Maria Brophy

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business of art / Pricing / Written Agreements

The Deadbeat Client: Consequences and Prevention is the Cure

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Delivering art to a good client makes my job a joy!

Now, in every newsletter I send by email:  FREE sample forms for creative entrepreneurs: a Deal Memo, an Illustration Proposal and an Amendment to a Contract – my gift to you for being on my e-mail list!

Most of my illustration clients are wonderful to work with.  I’m blessed in that way.

However, every now and again I run into a business deal that just isn’t a virtuous match.

A recent scuffle with a not-so-ethical client has inspired me to write this article to help you avoid being stiffed on payment.

I have written about getting “ripped off” many times because it happens so often to artists.

Usually it’s their own fault for not getting a deposit up front and for not writing up a proposal or agreement.

But, let’s give the artist (and me) a break for a moment.  We are all human – we get caught up in the excitement of a new idea so much that we sometimes throw our business sense out the window.

But no more!  In this article, I’m going to empower you with two very effective tools:

1 – PREVENTION:  A method that will ensure that you are paid for your work every time.

2 – RESOLUTION:  A sure-fire method to resolve a situation when the client won’t pay.

But first, can you relate to this common scenario:

A client calls on you with an exciting idea for a new project.  They need your creative genius to transform it into a beautiful visual.  (You are flattered – and this is where the trap first opens.)

You are swept away in their enthusiasm.  You fervently begin the work without a deposit or a well-written agreement.

The project starts off great; you’re having fun bringing this client’s vision to life.

Then, they start giving you a lot more to do than what was originally planned.  They keep asking for more work and the project drags out.  You’re losing money by turning down other work because this has become the never-ending project.

You realize you’ve grossly undercharged for what you’ve been roped into.

To add to your stress, they have excuses for not making payment.  They string you out like a dead-beat dad.

Now, you feel taken advantage of and you lose all enthusiasm.  It’s become a project of dread.  When the client calls, your stomach hurts.

Where did things go wrong?

I promise you, this scenario can be easily avoided.  I know because this recently happened to us, and it’s because I let my guard down and didn’t follow my own policy of “Final payment is due before final art is delivered.”  It’s also the first time we’ve been stiffed in eons.  (And wouldn’t you know, it was a friend – they can be the worst offenders.  Needless to say, the friendship has been compromised.  Read “Doing Business with Friends” for tips on this topic)

HOW TO PREVENT BEING STIFFED

Your mother was right; prevention is the cure to everything.  Have a payment policy in place.  Here’s the policy I use (and will never again make an exception to):

PUT EVERYTHING IN WRITING:  Your price quote and your parameters should be provided to your client in writing BEFORE you start sketching or doing any work on the project.

SPELL-OUT PARAMETERS/LIMITS TO AVOID PROBLEMS:  Here’s a sample of parameters we use, which we have learned the hard way:

SKETCH LIMIT:  Price includes up to three sketches.  Any additional sketch changes will incur a fee of $100 each (this ensures that the client is very clear on what they want in the first place.  If not, then they pay extra for the extra work.)

ADVANCE PAYMENT:  We require 50% up front.  This is a non-refundable advance (deposit), so if the client changes their mind after we put 40 hours into it, they don’t get granted rights to use the art nor do they get their money back.  This protects you from working for free.

BALANCE DUE AT COMPLETION:  Specify that the full balance is due at completion.  And it doesn’t matter if they come to get the art or not, the balance is due on that date.

DO NOT give the client finished art files until the balance is paid in full.  Send low res images so they can see that it’s complete.  But don’t send the hi-res images until it’s done.  Your contract should spell this out so there are no surprises.

GRANT OF RIGHTS HAPPENS ONLY IF PAID ON TIME:  THIS IS YOUR STRONGEST PREVENTION LANGUAGE!  Make sure your proposal or agreement states something like:

Rights to use the art are granted upon receipt of payment in full, provided that payment in full is made within thirty days of completion date.  If payment is made after thirty days of completion, this proposal (or contract) is null and void and rights will not be granted without re-evaluation by the Artist and determined in writing.  All payments made to Artist are non-refundable.”

Without a written grant of rights, they can’t legally use the art.  Never grant rights in writing until after they have paid in full, and on time.  If you don’t specify a date that payment must be made, then they can try to pay you ten years later and assume rights then. (They can try; it most likely won’t fly in court.  Even if you win, it will be a waste of your time and money.)

In my bi-monthly newsletter I share PDF’s with sample Agreement language that spells all these details out, and you can use the same for yourself.  To sign up for my newsletters, click here.

WHAT HAPPENS WHEN THINGS GO WRONG?

So your client (or friend, in my case) had you do all the work, they sucked your soul dry, and they still won’t pay you the rest of what they owe you.  Now what?

This is where you have to make a choice:  Be the victim or be hardnosed.

I don’t know about you, but I’d rather take things into my own hands than roll up in a ball on the floor and cry.

THE FOLLOWING IS THE BEST ADVICE YOU’LL EVER GET, IF YOU TAKE IT:

My best friend Bridget, the beautiful, genius Realtor in Encinitas, taught me this principle:

Give people deadlines and consequences.

And then, just as you would with a child, follow through.

DEADLINES AND CONSEQUENCES:  This works for anything, but in business it has been a lifesaver for me.  No more worrying and waiting to see if someone is going to do the right thing.  I, MYSELF, take control of the situation.

If your client hasn’t paid in full, and the work has been completed, send them a nice letter that contains DEADLINES & CONSEQUENCES, such as this one:

Dear Perry Pickle,

This is a friendly reminder that payment was due on April 5, 2012, as all work was completed on that date.  Please send full payment in the amount of $1,250 no later than April 15th so that we won’t have to incur late fees. (NOTE to reader:  Specifics are key – you give them the due date, the reason it was due, the amount due, and a date they must get final payment to you.)

Also, be aware that grant of art usage rights will occur when payment has been made in full, as long as payment is made no later than May 5, 2012, as specified in the contract.

If payment is not received by April 15th, please add 3% interest to your payment.  (NOTE to reader:  This is one consequence to not paying – an interest charge.)

Once payment has been made in full, you will have rights to use the artwork as specified in the contract.

If payment is not made by May 5th, rights will not be granted and you will not have legal rights to use the art.   (NOTE to reader:  this is the 2nd consequence, and the most important.)

Please let me know if you have any questions.  Thank you, Joe Artist

DEADLINES AND CONSEQUENCES Put you in the driver seat, which is right where you want to be at all times when it comes to your art business.

If the client does not pay by the due date, send them an updated invoice with interest charges applied.

If they don’t pay by your final date (in this example by May 5th), send a final letter notifying them that they have not been granted rights to use the artwork and that any use will be considered infringement.

Let them know that the art will now be available for you to license or sell to other clients.  As the copyright owner, you have the right to do this, as rights have not been granted.

Send the letter by Certified Mail and make sure you get a return receipt for your records.

After sending that final letter, file it away and forget about it.  Be proud of yourself that you are a good businessperson.  Pat yourself on the back!

ALSO:  Make sure you always copyright your artwork, in the event the client attempts to use the art somehow without the grant or final payment made.  This way, if you end up in court, your filed copyrights will entitle you to attorney’s fees and other awards.

Please, take your business into your own hands.  Don’t let anyone, not even a friend, jack you around!

Maria xxoo

.

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33 Comments The Deadbeat Client: Consequences and Prevention is the Cure

  1. Marie Kazalia

    Maria

    Good to read your great advice. Thanks for sharing this information.
    I just emailed this to an artist who will be interested. I think that I am one of the lucky few with a certain gene–unless I have the money in my account, or the signature on the contract, I just can *not* make myself do any work at all. Once things are in place it is like a key that sets me in motion.

    Reply
    1. Maria Brophy

      Marie, thanks for the comment and for passing this article onto another artist. It’s my heartfelt desire to help artists avoid getting in bad situations that can harm them financially. I hope this article helps!

      Reply
  2. William Montgomery

    Dear Marie, your article, The Dead Beat Client: Consequences and Prevention is the Cure offers such excellent practicle advice, Put it in writing, be as clea=r aas possible up front and make sure you receive the fi=unds as called out as specified.

    If we could all follow such solid advice we would be much better off.

    Reply
  3. Nancy

    Thanks for this article! I learned this hard lesson about a year ago. It was a mess all around. I spent 70+ hours on a map illustration and center spread layout and was paid $680 four months after the project abruptly ended, when licensing issues came up! Of course they did not get to use the map legally. After I paid the photographer and the attorney I consulted with, I had a gross profit of $180 ($140 after taxes) to cover the 70+ hours!

    I felt so stupid that I’d allowed this to happen. There was also a pseudo friend involved in the process, but she was not the client. To my complete surprise, the clients rep went in the hospital to have breast cancer surgery prior to signing the contract and three weeks before the map due date. She emailed me the day before she went in and gave me the go-ahead (she’d been toying with the idea for about 8 months prior, without commitment either way) telling me to have the first draft done when she returned to work. I replied immediately, but she had an out of office reply in place already. As I said, a mess all around.

    I had no intention of starting on the work till she returned and we got the contract lined out and the deposit made, but my pseudo friend, who filled in for the clients rep, called me the second week out and told me the client was getting nervous and wanted to see a proof, I panicked and got it together in three days to show him. That was the beginning! There were eight revisions, three of which were massive. I had no time to finalize the contract till AFTER the project was done. I did have sense enough to place a DRAFT watermark in the background of the map to avoid any unlicensed usage.

    This woman expected to get the price I quoted 8 months prior as part of a quote for doing the ENTIRE 50 page publication with the map as center spread and using the existing map rather than a complete redraw, to avoid purchasing an aerial map and the usage for it. Oh and suddenly she went from wanting the original 15,000 impressions to unlimited rights to the work – all for FREE! But of course.

    The local newspaper, who was printing the job, ended up drawing a map for FREE?? at the last moment, since I refused to just hand over my illustration and center spread. I questioned their creative coordinator about the pattern used for drawing the map and she said she used “another source.” Which makes me wonder why they didn’t do the map in the first place, since they did get the rest of the pages to do. What’s that called? In the world of inventors it’s called “dirty hands.”

    Well, I feel better now! I hope someone will read this along with Maria’s insightful article and avoid a trap that is set and ready to be sprung on another well-meaning artist.

    Thanks Maria, for all your articles. I find something helpful in each of them.

    Nancy

    Reply
    1. Maria Brophy

      Nancy, wow, what a story! Thanks for sharing it with us. I’m sorry you went through that, but now you won’t ever allow that to happen again, right?! It’s a great cautionary tale that we all could learn from.

      Reply
  4. John Grunwell

    An excellent column with some very very wise advice for all who will listen. I have been stiffed precisely ONCE for exactly the reasons you list. Never again, I say!

    Reply
  5. Archan Mehta

    Your posts are always enlightening. One always learns something new from your life experiences. Yes, sometimes we bump into less than ideal clients, but your post provides workable solutions to such challenges. Thank you for your valuable insights. May the force be with you, Spunky, always. And here’s three cheers to your fab life.

    Reply
  6. Paul

    A great article and very appropriate for us creatives.

    One word of caution: Be careful using the word “deposit.” I know here in Washington State, deposit is legally defined as refundable, period. Use retainer or advance payment in any legal documents instead.

    Cheers,
    Paul

    Reply
    1. Maria Brophy

      Paul, that is a very important distinction, indeed! Thank you, and I”m going to play it safe from here on out – and call my “deposit” a “advance of payment” instead. Not sure what the law is here in California, but better to play it safe than not!

      Reply
  7. jason Wallis

    Sometimes requiring full payment before usage is a tough call with big companies that have their own systems…
    I am 100% with you on 50% deposit and “pay with your own personal card and get reimbursed” if that’s not their “policy”

    Reply
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  9. Michael Yakutis

    Wow, such a great article! I wish I had read this back when I was first starting out. Even still, your specific contract guidelines will be very helpful to me in the future. But what about this –

    I’m a comic book illustrator and I’m currently in a situation where a client who owes me money has basically vanished from the face of the Earth. He lives out of state, his phone numbers no longer work, he doesn’t respond to emails or postal letters. We have an agreement in place that states he must pay X amount upon completion of each stage of production. There are four stages of production total. I did the first two stages and he paid for them (thumbnails and pencils), but after doing the third stage of production (inks), he has vanished. The contract states that story, concepts, and characters belong to him, the writer. BUT it also outlines the payment expectations, and it also states that I get to keep the rights to any unused character designs. As far as I see it, ALL of the designs are unused since the project is not actually complete and is unpublished.

    Basically, I’m wondering if you think I have the right to use the images myself. I’ve put in hundreds of hours of my time on these stupid things and have only been compensated for a small fraction of that (not to mention the royalties I was supposed to get if there would be any). I’m not too interested in taking him to court since it’d take up too much time and money to do so, not to mention the fact that I can’t find him anywhere. I’d rather just use the art to make a webcomic or something of that nature. What do you think?

    Thanks so much for any advice you may have and for such a great article! I can send you the actual contract if you’d like to take a look at it. It’s only two pages (but I certainly don’t expect you to do that – it’s not your job or your problem).

    Reply
  10. Laura Zarrin

    Great post! I have just that kind of situation going on now. It was a dream client & they warned me that they’re behind on payments. I could really use the money they owe me, but it may never come. I won’t let this happen again!

    Reply
    1. Maria Brophy

      Penny, that’s a great question, and I have the perfect answer! Don’t leave the house until they have written you a check or have gone to the bank to get your money. Refuse to leave!

      Reply
      1. Michael

        Uh…not the best solution, Maria. The homeowner can then call the police and have the artist taken away for trespassing. And I could be wrong here, but I’m willing to bet that Penny is speaking from a personal experience that already happened to her. – if so, then we’d like to know how to handle the situation AFTER the fact. She can’t very well go back into the clients house if they don’t let her in.

  11. penny

    no, i just finished the front of a restaurant and having access to the building at least there I could paint over it if things went south, but like you said in a home, you are not paid, not welcome and have no recourse…..my first and only mural so far is drama free and I am pleased

    Reply
    1. penny

      I wanted to add if it wasn’t clear the work was done on the outside of the building, which made me start thinking of what if you were inside??

      Reply
      1. Maria

        Michael, I’m not suggesting to break the law, I’m suggesting that you not leave the client until they have paid. I have tried this once before (not with a mural, but another art project) and they paid, once they realized I wasn’t letting them off the hook. AFTER the FACT: Go visit the client regularly until they pay – I can’t see why they wouldn’t unless they weren’t happy with the mural, in which case you find out what the problem is and try to resolve it. If they are truly trying to get away without paying, small claims court would be the next step.

  12. Dani

    What if there was no official contract but emails giving proof that the person was to pay me, can I still send the letter of warning? What if after I do all the work the person avoids all contact to pay and does not use the art I put so much labor into? Do I still have the rights to charge?

    Reply
    1. Maria Brophy

      Dani, Thanks for the question! Of course, you can still send a letter of warning. Without a written contract, they don’t have rights to use the art. Just make sure you copyright your images so if it ends up in court, they are liable for your lawyers fees should you win.

      Your 2nd question – what if you do all the work and they don’t pay and don’t use the art: There is an easy way to avoid this scenario – don’t begin work on a project until after the client has paid you a deposit. The deposit ensures that they are committed to the project. If they skip out on the balance, at least you got paid for half.

      Reply
  13. Sergio Rueda

    Maria,
    Great write-up! I do have a question regarding payment once the artwork is done. How do we handle if we complete a mural at their facility and they don’t pay when the mural is done? Besides crossing out the paining or buffing it (sarcasm), what’s the best way to handle that? After all, they got the mural completed with “at best” 50% of the agreed amount.
    Thanks

    Reply
  14. Miss Blossom

    I’ve just been ripped off the other half of the invoice, ie the client has locked me out of the site and refuses to pay for the other half of the design, despite the site being done. Any clues?
    I always get a deposit up front, but clients often add on or ask for me, and we add to the invoice and it leaves us vulnerable.

    Reply
    1. Maria Brophy

      Dear Miss Blossom,
      I’m sorry to hear that happened! Why did your client lock you out of the site? Were they displeased with the work, or are they malicious?
      Your next step would be to find out – call and ask the client to make final payment. If you can, drive over to their place of business and ask for a check in person. Ask if they were pleased with the work you did. If they were not, find out what you could have done differently.

      In the future, to help give you legal recourse, make sure every client signs an agreement that states that they will pay 50% down and the balance at completion. I hope this works out for you!

      Reply
      1. ana freeman

        something simila has happened to me, but the work is at the brink of completion and now i am locked out of the site away from my supplies and the client wont answer the phone. so the work cant technically be finished so i cant collect payment. what exactly do i do in this sort of situation?

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    1. William Lacey Group

      Hello, thank you for this article, that is some fantastic advice which I have already put to good use as I found it while searching for a solution to an awkward client. If it does not work for me I will definitely be following the first advice in developing contracts so I have something to back me up in future but really thank you. It has helped me out a great deal.

      Reply

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