What Should Be In My Contract? A Contract And Why You Need One
What Should Be In My Contract? A Contract And Why You Need One
It’s not time to celebrate just yet.
Before you get to work on the project, there is some business to take care of. Don’t skip past this all-important step just because you or your clients are eager to get started on the fun part. Never ever start the project until you have successfully negotiated (and signed) the contract and have a deposit in hand.
You may worry that a contract will “scare off” your clients, maybe even that they will choose a different designer who doesn’t “make” them sign a contract. But if your prospects are bona fide professionals, signing a contract won’t be a problem. They will respect you all the more for having one. If they do resist, take it as one more red flag and beware.
Your business may feel like a very friendly enterprise and you may enjoy your clients, but don’t be mistaken. Anything can happen. People change their minds. Priorities get reconfigured, budgets are discontinued, companies are bought and sold. New bosses make unanticipated changes. Things are bound to go wrong, and you need to be protected.
What is a contract, and why do I need one?
A contract is a document that outlines the terms and conditions under which you will perform your work. It clearly states the responsibilities of both parties and what will happen should problems arise.
The most obvious reason for a contract is to protect yourself and your company. When you sell your work, you essentially are selling a right to your property—in this case, your intellectual property, which is intangible. And because it’s intangible, the process may be less clear than if the object in question were a tangible object, like a car or a house.
According to Olivera Medenica, partner at Wahab & Medenica LLC, a law firm in New York City that specializes in intellectual property, when you create an illustration, the actual illustration is not the extent of your property. You have more than that to sell. You have a bundle of rights, including a property right in the actual illustration and in any derivative work, such as other ways the illustration can be used. You must determine how much of that bundle of rights you will sell and how much you will keep. Are you selling a license to use the design for a limited time or purpose? Will you retain the right to reuse the illustration or a version of it for another project? Will you retain the right to use it in your portfolio? On your web site? Or are you selling it outright, as in a “work for hire” agreement? All of these things need to be spelled out.
As for whether you should do work for hire, the Graphic Artists Guild advises against it. In reality, the bigger your client, the less ownership you are likely to retain of the work you create. Plus, design isn’t considered to be “art” the way illustration and photography are. If you decide to do work for hire, the best strategy is this: The fewer rights you retain, the higher your upfront fee should be.
Ideally, you only will need to negotiate once at the beginning of each relationship. Then all future projects can refer back to the terms that are already in place, using a simple agreement (the one-pager) for each additional project contracted.
Beyond providing legal protection, a contract plays a role in your positioning. When you send a contract to a client, you convey this important message: “I am a professional, and I take this work seriously.” This puts you in a position of strength and shows your client that you understand the value of your work. And taking your business seriously demonstrates that you will take the client’s business seriously.
What can a contract protect a designer from?
A contract does not guarantee that someone will not abuse the rights to your work, but it puts you at an advantage if someone does abuse your rights. Without a contract, you have very little grounds for a lawsuit. Olivera says, “Attorneys are not magicians. They need proof. A contract provides that proof, and it will help you get an attorney to take your case on contingency. That means you don’t have to pay legal fees and the attorney only recovers damages once you recover them. With a contract, everything is spelled out as to who owns what. Without a contract, it’s ‘he said, she said.’”
Olivera also strongly recommends registering all work (except work done for hire) with the federal government’s copyright office. “It’s cheap and makes a huge difference,” she says, “and will help in a lawsuit.” That doesn’t mean you have to register every single design separately. You can register a series of designs. (It’s all explained at www.copyright.gov.)
What Should Be In My Contract A Contract And Why You Need One - To learn more about this author, visit Ilise Benun's Website.
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You’ve submitted your proposal, you’ve answered your prospects’ questions about it, you’ve waited for them to make a decision and finally, the call comes: You got the job!
It’s not time to celebrate just yet.
Before you get to work on the project, there is some business to take care of. Don’t skip past this all-important step just because you or your clients are eager to get started on the fun part. Never ever start the project until you have successfully negotiated (and signed) the contract and have a deposit in hand.
You may worry that a contract will “scare off” your clients, maybe even that they will choose a different designer who doesn’t “make” them sign a contract. But if your prospects are bona fide professionals, signing a contract won’t be a problem. They will respect you all the more for having one. If they do resist, take it as one more red flag and beware.
Your business may feel like a very friendly enterprise and you may enjoy your clients, but don’t be mistaken. Anything can happen. People change their minds. Priorities get reconfigured, budgets are discontinued, companies are bought and sold. New bosses make unanticipated changes. Things are bound to go wrong, and you need to be protected.
What is a contract, and why do I need one?
A contract is a document that outlines the terms and conditions under which you will perform your work. It clearly states the responsibilities of both parties and what will happen should problems arise.
The most obvious reason for a contract is to protect yourself and your company. When you sell your work, you essentially are selling a right to your property—in this case, your intellectual property, which is intangible. And because it’s intangible, the process may be less clear than if the object in question were a tangible object, like a car or a house.
According to Olivera Medenica, partner at Wahab & Medenica LLC, a law firm in New York City that specializes in intellectual property, when you create an illustration, the actual illustration is not the extent of your property. You have more than that to sell. You have a bundle of rights, including a property right in the actual illustration and in any derivative work, such as other ways the illustration can be used. You must determine how much of that bundle of rights you will sell and how much you will keep. Are you selling a license to use the design for a limited time or purpose? Will you retain the right to reuse the illustration or a version of it for another project? Will you retain the right to use it in your portfolio? On your web site? Or are you selling it outright, as in a “work for hire” agreement? All of these things need to be spelled out.
As for whether you should do work for hire, the Graphic Artists Guild advises against it. In reality, the bigger your client, the less ownership you are likely to retain of the work you create. Plus, design isn’t considered to be “art” the way illustration and photography are. If you decide to do work for hire, the best strategy is this: The fewer rights you retain, the higher your upfront fee should be.
Ideally, you only will need to negotiate once at the beginning of each relationship. Then all future projects can refer back to the terms that are already in place, using a simple agreement (the one-pager) for each additional project contracted.
Beyond providing legal protection, a contract plays a role in your positioning. When you send a contract to a client, you convey this important message: “I am a professional, and I take this work seriously.” This puts you in a position of strength and shows your client that you understand the value of your work. And taking your business seriously demonstrates that you will take the client’s business seriously.
What can a contract protect a designer from?
A contract does not guarantee that someone will not abuse the rights to your work, but it puts you at an advantage if someone does abuse your rights. Without a contract, you have very little grounds for a lawsuit. Olivera says, “Attorneys are not magicians. They need proof. A contract provides that proof, and it will help you get an attorney to take your case on contingency. That means you don’t have to pay legal fees and the attorney only recovers damages once you recover them. With a contract, everything is spelled out as to who owns what. Without a contract, it’s ‘he said, she said.’”
Olivera also strongly recommends registering all work (except work done for hire) with the federal government’s copyright office. “It’s cheap and makes a huge difference,” she says, “and will help in a lawsuit.” That doesn’t mean you have to register every single design separately. You can register a series of designs. (It’s all explained at www.copyright.gov.)
What Should Be In My Contract A Contract And Why You Need One - To learn more about this author, visit Ilise Benun's Website.
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John PowerJohn Power, founder of Biltmore Franchise Consulting, has extensive experience developing and marketing franchises and business opportunities. He has been in and around franchising for over twenty years. From 1980 through 1990 he conceptualized, organized, and developed the American Video Association. He grew AVA to 2,000 national members, before selling the company it 1990. It was later merged into another home video marketing company. From 2000 to 2005 he worked as a contract marketing and human resources consultant to several local and national companies. In 2005 Mr. Power began working as a franchise development consultant on a full-time basis. Since that time he has helped more than three dozen companies initiate and develop their franchising program. He notes that there are many companies interested in developing a franchise program, and who need his specialized assistance. Mr. Power is a “hands-on” franchise consultant. He said, “I am the ‘nuts and bolts’ person who tends to the details for my clients.” Mr. Power holds a B.S. degree with a major in Marketing. See: www.biltmorefranchise.com You may contact Mr. Power at: jpower@biltmorefranchise.co - Visit John Power's Website |
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