request via the
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Any corporate names and the logos described in this article are the
Registered Trademarks and property of their respective owners.
1. This reference is quoted from the 9th Edition of the Graphic Artists Guild
Pricing and Ethical Guidelines.
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Examining the Key elements of the Contract - continued.