During a negotiation, it would be wise not to take anything personally.  If you leave personalities out of it, you will be able to see opportunities more objectively.  Brian Koslow

From deal making to buying Gucci purses in the streets of New York, negotiating is a part of life.  And yet, many of us are so uncomfortable with it that we cave in and agree to anything!

Some cultures are trained to be ruthless negotiators, and certain areas of America contain more skilled negotiators than others.

I have never been very comfortable with negotiating.  Shopping trips to Mexico would have me paying more than I should just because I don’t enjoy the game of talking someone down on a price.  After all, I don’t mind paying a little more for a box of Chiclets if it means a poor street kid will eat better that night.

But, when it comes to survival in business, I’ve had to learn to negotiate.  I’ve read books such as Getting to Yes and I’ve taken negotiating workshops through Karrass, Inc.  And though I’m not the most aggressive negotiator, I have learned to keep up with the best of them.

Just as there are guidelines to cooking a turkey, there are guidelines to negotiating.  These basic guidelines will help prevent you from making a big mistake during your next business deal:

NEGOTIATING MUSTS:

• Research Before the Negotiation:  Do your homework.  In a business deal, you want to find out as much as you can about the company and the people you are dealing with.  This will aid in your negotiation.

• Know your Numbers Before the Negotiation:  Go into a negotiation knowing what you want.  If you don’t know what you want, you’ll never get it!   Write down on a piece of paper three things:

1. Your desire outcome;
2. Your drop dead lowest outcome that you will agree to if you have to; and
3. Your Deal Breaker, which is the outcome that will cause you to walk away from the deal.

• Ask for What you Want:  Often, a client will pay or give more than you thought.  Don’t be afraid to ask for what you want.

• Talk less, Listen More:  Understand where the other party is coming from.  Ask a lot of questions so that you know what their concerns are and their needs are.  Sometimes it’s not what you think.

• Concessions should be Tit for Tat:  Make sure that if the other party asks you to make a concession (give something extra or take less money), that you are given something extra in return.  In business deals, you can get very creative with this.  Ask for free advertising or extra products or plane tickets, etc.  Avoid granting concessions without anything given to you in return.

•  Change your Offer if Need Be:  Often we are wary of changing our offer in the middle of the game. But sometimes it’s necessary, especially when the deal has changed and new information is gained during discussions.  Don’t be afraid to withdraw something you offered earlier, if it makes sense to do so now.

• Brainstorm to make the deal fair to all:  The best deals are ones that have never been done before, so says Seth Godin.  Get creative;  if you reach a point in negotiations where you can’t agree, think up a new way to get you what you want and to get them what they want.

• Follow up in Writing:  Always follow up a discussion with the points agreed to in writing.  Email this to the client and make sure that you both have clarity on what was discussed.

NEGOTIATING NO-NO’s:

• Never Negotiate Against Yourself:  If you gave an offer or a price and the other person didn’t accept it, DO NOT offer them a lower number.  This is called negotiating against yourself.  Instead, ask them to make you a counter-offer.

• Don’t Fall for the “Hurry up and Sign!”  If your new business partner is giving you the rush-rush to sign a contract before you are ready or have time to think about what you are agreeing to, Don’t Do it!  Ask them to slow down and to allow you the time you need.

• Don’t Negotiate with Someone Who Doesn’t Make the Decisions:  If the person you’re dealing with says “I have to go ask my boss now if he agrees” insist that you deal directly with the person making the negotiating decisions.  Don’t fall for this game.  It’s a negotiating tactic.

• Don’t Agree to Something That Feels Wrong:  Look out for Red Flags.  If the deal feels bad, worries you or turns your stomach, don’t agree to it.  Period.

• Don’t Regret your Decision Later:  Learn to trust your decision making.  Once you make a decision on a negotiation, look forward, move ahead, and never look back with regret.  Learn from mistakes, but don’t feel regret.

• Don’t fall for the “But it’s great Promotion for you” Line:  When negotiating a business deal, the price you are paid should have absolutely nothing to do with how well the product will sell or how many famous people are involved or anything else like that.  When a client uses the “But it will be good promotion for you” line , ignore it.  Don’t give it any merit or consideration.   It’s irrelevant 99% of time.

• Don’t be afraid to walk away if it goes badly:  A bad deal is a bad deal.  Don’t agree to one.

I hope these tips are helpful.  If you have any to add in the comments, please do.   You may want to check out an article on this topic that I really liked titled Negotiation Tips for the Beginner by Man Vs. Debt.

Maria xxoo

PS:  You can find more negotiating tips for art licensing deals in my new book, co-written with artist Tara Reed, called How to Understand Art Licensing Contracts.  Click the link to find out more about it!

 Similar Posts:

• Three Reasons Artists Would Need to use A Contract
• Artists Beware of these Red Flags in Contracts
• How to Never get Ripped Off AGAIN – For Freelancers

“A verbal contract isn’t worth the paper it’s written on” Samuel Goldwyn

A friend of mine is quite famous in Europe.  He signed an Exclusive contract for with a large company that licensed his art for clothing.  It was a hit in Europe, and fat royalty checks were rolling in.

He made so much money that he got himself a new wife and a nice little mansion on the beach.   For a few good years he lived the high life.

That is until early 2008. One day, the checks just stopped coming.

His European licensee went bankrupt.  The money never returned.  He lost his home.  He was devastated financially.  He had to start over again.

Why didn’t he just sign up with another licensee, you might wonder?  He was very popular – it would have been so easy for him to sign up with a new company and do the same thing.

He legally could NOT do any more work in Europe because of two reasons:  1.)  He inadvertently SOLD his name, trademarks and copyrights to the company that went bankrupt; and 2.) He can’t cancel the contract because it doesn’t have a “get out” clause.

Basically, he signed a bad contract, and it’s cost him everything.  (He admitted to me later that he never bothered to have an attorney look over the lengthy contract the company had him sign.)

Something like this is extremely rare, however, I never want to see this happen to you! So I’ve put together a partial list of Red Flags to look out for in a contract.

DISCLAIMER:  I am not an attorney.  But I do know a lot about art licensing deals.  When I consult artists on deal-making, I share my many years of experience but always advise them to talk to an Art Licensing Attorney for answers on contract law.  This information I share comes from years of negotiating deals with Licensees and clients and working with attorneys.

I’ve put together more deals and contracts in the last ten years than most people ever do in a lifetime.  My experience, mistakes and triumphs with deal-making has enabled me to help others with their contract-anxiety.

Sometimes the hardest part about being a creative entrepreneur is putting together the deals.  There really is no one road-map to follow.  Each contract is different from the other.

But there are a few contract terms and concepts that are the same from deal to deal.

There are certain red flags to look out for in any contract.  There are also necessary terms/clauses that should be in every agreement you sign.

Many companies are using outdated, antiquated language that no longer is used in the real world.  Most of the time they don’t even know WHY something is worded the way it is.

So don’t be shy to tell them that you will sign the contract once they make the changes you require. Literally EVERYTHING is negotiable, especially contract language.

In the end, most of your clients are going to want you to be happy, too.

The contract phase is the most important start to a relationship – it’s where you both draw the line at what you’ll give and what you ask for.

Once you get all of that down on paper, you hopefully never have to look at the contract again!  (And if you do, it usually means trouble.)

Here’s my personal list of RED FLAGS that give me goose bumps:

TRANSFER OF RIGHTS: Unless your business plan includes selling the rights to your art outright (some illustrators do this), NEVER transfer your copyright ownership.  Retain ownership to all your copyrights.  Once you transfer your rights to any image, you can’t get it back.  Not even for that coffee-table book you plan to publish about your work when you’re old.  (Read my post on the Bikini Model who sold all rights to her image and lived to regret it)

REMEDY:  Ask the client to replace the “TRANSFER OF RIGHTS” language to a statement that says the Artist retains all rights to copyright in the artwork.

LONG TERMS:  I’ve seen contracts that have as much as a ten year term!  That’s just too long.  A typical licensing contract is one or two years.  (If you like each other, you can always renew)

REMEDY:  Ask the client to lower the contract to two years.  That is a very reasonable amount of time.

AUTOMATIC RENEW: Some contracts are for a certain period of time, say 2 years, and the term listed in the contract states that it automatically renews for another 2 years unless either party gives 60 day written notice.  (Or something along those lines.)

Who in the world is going to remember to cancel a contract, almost two years into the future? Sure, you can put it on your Google calendar, but what if something goes wrong with that?  Then you’re stuck for another two years without a chance to cancel.

REMEDY:  Ask the client to limit it to a specific time period (ex:  June 1, 2011 to May 31, 2012).  And tell your client “If, at that time, we both want to renew, we can do so with an amendment to the contract.”

WORLDWIDE:  Some companies will want their license to be granted to sell worldwide.  It’s extremely rare that a company sells their product in EVERY COUNTRY IN THE WORLD!  No contract should have the territory of WORLDWIDE unless they’re Coca Cola.

REMEDY:  Ask the client to give you a list of countries where they are already selling the product, and then replace the word “WORLDWIDE” with their list (Example:  “Territory:  North America, Canada and the Virgin Islands.”) This leaves you free to doing a similar deal with a company in other territories.

EXCLUSIVE:   BE AWARE OF THE EXCLUSIVE!

One of my consulting clients showed me a license agreement he was about to sign with a publishing company.  It had a sentence that said that the agreement was Exclusive, World Wide, for all products!

Now, it’s literally impossible for a company to make EVERY SINGLE PRODUCT available, and in EVERY COUNTRY IN THE WORLD! Turns out, this particular company only sells in the U.S., and not in large quantities.

REMEDY:  Ask the client to change the wording to Non-exclusive, and have them specify the actual products that they are making (i.e. canvas art prints or bobble heads or mohair sweaters, etc.).

If my artist had signed this agreement the way they had it worded, it would mean that if a large Australian print company approached him to sell his prints in the South Pacific, he would have to turn them down, and that severely limits his ability to earn more money from his art.

ALWAYS THINK TWICE BEFORE SIGNING AN EXCLUSIVE. It can be extremely limiting.  Often, companies asking for an exclusive don’t even know why they want it.  But it can seriously hurt you and future sales of your art.

*Caveat:  I have this discussion with seasoned artists and some do sign exclusive agreements, for very narrow definitions of product lines. There are exceptions to every rule, and you should just be aware of what you are getting yourself into before signing.

Reasons NOT to sign an Exclusive Agreement:

LOSS OF INCOME TO THE ARTIST:  There’s no guarantee that they’ll do a good job of selling your products and you may not make much from the deal.  In the meantime, you’re not able to go into a deal with anyone else that could be paying you.

Most large companies, experienced in licensing art, understand this concept. When we went into a deal with the huge company Converse, they didn’t even ask for an exclusive.  I find it’s usually the smaller companies that try for the exclusive, not understanding why it’s a bad deal for you.

BANKRUPCY:  Bankrupcy law in the U.S. requires an exclusive agreement to be considered an “asset” of the company who goes bankrupt.  This means that if your Licensee goes bankrupt and stops paying you, you are still held hostage to the exclusive agreement – you aren’t able to cancel the contract and work with any other company. (We once signed on with the 3^rd largest toy company in the U.S. – they went bankrupt 1 month later.  Luckily, we didn’t give in when they insisted on an exclusive.)

In some cases, I’ve had a Licensee STRONGLY insist on an exclusive.  Usually it’s because they don’t want you going to their competitor with the same designs or art.

When a client vehemently opposes a non-exclusive, I ask them a lot of questions to fully understand what their issues are, and then try to find a way to give them what they want while protecting my needs.

In other words, I get creative and find a way to give them what they need to feel secure, while not giving up my ability to earn money elsewhere.

Once we did a deal with a rather large boot company.  They were putting a lot of money into Drew’s program, and wanted assurance that we wouldn’t take the designs to a competitor.  That was a reasonable concern, so to ease their minds, we signed an agreement that specifically stated:  “Non-exclusive.  Artist agrees not to license the designs named in this contract to competing sheep-skin shoe companies for a period of one year.”  We were very specific, which made us happy, and we gave them what they wanted, which made them feel good.  Everyone wins!

TWO GOOD REASONS TO SIGN AN EXCLUSIVE:

1.)  IF THEY ARE PAYING A HANDSOME GUARANTEE:  In the licensing world, a guarantee means that you will be paid a specific minimum dollar amount in royalties, regardless of how many units actually sold.  A guarantee is usually included in a contract that’s exclusive.

Example of a Guarantee: Minimum of $15,000 per quarter is payable to Licensor (the artist).  This Guarantee means that we get paid a minimum of $15,000 (or insert any number you wish) no matter how many products are sold (even if none are sold).

Asking for a guarantee usually inspires the client to change “exclusive” to “non-exclusive” in a hurry.  After all, they don’t want to be on the hook for that much money should the product not sell in the marketplace.

And on our end, we don’t want to be tied to an exclusive contract should the Licensee not sell large quantities.

2.)  IF THERE ARE SPECIFIC LIMITS IN THE CONTRACT:

If you agree to an exclusive, you should very narrowly limit the following:

• The term should be as short as possible (i.e. one year)
• The Product should be as specific as possible (i.e. Long sleeve sweaters made of mohair)
• The Territory should be very specific (i.e. East Coast of North America – or wherever they are actually selling)

WHY?  Because the more specific you are, the freer you are to go into other deals.  After all, you’re in this to make money, right?  You don’t want to tie up your possible income streams by giving an exclusive for items or a territory that a company isn’t even engaged in.

NECESSITIES IN A CONTRACT:

If there’s one important thing in a contract for you to know about, it’s this:

Always have a “GET OUT” Clause. Now, I’m not sure if “get out” clause is the proper name, but it’s what I call a way out of a contract.

The “get out” clause should allow you to cancel the contract with a thirty day notice for the following reasons:

• The product is not sold in commercially sufficient amounts (thus you aren’t making enough money)
• The Licensee sells their company (you don’t know the new owners – you can always sign on with them later)
• The Licensee has not paid you on time or at all
• The Licensee has been seen in poor light in the publics eye (i.e. Toyota with their failed brakes)
• The Licensee breaches the contract in any way (i.e. they don’t pay you on time)

The most important one, though, is the first one.  If they aren’t paying you enough, it’s a good reason to cancel the contract.

APPROVAL OF PRODUCT: The artist should always require that they give approval of the samples of the product before it’s made available to public.

SAMPLES:  Artist gets samples (you choose how many) of each product produced.  They should be shipped directly to the artist – shipping paid for by licensee.

SIGNATURE:  Artists’ signature and/or logo should legibly appear on each product and packaging, in a manner required by the artist.  (Spell out how you want it to look)

There is so much more, but these are the first things I think about when looking over a contract or license agreement.

I hope this is helpful, and please print this out and save it for the future, should you find yourself in the position of having to navigate a licensing contract.

My number one advice, though, is this: Hire an attorney that specializes in Art Licensing (do NOT hire Uncle Bob who does business contracts) – and have an art licensing template made up for yourself.  It will cost you about $500 – $1,000 initially, but once you have it, you can use that template again and again for all of your licensing deals.  In the long run, it will save you time and money.  You MUST invest in yourself if you are going to find success!

If you have ANY deal-making or contract questions AT ALL, ask me in the comments please.  I’ll do my best to answer.

Here’s to our success!

Maria xxoo

PS:  I provide consulting for artists and I specialize in deal-making and navigating art licensing.  For more information, click on my consulting page.

My goal is to help each of my artist clients to learn to feel confident with deal-making and going into contracts.

.

 Similar Posts:

• Should you Sign an Exclusive Agreement – What to Consider
• Three Reasons Artists Would Need to use A Contract
• Help, a big company wants to license my art. What do I Do?

“Money is better than poverty, if only for financial reasons.”  Woody Allen

Being “ripped off”.  I really don’t like the negative sound of those words. But I’m compelled to write about it because it’s a topic that comes up again and again.

Yesterday an artist was in my office and she said that she’s been stiffed on payment too many times to mention.  It’s worn her down and she feels unappreciated.

Getting stiffed on payment is sadly one of the most common and frustrating things that can happen to freelancers.  It happens to artists, photographers, filmmakers,  web designers and just about every small business owner at  one time or another.

But it doesn’t have to ever happen to you (again).  It’s very simple to avoid.  You just have to do two things:

1.)     Require a deposit up front

2.)    Require the full balance at completion

The INSTANT you institute these two policies for your small business, you will NEVER have to make a collection call EVER again.

If it’s this simple, why do so many people continue to get “stiffed” on payment?

Because they don’t ask for the deposit up front and they hand over the goods before being paid.  It’s too bad that art school doesn’t teach you the importance of running your art venture like a business.

Here are some of the most common excuses I hear from people who keep getting ripped off:

• “I don’t have a business mind”
• “I’m new at this”
• “I need an agent to do this for me.”
• “I needed the work really bad – I was desperate.”

Handling your business wisely is a decision you make, not a gene that you’re born with!

Please trust me when I say that YOU DO NOT HAVE TO HAVE BEEN BORN WITH A BUSINESS MIND TO AVOID BEING RIPPED OFF!

You just have to institute your own payment policies.

I learned this the hard way when, many moons ago, Drew was “hired” by the large clothing company American Eagle.  They asked him to create a detailed artistic map of one of the Hawaiian Islands.  The art was going to be used for t-shirts and other accessories.

They were on a tight deadline and needed it yesterday.  There was no time to get a deposit.  Drew put in many hours drawing this up, and the art director at American Eagle kept making changes.

Their final change is what led to the non-payment:  They decided not to use a map after all.  We sent them a bill for the work done, and they never paid us.  Dealing with a company that large is nearly impossible to get payment from AFTER THE FACT.  That’s why we should have gotten money up front.

We were, by some standards, ripped off, taken advantage of and screwed over.

But I’m a firm believer that no-one can take advantage of you without your consent.

It was our own fault for not getting money up front before Drew put in many hours of work.

That was the LAST TIME we ever got stiffed on a commissioned job.  We learned from our mistake, and since then have required 50% up front and the balance when finished (before we hand the art over).

THE PSYCHOLOGY OF REQUIRING A DEPOSIT

Two important things happen when you say to your client:  “I’ll need 50% up front to start the work and the balance is due when the work is completed.”

1         You are viewed as professional:  Your client now sees you as a person who has payment policies in place.  They respect you, and they are clear on what you expect and how it’s going to go.

2         A commitment is formed: Your client is fully committed when they pay a deposit.

When someone pays a deposit towards something, they are making a commitment to the project.

It’s a psychological thing.  Without a deposit, there is no real commitment from your client.  It’s like buying plane tickets.  My trip to New Zealand last year was just talk until I plunked down the $1,800 for plane tickets.  Once that money was paid, it was a reality.  We were fully committed.

HOW MUCH OF A DEPOSIT SHOULD YOU ASK FOR?

Many artists require 50% up front.  The average, according to the Graphic Artists Guide to Ethical Pricing, is 30%.  I prefer the 50% and so does my bank account.

HOW DO YOU ASK FOR A DEPOSIT?

In every conversation I have with a new client, I mention, up front (even with friends and acquaintances and my mother’s uncle’s niece) that we need a deposit to get started.  (Hate to say it, but sometimes it’s the people closest to you that will stiff you).

You may feel strange asking for this.  Get over it, do it, and you’ll get used to it and eventually it won’t feel strange anymore.  Learning how to walk was strange also.  But you got used to it.

When giving a price quote, include your deposit requirement in writing by e-mail or proposal.  Here’s how ours looks in a price quote (I grabbed this from an actual proposal for a wakeboard design we did earlier this year):

PRICING:  Fee is $3,800.00.  A 50% deposit is required to start the work, and full balance upon completion.  OPTIONAL:  Original artwork may be purchased within 30 days of completion at a greatly discounted price of $3,500.  (Payments shall be made to Son of the Sea, Inc. PO Box 836, San Clemente, CA 92674.)

And here’s what we put in e-mails sent to clients with big projects, like murals:

We must have your signed proposal and deposit for the mural painting NO LATER THAN 2 weeks prior to the start date.  This allows us to get the materials we need at the pricing we configured for your quote.

Over time, your returning customers will know what you expect and they will be prepared to write you a check for the deposit.  All of our longtime customers are used to the way we work.  They also know that the work will get done to their satisfaction, because they’ve worked with us before.

RESISTANCE TO PAYING A DEPOSIT COMES FROM CLIENTS AND ARTISTS:

It’s not always the client feeling weird about a deposit.  Sometimes it’s the artist.  Here are some of the scenarios:

THE ARTIST DOESN’T REQUIRE IT BECAUSE THEY ARE DESPERATE FOR THE WORK:  If you are desperate for work, than you surely cannot afford to spend time on something that you’ll never get paid for.  A deposit weeds out the payers from the non-payers.  The people who most likely will never pay you are the ones who won’t give a deposit.  The people willing to give a deposit are the ones that are serious.  See how this works?!

THE CLIENT REFUSES TO PAY A DEPOSIT:  If a client won’t pay a deposit, they just aren’t ready to commit.  If that’s the case, than you shouldn’t commit your time to their project.

Don’t get mad.  Just let them know that you are happy to start the work after they pay.  Tell them to call you when they are ready.  Be friendly and professional.

THEY DON’T HAVE THE MONEY:  I’ve run into this many times:  When I tell someone that they have to pay a deposit, and then they say “Oh, I don’t have the money right now.”  This tells me that they may never have it.  So I say “When you do, let me know.  We are looking forward to working with you.”

YOU FEEL YOU HAVE TO PROVE YOURSELF BEFORE YOU CAN DEMAND A DEPOSIT:  If you’ve been at it for less than 2 years you may still have to prove yourself before you can require a 30% – 50% deposit.  Maybe the client isn’t sure of your abilities and they are nervous to trust you.  In this case, lower the amount you ask for to 20% instead.

YOUR CLIENT IS A HUGE 5 BILLION DOLLAR COMPANY AND THEY TAKE 3 WEEKS TO CUT CHECKS BUT NEED YOU TO FINISH IN 2 WEEKS:  I’ve been faced with this scenario a few times.  Here’s what I do:   I ask the client to write me a personal check and they can bill their company for it later.  Some people laugh at that, but the serious ones send me their personal check.

THEY FLAT OUT REFUSE:  If they just refuse to pay a deposit, than most likely you’ll never get paid, no matter what you do, because of a lack of commitment on their part.  So walk away.  You’ll save yourself a lot of wasted time and frustration.

IF YOU’VE BEEN A PROFESSIONAL AT YOUR TRADE FOR OVER FIVE YEARS:  You can STOP proving yourself.  No one should question you at this point.  You have good references that the client can call if they doubt your abilities.

EXCEPTIONS TO THE RULES:  Of course, there are exceptions to every rule.  We made an exception when we did a deal with Converse - Drew started the work before we got our deposit.  They took 6 weeks to cut us a check.  But we have a good relationship with our people there, and I knew they would take care of us.  I very rarely make the exception, because of being burned in the past.

LEARN FROM YOUR MISTAKES

If you’ve been “ripped off” more than a couple times, than you need to look in the mirror and ask yourself what you’re doing to cause this.  Analyze what’s happening – are you keeping your end of the bargain?  Do you meet your deadlines?  Are you a joy to work with?  Do you behave like a professional?  It’s important to learn from our mistakes and then change the way we do things if something isn’t working.

I read somewhere once that the definition of crazy person is:  Someone who keeps doing the same thing over and over again but expecting a different result!

SIMPLE RULES FOR PRICING:

If you follow these simple guidelines, you’ll never have a problem getting paid:

Put your price quote in writing (e-mail is fine) – this way there are no surprises on either end.  Give your quote leeway to add to it in the event that the scope of the work changes.  (We do this by adding this sentence:  In the event of unforeseen additional work due to conditions on surface or changes to the design by the client that may require extra labor or detail, this price could change.)

Have a payment policy and include that in your price quote (i.e. 50% down and balance due at completion)

Put a 30 day limit on your price quote – your situation could change or your materials costs can go up.  On my proposals I’ll put:  Proposal Date May 27, 2010.  Proposal valid for 30 days

Don’t begin the work without a commitment from your client in the form of a deposit

Send your client frequent updates of the progress of the work, along with photos of the progression.  This will give your client satisfaction knowing that you are working on it and that it’s getting done.

When it’s finished, send them a photo of the completed work and arrange to get final payment at the same time you hand over the goods.

I sincerely hope this article convinces all of you out there to institute your own policies.  Even if you are a part-time freelance artist or photographer, you are in business.  Your time is valuable.  You should be paid for your work.

Please, in the comments below, let me know what problems you’ve had on this subject and how you’ve dealt with it!

Maria xxoo

.Similar Posts:

• How to Price a Wall Mural – Developing a Price Sheet and Proposal
• Fear Giving a Price Quote? The art of the Deal Memo
• Painting a Wall Mural: Ten Ways to Please Your Client

The big misconception about contracts is that they are only necessary for big dollar deals, or for strangers.

The reality is that contracts help to avoid misunderstandings by clarifying each person’s responsibility.

And this is necessary to keep a good relationship with your clients and the friends that you do business with.  (Yes, I said “friends.”  Use contracts with them, too.)

Here are three good reasons to put your agreement in writing:

1.)    To make sure that both parties are agreeing to the same thing. Verbal agreement is where misunderstandings and assumptions happen.  Written words provide clarity.

During the process of drawing up the agreement, you will hash out details with your client that you otherwise may not consider.

An example:  A gallery wants to carry your artwork.  The consignment agreement spells out who is going to pay for the shipping to and from; when the gallery has to pay the artist when a piece sells; who is financially responsible should the artwork become damaged; and so on.  These are the little details that can become big later.  The contract spells it out before you ship $50,000 worth of your art to a gallery.

2.)    To hold each party accountable for what they’ve agreed to.  Over time, you’ll forget exactly what you’ve agreed to.  The contract will refresh your memory.

3.)    To cover your butt. This comes in handy if ever accused of not holding up your end – refer to the contract and point out that you are.  (Or read it and go, “oh yeah, I agreed to that”!)

When we did our deal with Seven Films to create the DVD “Paint Pen Techniques with Drew Brophy”, I asked one of our new partners if he wanted to draw up the contract on his end.

He said “Oh, we don’t need a contract.  We’re good friends.”  To which I replied “Yes, and if we want to remain friends, we’ll need a contract!”

It’s a good thing I insisted, because we later discovered some inconsistencies in our thinking!

I drew up the contract myself, thanks to a very good template that I found online.  I outlined the various points that we had all agreed to in our meetings.

When I presented the contract to our new partners for review, they shook their heads no.  “What?”  I asked, confused.  They pointed out a few items that they hadn’t agreed to.  I had misunderstood certain details.  We discussed it then and there, came to an understanding, and I revised the contract accordingly.  Had we not had a contract, and that issue came up later, we would have been on opposite ends, arguing about it, and it could have been a problem.

For artists, it’s especially important to have a contract for the following situations:

• Gallery Agreement and any type of Consignment
• Licensing
• Events where the artist is hired to attend/perform at
• Any form of partnership where there is a royalty or shared profit

You don’t have to hire an attorney for all of these items.  You could find a gallery and consignment agreement in the back of many books for artists, particularly The Graphic Artists Guild Handbook: Pricing and Ethical Guidelines.

You can also do a search online and find many contracts which you can download and adjust according to your own situation.

For the larger deals, such as licensing, I strongly recommend finding an attorney that specializes in that area.  You never want to use a general attorney for licensing deals – they won’t know all the issues.  There are many attorneys that specialize in artist’s issues that you can find online.

The good news is that dealing with contracts gets easier and easier.  Once you have your templates, you can re-use them over and over again, making minor adjustments to fit each deal.

Cover your butt and use contracts!  I wish you great success –

Maria xxoo

PS:  Feel free to ask me anything on this topic.  I’ve dealt with more contracts in my life than most attorneys do!  I’ll do my best to answer all your questions.Similar Posts:

• Artists Beware of these Red Flags in Contracts
• Basic Negotiating Tips Anyone Can Use
• How to Never get Ripped Off AGAIN – For Freelancers