Welcome!

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presentation, so no need to

furiously copy everything.

ABOUT FRESH ARTSONLINE SERVICES

• The Culture Guide

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A warehouse of local artists and creatives

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A wealth of resources for artists and arts administrators

PHYSICAL PROGRAMMING

• Community Supported Art

A subscription for local art

• Workshops & Professional Development- Offered to assist arts administrators and artists

• Exhibitions - We work exclusively with local emerging artists

• Cultured Cocktails

Raises funds for local arts projects

• Winter Holiday Art Market

An annual holiday art market involving over 60 local artists (Last year we sold over $120,000 of local art!)

• M-Lab - Marketing incubator for small to mid-sized nonprofit organizations

ABOUT OUR GUEST experts TONIGHT:Erin Rodgers is a Houston-based attorney with experience in entertainment law,

nonprofit law, and intellectual property. Erin is also of counsel at the Law Office of Al

Staehely, Jr. Her clients have included musicians, authors, filmmakers, and a variety of

nonprofit organizations. Erin has been a featured speaker at the Entertainment Law

Institute, Rice University Media Center, DiverseWorks, and RISE Austin, among others.

Aside from her law practice, Erin is also a classically trained clarinetist, and has

performed with Dave Brubeck and the Louisiana Philharmonic Orchestra as a vocalist.

She currently plays keyboards in Houston band Glass the Sky. Her specialties include

entertainment law, copyright, trademark, nonprofit law, corporate formation

As the Program Director for the Cynthia Woods Mitchell Center, Emily Watts designs

and curates the public artistic programs of the Center, with a particular focus on the

annual CounterCurrent Festival. Formerly, as the Program Director for Insurance at

Fractured Atlas, Emily educated artists in the intricacies of insurance coverage and

worked with insurance companies to develop policies that address the specific needs of

the arts community; in that role, she presented workshops regularly across the country

for artists and arts organizations on insurance, risk management, and emergency

preparedness. A graduate of the Wesleyan University dance department, Emily is still

actively involved in the arts community, performing regularly with inDANCE, a Toronto-

based South Indian classical and modern dance company, in addition to serving on the

Board of Directors for Fresh Arts and skybetter & associates.

• This is not an exhaustive list of considerations for a

contract.

• Specifics are unique to each person, their work, the

relationship between parties, conditions, etc.

• This should not be construed as legal advice; this is

about raising general awareness.

• We realize many contracts are ripped off the

internet, so this is an attempt to uncover issues you

might not think about when drafting a Frankenstein

contract.

The BIG ideas. What we will cover:

• Why you absolutely need a contract.

• Do not fear them. They are helpful to you. They

simply layout who, what, when, where and how

much.

• Understanding the basic language commonly

used in contracts

• Situations that seriously merit a contract

• Anticipating likely problems before you draft

the contract

• Making a contract effective

• Adding documents to your contract to further

clarify details

• What to do when it goes wrong

• Resources

The art of Managing

Expectations Why we highly recommend contracts or LOAs

• To get ahead of potential conflicts by outlining the business relationship: the process of drafting an agreement forces all parties to identify, address and quantify specific issues that often get overlooked in casual verbal agreements

• To detail any project responsibilities for the sake of organization and work flow

• To promote accountability for all involved

• To ensure proper planning (for example: detailing equipment needs for performances, insurance, hanging/lighting requirements for art, availability of funds for payment etc.)

• To C.Y.A.

BEFORE YOU WRITE A

CONTRACT

Let’s get familiar with some basic contract

language and common legalese!

Exciting, huh?

“DEFINING CORRECT PARTIES”

• If you have a legal entity (such as an LLC or

corporation) make sure that all contracts are in the

name of the entity, not yours personally.

• EXAMPLE: “When signed by all parties, the

following shall constitute an agreement

(“Agreement”) dated as of this 6th day of May,

2014 between Erin is the Best, LLC, a Texas

limited liability company (“Company”), and Judy

Rodgers (“Artist”).”

“TERMS AND OPTIONS”

• The length of time the contract is in effect, whether or

not its renewable, and who gets to decide whether to

renew.

• EXAMPLE: “This agreement is for an initial period of

one year beginning on the date of execution. This

agreement will automatically renew for three (3)

additional one year periods, unless either party

provides notice in writing at least thirty (30) days prior

to the end of the current term period.”

“INTELLECTUAL PROPERTY OWNERSHIP”• Who owns the copyright and/or trademark? Is it a

sale or a license?

• EXAMPLE: “Company and Artist agree that Artist

shall maintain ownership of all copyright and other

intellectual property rights in and to any Artwork

provided to Company under this agreement.”

• EXAMPLE: “Artist hereby grants Company an

exclusive license to display the Artwork during the

Term of the Agreement.”

“WORK FOR HIRE”• The employer is considered the author, NOT the artist.

• This can happen either in the scope of employment (graphic designer for software firm) or by contract (session musician at a studio).

• EXAMPLE: “The Film will be the sole, exclusive and perpetual property of Company, free of any claim by Artist or any person deriving any rights from Artist. Each Film will be a “work made for hire” within the meaning of the United States Copyright Act, and Company will be deemed the author thereof.”

“LIABILITY”

• Who is responsible if something goes wrong?

• EXAMPLE: “Company will be fully responsible for

any consigned Artwork which is lost, stolen, or

damaged while in its possession.”

“CONSIDERATION” (making a contract binding)• The benefit each party gets from entering the deal. It

can be monetary, publicity, credit...but each party has to benefit to make the contract binding.

• The contract may or may not actually use the word “consideration.”

• EXAMPLE: “Company agrees to pay Artist $100 for the right to display the work as listed above.” Or “As consideration for this Agreement, Artist will be publicized in Company’s August mailer in no less than a half-page advertisement. Artist acknowledges that she will not receive any monetary consideration.”

“BREACH AND DISPUTE”

• What does it take to break the agreement? When

is someone in violation?

• (See “cure options” for clause - generally breach

will be any violation of any agreement terms,

although sometimes there are specific things that

the contract will confirm do NOT constitute a

breach - i.e. forgetting to give the Artist credit).

“CURE OPTIONS”: REMEDY OF BREACH OF CONTRACT

• If the other party breaks the contract, what steps do

you have to take to fix it or get out of it?

• EXAMPLE: “No failure by either party hereto to

perform any of its material obligations under this

Agreement will be deemed a breach of this

Agreement until the other party has given the non-

performing party written notice of such breach and

such breach has not been corrected within thirty (30)

days after the giving of such notice.”

A FEW MORE THINGS TO CONSIDER:

• Legality of purpose: simply whether the contract

includes potentially illegal activity, rendering it void

• Competency of parties: consideration of mental

capacity, mental health or age (Age of majority in Texas

is 18.)

Additional considerations (continued)• Warranties: caveat emptor (let the buyer beware)

– Implied warranties (e.g. that seller has right to confer title of work)

– Limiting guarantees or returns

– Express warranties (e.g. detailing whether someone is unique or

one of a kind versus original or one of a limited number)

EXAMPLE: Model Warranty:

“This art work, titled The (S)cream, and briefly described as an

abstract figure holding an ice cream cone, is an original work

consisting of 3 numbered panels of 40”x60” in dimension with no

more than 2 other identical originals and no more than 4 other

original sketches consisting of 3 panels of 11”x14”.”

Date:__________

Artist:__________

(*Modified from Legal Guide for the Visual Artist, Tad Crawford)

Additional considerations (continued)

• Assignment of Contracts: determining whether another party can be substituted to take over the contractual obligations

• Nonperformance excused: The instances in which failure to uphold a contractual obligation is excused (e.g. unforeseen disabling illness or outside limitations, like someone refusing to sit for a portrait)

• Statutes of limitations: time in which an injured party must bring suit for the possibility of legal remedy

– Under Uniform Commercial Code, suits involving the sale of goods is 4 years from the time of breach

– Statute of limitations for breach of contract for services varies from state to state, but is also 4 years in Texas

» Note: since copyright is a federal law it has a different statute limit.

Additional considerations (continued)

• Protection of Ideas: ideas are denied copyright protection, but can still be protected by contract

– e.g. Read the fine print when submitting to contests, as you may be giving away your idea

– Frequently, an artist is asked to sign a release form before a submission is considered

– Nondisclosure agreement or confidentiality agreement

– Difficult to obtain an express contract to protect a submitted idea, but can be only way to protect artist (practicality is another matter)

EXAMPLE:

Dear X:

I understand it is your practice to entertain or receive ideas for (define purpose). I have developed X for submission. It is understood that if you use my submission, you will compensate me according to industry standards. Please advise if I should move forward with submitting this to you.Sincerely, X

1.) Creating a collaborative work with the intent to sell

(royalty or shared profit), like cutting a record

Possible concerns: Which parties receive royalties and which are bought

out

Outline ownership of the work or specifically, the collaborative elements--

regardless of payment arrangement

Require consent before incurring any additional shared expenses

If you don’t address this, the default rules are that all contributors own the

copyright equally and any party can license it to anyone else (non-

exclusively) without asking

EXAMPLE LANGUAGE: Next Slide

Here are few situations when a contract is highly

recommended:

EXAMPLE TEXT:

The Writers intend that all music and lyrics in the

Composition shall be merged into a single joint work,

the ownership and exploitation of which shall be

governed by the terms of this Agreement. The Composition,

including the copyright and all other rights in the

Composition, shall be jointly owned by the Writers (who

intend to treat each other as co-authors) and/or their music

publishing designees according to the following ownership

shares:

Name: ________________________________________ Percent: __________

2.) Commissioning new work for a specific buyer/entity

Possible concerns: Cost of preliminary designs

• Cost or limit to additional design modifications

• When written approval of work might be required

• Specify timelines for both delivery and payment

• Conditions for extending timelines due to circumstances beyond artists’ control

• Determine who pays for delivery

• Public art commissions have significantly more concerns, like insurance and coordination with multiple outside entities (engineers, city planners, etc.)

• Grounds for termination

3.) Protecting intellectual property in the case of art licensing:

Possible concerns: Are rights given to licensee exclusive or nonexclusive?

• Which kinds of merchandise is image being licensed for?

• Is there a term (and term limit) to licensing relationship?

• The area in which licensee may sell licensed products

• Determine the royalty and whether it’s based on retail price or net price

continued on next slide

Protecting intellectual property in the case of

art licensing….continued

• Indicate that advances are non-refundable

• Require monthly or quarterly statements of

account (and rights to inspect books)

• Require credit and copyright notice appear on

all licensed products, on packaging, in

marketing, etc.

• Require the right to approve packaging,

displays, publicity, etc.

4.) Performances in any venue you don’t own• Get written confirmation that permits are valid and space

is up to code (Many spaces fly under the radar, which

may work temporarily… until the fire marshall shuts down

your show.)

– For example: what happens in instances a third party interferes

(Fire marshal unexpectedly limits attendance of show or police

officers issue noise violations, etc.)

• Outline payment AND invoicing terms (i.e. if hourly rate is

used to determine rental fee for rehearsals, etc.)

– Include an explicit invoicing timeline to avoid bundled invoicing or

late payments

• Determine who pays for travel expenses (are the

specifics of travel specified? e.g. type of hotel or coach

vs. business class airfare)

5.) Exhibiting in any venues you don’t own (gallery representation or consignment)• Determine limits of exclusivity

• Contract term

• Number of exhibitions (for representation) both in and out of gallery, group or solo

• Determine who pays expenses (cost of transportation of the Artwork including insurance and packing, advertising, catalogs, announcements, framing, special installation requirements, opening reception costs, shipments to buyers, etc.)

• Require consent before incurring any additional shared expenses

• Require artist approval of promotional materials

Continued on next slide

Exhibiting in any venues you don’t own- continued

• Determine commission percentage and terms (also outline whether commissions count as studio sales and are expected to follow same commission structure)

• Determine terms of discounts extended by gallery, including limits

• Outline responsibility for insurance, loss, or damage (e.g. payment to artist for full retail price)

• Require gallery to take proper measures to protect copyright and security

• Appendices: Record of Consignment (listing title, medium, description and retail price, etc.) and Statement of Account

Sample gallery contract from GYST http://www.gyst-ink.com/resources/contractartistgallery.php

Basics of preparing an effective contract:Pre-Game:

• Spend some time thinking about and hashing out potential issues ahead of time.

Don’t withhold:

• be honest and forthcoming about their/your needs, expectations and requirements. (This means you need to know your needs, expectations, and requirements.)

“A problem with so many arrangements, particularly with art that has yet to be produced, is that what is not mentioned at the outset often turns out to be at least as important as what is.” http://www.artbusiness.com/stipend.html

ALRIGHT! Let’s do this!

Basics of preparing an effective contract…cont’dTime it well:

• All too often, the dotted line appears after things have been set in motion-- e.g. press releases for a performance distributed before the location details have been outlined and space rental contract has occurred or before the performers have signed a contract or LOA

• In order for contracts to be most effective, they should be drafted and signed before money has been spent and details have been made public

Negotiation:

• Identify what’s most important to you and set goals and boundaries before negotiation occurs (price, terms, artistic control, credit, etc.)

• Research what the opposite party has done for others, if possible

• Being willing to lose a deal (if it doesn’t meet your standards) gives you power

• Try to handle over the phone so you have an opportunity to hear theother party’s needs and concerns

• Begin by emphasizing what works and where there’s agreement

• Save all written/emailed correspondence and compare contract with terms hashed out

• Be aware that the policies of company or institution may be in conflict with contract stipulations (i.e. the provision of alcohol in performance riders, etc.)

• Know when you need to consult a lawyer

• Track changes (via Word or Open Office) and return both marked up and clean versions of contract

• Know when to walk away

From: http://www.inc.com/guides/2010/09/how-to-red-line-a-contract.html

Combining contracts with Letters of Agreement (LOAs) and/or riders– Letters of Agreements

• Typically, a Letter of Agreement is more informal than a contract

• A contract can involve the exchange of promises between the parties to the contract, while an agreement may simply involve one party accepting the offer from another party. http://contract-law.laws.com/contract-law/contract-vs-agreement#sthash.2TDwtM9u.dpuf

• A Letter of Agreement might include details or minutia best left out of the main contract; then, LOA can be attached in the appendix

• See handout: LOA Template

• See handout: Sample rider

– Riders generally layout in detail the material needs of a project.

Contract addendums:

• See handout: addendum sample

– These are relatively straightforward

Oral contracts

• Can be binding, but are harder to enforce

• According to Uniform Commercial Code,

contracts which cannot be completed

within the year must be in writing

– Also under code, written evidence is required

when goods valued over $500 are sold

Potential Red Flags (amended from

http://www.artbusiness.com/legalprobs.html):

• Exclusivity: Beware when sellers demand

exclusive rights to sell your art over large

geographical areas, particularly if this is a first-

time agreement. Limit exclusivity clauses with

new sellers to six months or less and keep

them local or regional. Renegotiate if you

mutually decide to extend your business

relationship.

• Termination clauses: Beware of termination

clauses which require you to pay back

advances (assuming you held up your end of

the bargain)

Whelp, THAT DIDN’T WORK…WHAT NOW?

• How do you know when you are breaking a contract?

– What does breaking a contract mean when no money is exchanged?

• Recourse upon broken contracts:

– Does the contract layout specific compensation details in the event of breach of contract?

– What happens if you break the contract? Is that clearly addressed in writing?

– What steps should you take? Mediation, court, arbitration?

Practical discipline-specific

concerns to consider/resources:

GRAPHIC DESIGNERS: http://www.hongkiat.com/blog/design-contract-clauses/

STANDARD THEATRICAL WRITING SERVICES CONTRACT: http://www.wga.org/subpage_writersresources.aspx?id=103

FREELANCE DESIGNERS: http://theultralinx.com/2013/07/free-contract-templates-legal-resources-freelancers.html

MUSICIAN CONTRACTS http://www.unesco.org/fileadmin/MULTIMEDIA/HQ/CLT/diversity/pdf/WAPO/10Music_en.pdf

DANCERS CONTRACT: http://danz.org.nz/uploads/sites/danz/files/contract_checklist.pdf (basics of rehearsal terms and requirements, as well as outlining breaks and time for warm-up, etc.) / http://princessraqs.blogspot.com/2014/01/takin-care-of-business-dance.html (clean, safe space to perform, appropriate sound system, etc.)

RECOMMENDED Resources:

Texas Accountants and Lawyers for the Arts

http://talarts.org/

Skyhorse series of Business & Legal Forms for

Fine Artists (Photographers, Crafters, Theater,

etc.): There’s a series writtern by authors Tad

Crawford, Charles Grippo,

etchttp://www.allworth.com/book/?GCOI=5811

5100651320

Some helpful quotes from:

www.artbusiness.comhttp://www.artbusiness.com/legalprobs.html

• “Register your copyrights, especially when you're concerned about your art being reproduced without your permission. Read more about registering your copyrights here-- and why it's a good idea.”

• “Decide whether to sell reproduction rights with your art. If you sell reproduction rights and expect to be paid, include that in your agreements.”

• “Include a mediation clause in your agreements, preferably with nonprofit art advocacy groups such as the Texas Accountants and Lawyers for the Arts or California Lawyers for the Arts (all states and countries have such organizations). That way, disputes have a good chance of being resolved without having to hire attorneys or go through the legal system.”

• “Understand the details of any installment payments, advances, or other creative financing that a seller either offers or proposes.”

RANDOM TIPS

• “Think about including a bankruptcy clause, especially when a seller has not been in business that long. Make sure your agreement clearly states that bankruptcy proceeds from the sale of your art go to you and you alone, and not to whichever creditors are first in line.”

• “Understand loss, damage, and theft clauses. Know whose responsibility it is to insure your art and/or reimburse you in the event of problems. When responsibility is with the seller, make sure they have enough insurance to cover the value of your art. Ask for proof of insurance.”

RANDOM TIPS

IN YOUR INBOX TOMORROW

This PowerPoint

List of Sample docs

Info about upcoming workshops including

Meet Your Media

With Joel Luks, Molly Glentzer, Bill

Davenport

Wed., July 9, 2014

Link to a post-workshop survey