Basic Freelance Contract Tips

[jfwalls]

I decided to create a thread here about contracts, and some basic things to include in them. Please feel free to add to what I have here.

#1 - The first part should look similar to the following:

The following shall constitute a contract of service made on June 27th, 2005,

between
Clients Name, representing the company Name, Mailing Address, City, State, Zip. Herein referred to as Client.

and
Your Name, Mailing Address, City, State, Zip.
Herein referred to as Artist


#2 - I usuallly put the payment information next. This of course will vary for each client, but I always put the amount and when it should be payed. You can also include any royalties or other such terms although I usually put them in a seperate section.

Here's an example:

Section 2: Compensation
The Client agrees to pay $400 USD for the artwork. Half of the full amount, $200 USD, will be due upon approval of the pencils, the remaining $200 USD will be paid within 30 days upon completion of the final artwork.

You can also include penalties for not paying. I don't remember specific ones off hand, but the Graphic Artist's Guild Handbook has more on that.

#3 - The next, and just as important as how much and when you get paid, is copyright and ownership. This can be something as simple as you own the copyright, or as complex as detailing how many prints or copies can be made of a certain piece.

Here's a very basic sample of a section I used for some concept art.

Section 3: Copyright, Ownership, and Usage
The Artist shall retain the copyright and ownership of the image, granting exclusive rights of usage to the Client for promotional, advertising, and reference purposes only. Any additional uses of the image for anything other than promotional, advertising, and reference purposes shall constitute a new usage fee of ________.

This is a pretty basic description, but it gets the job done. There are plenty of things that I skipped, but others can add more to this. For the most part I've found that simple contracts work well. You basically just have to remember to write something down to cover almost any situation. Again, one of the best places to get sample contracts is from the Graphic Artist's Guild Handbook.

[Qitsune]

There often is a NDA part to a contract (or a different document altogether) stating when you are allowed to show the art to the public. It makes lots of sense if the customer is preparing a big launch so it's better to know in advance what you are allowed to say about the project, what you can put in your portfolio and when. Customers shouldn't ask you never to put something in your portfolio but in some cases it's reasonnable that they ask you to wait until they have made it public.

They might also want to keep private how much they paid you, or different details about their projects. If you are writting up a contract for a mod team or a project, you might want to consider adding one such part of your one. Make sure to keep it reasonnable because fantastically elaborate NDA's are almost impossible to enforce. Reasonable NDA's aren't all that easy to enforce in the first place but at least putting it on paper makes it clear and have a dissuasive influence.

[jfwalls]

Here's some more info I found. When I can find my Graphic Artists Guild Handbook I'll post some samples of the contracts they have. For now you can look at this:

PROJECT DESCRIPTION
ESTIMATED COSTS:
__ Labor fees (design, art direction, production, copywriting, client services, etc.) are estimated at a total of $_________ or ____ see attached estimate sheet for specifications.

__ Consultation fees are estimated at a total of $ __________ or ____ see attached estimate sheet for specifications.

__ Materials costs (RC/film/neg output, scanning, project specific materials, etc.) are estimated at a total of $__________ or ___ see attached estimate sheet for specifications.

Total estimated cost of project: $____________ Project estimates are valid for 90 days from the date of estimate. Project may be reestimated if, upon receipt of all project elements, the designer determines the scope of the project has been altered dramatically from the originally agreed upon concept. Printing fees will be estimated separately and payment arrangements made between client and printer.

PAYMENT SCHEDULE:
__ A deposit in an amount equal to 25% of the total estimated cost is requested prior to execution of the project ($__________).

__ Payment in full or the remaining balance is to be paid upon delivery of the completed project. A cash discount of 5% of the total project labor and consultation cost is offered to clients paying upon delivery of the finished project.

__ Payment in full or the remaining balance is to be paid 15 days from receipt of the final invoice for the completed project. Finance charge of 1.5% per month (18% annually) on all overdue balances.

__ Additional payment arrangements:

REPRODUCTION OF WORK:
__ The client assumes full reproduction rights upon payment for completed project.

__ One time reproduction rights for the specified project, at the agreed fee, are granted to the client. Any other usage must be negotiated.

__ All reproduction rights on the copyrighted work are retained by the designer. The work may not be reproduced in any form without consent from the designer.

__ The designer retains personal rights to use the completed project and any preliminary designs for the purpose of design competitions, future publications on design, educational purposes and the marketing of the designer's business. Where applicable the client will be given any necessary credit for usage of the project elements.

REJECTION/CANCELLATION OF PROJECT:
The client shall not unreasonably withhold acceptance of, or payment for, the project. If, prior to completion of the project, the client observes any nonconformance with the design plan, the designer must be promptly notified, allowing for necessary corrections. Rejection of the completed project or cancellation during its execution will result in forfeiture of deposit and the possible billing for all additional labor or expenses to date. All elements of the project must then be returned to the designer. Any usage by the client of those design elements will result in appropriate legal action. Client shall bear all costs, expenses, and reasonable attorney's fees in any action brought to recover payment under this contract or in which Jeff Fisher LogoMotives may become a party by reason of this contract.

COMPLETION/DELIVERY OF PROJECT
The estimated completion date the project is ______________. Any shipping or insurance costs will be assumed by the client. Any alteration or deviation from the above specifications involving extra costs will be executed only upon approval with the client. Any delay in the completion of the project due to actions or negligence of client, unusual transportation delays, unforeseen illness, or external forces beyond the control of the designer, shall entitle the designer to extend the completion/delivery date, upon notifying the client, by the time equivalent to the period of such delay.

ACCEPTANCE OF AGREEMENT:
The above prices, specifications and conditions are hereby accepted. The designer is authorized to execute the project as outlined in this agreement. Payment will be made as proposed above.

Client's signature ___________________________________________

Designer's signature _______________________________________

Date _________________________

and here's a bunch of other info:

These are the clauses I have included in my own print contract. Yes, I have separate contracts for print and Web design. While some of the clauses overlap, there are some that are unique to Web design and hosting. Your lawyer may suggest additional clauses to the following:

Estimate
This section explains that an estimate or quote is only good for the specified amount of time.

Condition of Copy
If the copy you receive is not as described to you, the estimate is no longer valid and you will draw up a new estimate based on the copy.

Author's Alterations
This section points out that it is the customer's responsibility to pay for any changes from the original project. It should also state something to the effect that mistakes you make will be fixed free of charge.

Preparatory Materials
State who owns preparatory materials: sketches, disks, negatives, etc.

Proofs
A signed proof is necessary before work can be completed. Requests must be made for revised proofs. You cannot be held responsible for errors if the customer doesn't return a signed proof, or if the customer asks for changes without the submission of proofs. Here is also where you state that there may be some variance between color on a proof and color on a finished job.

Ownership of Artwork
Perhaps one of the most important sections: who owns the artwork is explained here. I also include a paragraph that states I have the right to use this work for design competitions, future publications on design, educational purposes, and marketing materials.

Overruns & Underruns
Although this has almost never happened to me, a printer can actually charge you more if they run too many copies (so check their terms and conditions). It is also possible that they don't run enough copies — it's crucial that your customer understand this, especially if they need a certain amount and cannot accept any less.

Expenses
This section explains that the customer is responsible for all expenses incurred by the job.

Production Schedules
If the customer deviates from the production schedule provided, the finish date will change accordingly.

Payment Terms
This section details how you expect to be paid (on delivery of the finished project or Net 30, for example). You should include what the customer must do to notify you of any errors in the job, and in what time period that notification is expected.

Third Party Shipping
You are not responsible for delays that are caused by third parties: the printer, the service bureau, etc.

Cancellation
Also known as a "kill fee", this section explains that if the job is canceled for any reason, the customer is responsible for all expenses incurred to date.

Disclaimer of Warranties
This is where you say that you cannot guarantee that a brochure, Website, etc. is going to bring in truckloads of work.

Indemnity Agreement
Basically, the customer agrees that you are not liable for any legal action that may arise from your designs, or any artwork the customer supplies you with.

As I stated above, these aren't necessarily the only clauses you'll need, but they're certainly a good start. A contract tends to be a work in progress. As you run into new situations, you may have to include new clauses.

One of the most frequently asked questions on the forum is who owns the artwork. That's perhaps the best reason to have a contract, both for you and your customer. The contract should spell out exactly who owns what.

Clauses Specific to Web Design and Hosting

My Web design contract actually varies only a little from my print design contract, but I do keep the two separate. Here are some of the additional clauses you might consider in a Web design contract:

Website Hosting
This section details how the customer will be billed for hosting of their Website, including that the first month must be paid before the site can be hosted (if that's how you charge) and when hosting bills must be paid by.

Browser Compatibility
Define what browser compatibility is, and what browsers the site is designed to be compatible with. Explain that the site may not be compatible with newer versions of browsers that come out after the site is live.

Third Party or Client Modification of Site
Note whether or not it is permissible for a third party or the customer to update the site. Also note what fees may be involved to repair the site if such modification damages it.

Payment
The 50% deposit required before work may begin is mentioned here. Just what constitutes the "delivery" of a Website is also detailed. Rush charges and weekend charges are also explained.

But They Won't Sign It . . .

If the prospect won't sign your contract, then they don't become your customer. I've only had one instance in seven years where a customer even questioned my contract; they did eventually sign. I've even worked with a variety of law firms, and none have ever refused to sign, although some have made slight variations.

One of our forum members says that he does have trouble getting customers to sign contracts. Instead, he includes his terms in his proposal or estimate. Here are some interesting threads from the forum on contracts:

Digital Signatures

President Clinton recently signed a bill into law that gives “digital signatures” the same legal validity as handwritten ones. I was thinking of the implications this has for commercial artists.

I, for one, have gotten “burned” often enough to believe in always using a contract, and have found it to be a good way of preventing “misunderstandings” with clients. Unfortunately, in the fast-paced world of publishing, and especially digital publishing, it is not always practical to hold up a project until papers can be sent in the mail, even by overnight delivery.


I've been using faxed project agreements for over ten years and recently started using emailed PDF files agreements with no problems. If anything, my project agreement often scares off potentially flaky customers.

Read this thread

Rush Fees

I have this one client of mine that called me last Friday and asked me to do a rush job. I had to design a CD label for a multimedia project. It was due on Monday. So rather than spend time with my son (I am a single mom), I had to work Saturday and Sunday. I had to create a template with the right measurements for the CD label, then I had to come up with 3 different designs. This is not the first time they have needed a rush job. Does anybody here charge for rush and what is the standard?


In the proposal I give to clients, it clearly states that any work that is required to be done on weekends or holidays to satisfy a clients "rush" needs will be charged in addition to the quote... but in your case, I would charge AT LEAST time and a half (standard overtime) or double time.

[dinfet]

sweet thanks

[devilry]

Hey jfwalls, you seem to know a lot about contracts and i'm wondering if you can help me out. I'm working up on a contract right now and i've come across a few examples on the internet i'd like to use, not exactly of course. Just as a guide, i'll change it up according to the way i want to draw it up. Is there anything wrong with that? Or is it completely legal to use other contracts for your own personal use?

thanks.

[jfwalls]

devilry As far as I know there's no law against using contracts you find online. I don't think a contract is something that can be copyrighted. However, if anyone knows otherwise please let us know.

[devilry]

Ah, ok, thats good to know, thanks jfwalls.

There's also another thing im wondering about, NDA's "Non-Disclosure Agreements". Are you capable of creating your own NDA contract or do you have to follow a certain standard with specific terms on the NDA to make it valid?

And if you have any helpful tips about creating an NDA, that'd be great as well, thank you.

[jfwalls]

I don't know a whole lot about NDA's. I've only done a few of those, but they're pretty straight forward. I'll see if I can find any samples to put up here.

[devilry]

Oh ok, I've already found a few NDA's by simply 'googling' them, they do seem pretty simple and straight-forward. I guess i'll just follow those and write my own. I never found any NDA's that were towards Artists, if you can find examples of those, that'd be very helpful. Thanks.

[Gilead]

It's worth knowing that if someone sends you a contract that contains clauses that you don't like you can take a pen and cross them out, sign the contract and send it back. If they accept it as such then the crossed out parts are considered legally stricken from the contract. They can of course do the same to you, and you can go back and forth negotiating revisions.

This is true of absolutely any contract that you are asked to put your signature on including car rental agreements, apartment rentals and job applications. It may result in a big hassle, but it is legal.

[jfwalls]

Nice tip Gilead. I never knew that! I always tell people to just take it out, but I like that better.

[Qitsune]

I think that both parties have to initial the alterations (to show you didn't just strike it off afterwards.)

[J.Mac]

does anyone else have anything they could point out? this is a great.

[Mr. Visions]

jfwalls - thanks for that great post.

- Visions

[Pixeldragoon]

Great post, thanks :D

[Lupine]

I've already learned much more about the business aspect of art here than I did in 5 years of college (mind you I had to attend a public college in ND).

Thank you for posting this info!

[carlosranna]

So... I have a question... I´m in a country, my client is in other country. We are having contact by the internet.

How should we do about the contract issues? How does we sign and all?

[bradley]

i wanna second DoInferno 's question, how do you sort out contracts on other side of world, if its for smaller jobs presumably it would take to long mailing?

[Zarett]

I was doing freelance and there's something you can put in a contract where you can pdf-ify it and email it to your employer, have them print it, sign it, scan it, and send it, and then when you sign it it's legally binding. It has something to do with not having to sign the ONE piece of paper, but sign a paper the contract is on...

That's what I did with my telecommuting gig in San Francisco, and a story board job in Belgium.

[Qitsune]

Just remember folks that a contract is only as good as the means you have to enforce it. It's good to ALWAYS have a contract because it avoids many misunderstandings, but often it would cost more to sue someone on the other side of the world than the work you lost is worth in the first place. So the best way to avoid trouble is to work with payments upon milstones.

[carlosranna]

Exactly what a friend of mine, a lawyer, told me... I´m entering a deal now, and i´m i Brazil and my contractor is in Europe. It wouldn´t be worth it to go to court, hehe...

So, we are working on confidence, but i will only start the job after i receive the first part of the pay, wich is divided in two. One for the begining of the project, and other when it´s all aproved, before i send the high res archive...

I think it´s going to be nice this way...

[bradley]

cheers guys big help for me. So i could put in the contract that at a certian stage i would recieve part of payment and the rest when i hand over the finals? seems fair. i guess it depends alot on the size of job, big jobs were there is more at stake you might want that reasurance of payment at stages.

thanks for help

[Ebony-chan]

Man this is good stuff here. I learned alot from reading this.

[kendi]

If you look at the very back of the book 'PRICING AND ETHICAL GUIDELINES FOR GRAPHIC ARTISTS', there are about 2 dozen pages of standard contracts used in the industry for a variety of occasions. The book also contains advice, industry standard practices/manners, and rate ranges that are charged in the industry, based on actual data from registered businesses (not students and amateur freelancers) - just so you know what others are charging, not to mandate that all artists should charge the same.

This book contains various genres of the art industry including, but not limited to web design, concept art, animation, textile design for fashion, industrial design, comic book art, etc. Even if you think your area of expertise might not be covered in the book, CHECK IT OUT! It just might give you the insight you need to quickly become a little more educated before you go out and make negotiations, - or even, so that you can ask more educated questions to your potential employers.

The book can be checked out from the library or purchased from the graphic artist guild's website.

[Matt_Stevens]

Are there any sample contracts available online that can be downloaded? In the screenwriting world there are numerous contracts available that one can download and then edit, which is a God-send. I have not found this in regards to a writer (me) hiring an artist for a project.

I have a real hard time with legal-speak. :(

[atlsouthpaw]

There is a great book out there for base contracts. I use it all the time and the contracts are customizable to your specific needs. It's really a book any serious illustrator needs in their library. Go pick it up and good luck.

http://www.amazon.com/Business-Legal-Forms-Illustrators/dp/1581153643/ref=sr_1_1/002-1253874-7329664?ie=UTF8&s=books&qid=1181853337&sr=8-1

[paramnesia]

A friend and I are writing up a contract, and this thread has proven to be a great guide for me as I wait the arrival of my GAG handbook. I'm trying to include various scenarios, so she can cut out anything that does not apply and edit as need be, but there are two conditions I could use help with.

1) Royalties. I've included a statement with the payment details, however I'm uncertain of my wording.
2) Collaborations where the ownership or authorship (two different conditions perhaps?) is jointly held. I've read about the copyrights with respect to joint authorship here (http://beatblog.typepad.com/melon/2007/09/copyright-joint.html), but how much must be specified in the contract? Is it enough to simply say the work is co-owned and/or co-authored?

[One Girl's Dream]

Royalties are tricky... you may need legal assistance. In a written contract, wording is everything. Things become complicated when you just put down what you think you mean in a general way. Legal documents have to be precise and to the point, and there may be usage of specific language that you may need to know, or want to avoid using (such as the commonly mis-used term 'work-for-hire': that means you sell all your rights to any work created within the project's parameters. It doesn't mean that the document is a general freelance contract and that you are "hired" to "work" on a "project-to-project" basis.) You might contact the guild (GAG) for general legal guidance on royalties. Not sure, but sometimes, they offer their services for free to struggling artists.

The best place to find out about joint copyrights, is to go directly to the source (not some blog) at www.copyright.gov/help/faq/. However, again, as far as wording goes, it's best to consult with a lawyer for royalties and partnerships.

The thing is, being paid royalties means you should be legally allowed to check their books and files periodically (whether quarterly or annually) to make sure they're getting it right and not cheating you. You also may request for quarterly payments or annual lump-sums, and you may want to include small things, like the renegotiation of terms after 35 years, etc. In joint copyrights, you might want to think about merchandising and possible licensing of work, and who and how it's decided when it comes to various opportunities. And can one co-author create a derivative or alter the work, without the other co-author's approval, and to what extent?

Co-author implies that there were multiple creators. Co-own means that something is owned by more than one entity. By default, copyright belongs to the creator. The only way that the creator would not own the copyrights, would be because they have transferred them away via a contract: For example, a work-for-hire contract, a contract selling all copyrights, or a contract selling partial copyrights. Then the owner of the copyright may not be the author of the work, and the author of the work would not legally anyway, be the owner of the copyrights. Selling copyrights, is in some 'twisted' way, is kind of like selling your parental rights of your birth child to someone else... (I say twisted, because I'm sure the analogy might be strange to some people. A drawing is hardly like a REAL child.)

This is exactly why you need a lawyer for royalties and collaborative efforts, if you want to do it right. If it's not worth the time and money investing legal advice, I'd suggest to 'just trust your friend' that they'll not act unethically, and just make a general set of rules that you both agree to abide by. The document may not stand up in court as you'd like it to, but at least you and your friend is at an understanding with one another - on ethical terms, anyway.

You'll just have to trust them, and if you get bitten... well, turn the other cheek?

Good luck.

[Revolution77]

this is all very helpful! is there a place I can get a sample contract? i did a little research and haven't found any. but if you guys have anything that would be very helpful. thanks

[KirbBrimstone]

So very very helpful. Thank you.

[glikster]

The safest place to get a sample contract would be to ask a local professional. There are tons of sample and contract templates all over the internet, but you have nearly no way of knowing whether they're any good or not.

If you're in a city with a law school, try contacting them to review a contract or help you draft one. Some have clinics that offer free legal advice.

[templater1]

oh, very interesting information, thanks for sharing

[unconnected]

As an artist one thing that could possible save you a massive headache in the future is to create a revision policy upfront to prevent picky/unsatisfiable clients from turning an 8 hour job into a 30 hour job because of an endless series of revisions. You need to be reasonable obviously but be clear that with each asset they only get so many revisions before they start getting charged extra. This can save you from getting into a very uncomfortable conversation with your client but if the client knows there's 3-4 revisions max then chances are they'll be extra clear with their vision from the get go, making your life that much easier in the long run