Contract question...

braden H

Hi guys! I received a contract that I'm looking over and there's a clause which seems like a big ol' red flag to me.

'First two payments will be returned if the Artist does not deliver final artwork.'

Is this in any way standard?

Thanks everyone

NessIllustration

@Braden-Hallett I've seen contracts where it might be implied. As in, if one party does not respect their end of the bargain, the other party has the right to declare the contract void. I've not seen refunds explicitly detailed before though.

It kind of makes sense though. If you don't deliver final artwork, the work already done s not that useful. This might be a red flag if you had to return the money if the project was cancelled, or if the client changes their mind and decides not to go forward. But it doesn't seem to be the case - you're only to return the money if you do not fulfill your contractual obligations. I know you have no intention of running off mid-project, so this shouldn't be a problem Do double-check with them that if they are the ones to halt the project, they will not be entitled to get their money back.

jdubz

I'm assuming that in order to get to payment #2, some work has to have been done or a milestone reached that has been approved. So the "get started payment #1" would have gotten you to that point.

Either way work has been done and put in, so there is recognized billable hours taking place and back and forth has occurred.

The other thing I don't like is it kind of holds you hostage if they don't pay the final payment. In most cases, I release artwork or project files upon final payment. The ramifications can be different depending on if you're dealing with one single person or a company though so it may not be a problem in many cases.

What I'd want to know is if there is other verbiage in there protecting you in the event the project changes or is cancelled. When those types of things occur, your billable hours you've already worked aren't just no longer valuable and all monies are to be returned.

If I'm doing a work for hire type contract, I specify that at each milestone, there is a value to hours worked beyond that point. So if deliverables were given, and payment #2 has been made, and they cancel the project in phase 3, they're still going to get an invoice for hours worked from payment 2 to 3. So they won't be out the entire amount, but they'll be out the number of hours they've actually had me commit to a project that they made the decision to cancel. Conversely, if I cancel the project on my end, then I'm forfeiting that revenue.

braden H

@NessIllustration said in Contract question...:

Do double-check with them that if they are the ones to halt the project, they will not be entitled to get their money back.

I think I'm just (probably un-needingly) worried about them asking for a ton of revisions then turning around once I can't do it and saying 'guess you gotta refund us'. I think the very explicit wording of the whole thing just has me a little paranoid.

braden H

@jdubz Thanks for the reply There is indeed a section that states if the client cancels then I keep the money payed up to the point of cancellation.

Jeremy Ross

Hi @Braden-Hallett, I suggest you flag it for discussion. You might redline it and they could simply accept it without discussion.

For example, what if you got sick and we’re unable to deliver the final art until a later date, which was rejected from the client due to schedule issues with the art publication date?

If they terminate for cause or convenience, due to your fault not meeting schedule milestones, would you have to pay back first 2 payments? Termination and Cancellation will have considerably different consequences.

By way of example, If you hired a painter for your house and paid them for work completed, I seriously doubt you could get money back if they couldn’t finish the job for whatever circumstances.

Why would your art be any different? That’s my argument for striking the provision.

I think your gut instinct is correct, and the client has too much leverage as it’s written in their favor.

Hopefully they don’t have anything that says exceptions to the terms shall be rejected. At a minimum, you should flag it for discussion.

NessIllustration

@Braden-Hallett If you're worried about that, make sure to discuss how many revisions you're willing to do, and how much you would charge for additional revision. And make sure you have it in writing that refusing to do more revisions as per the contract is NOT tantamount to relinquishing your rights to your first 2 payments

So yeah just discuss it with them! I'm sure the client hasn't even thought of that (presumably they're entering this arrangement because they want finished illustrations at the end, and this clause is just to protect themselves in case the artist backs out). But of course, just because they don't have ill intent, doesn't mean it's not a great idea to protect yourself too by making sure this clause cannot be used against you through no fault of your own. I'm sure they'll be surprised of this possibility they never envisioned, but more than willing to amend the contract to protect you.

Contracts often have sooo many clauses to protect the clients, and usually they don't mean anything by them except an over zealous lawyer trying to cover all their bases. Some of my contracts state that in case of war, natural disaster or global crises, the contract can be cancelled. I laughed hard when I first read that, but when the pandemic started I thought back on it and wasn't laughing anymore! Many of my clients had actual legal grounds to cancel my contracts and not pay me if they had so desired!

braden H

@Jeremy-Ross Thanks man Yeah, the way it's worded is not artist friendly at the moment for sure.

braden H

@NessIllustration said in Contract question...:

Contracts often have sooo many clauses to protect the clients, and usually they don't mean anything by them except an over zealous lawyer trying to cover all their bases.

Absolutely I'm assuming there's no ill-intent at all. It's just a little strongly worded (and leaves a window open for legal shenanigans, lol)

That's pretty neat about the disaster clause, though! I heard that some sports event (Wimbledon?) purchased literal pandemic insurance (and always has) and this year it payed off, lol.

NessIllustration

@Braden-Hallett Wow really? Good for them!
You're absolutely right that you should close all of those windows

braden H

Thanks to everyone for the good advice!

This was the first time I'd gotten a contract through my agent and I was under the impression it was some standard contract on my agency's part (it wasn't, it was from the client, who I'm certain had only good intentions) and I was more worried that my agency would use a contract like this, lol.

It was actually really nice to be able to email my agent and say 'I'm worried about these bits'. They said 'cool, we'll get that changed' and then I got a new contract which had much friendlier wording and a few extra clauses I suggested.

Long story short, the contract has been amended and I've signed it

Mara Price

@Braden-Hallett I'm glad you did your research. Congratulations.

Jeremy Ross

Congratulations @Braden-Hallett! Another reason to trust your gut, then run it by your SVS friends!

braden H

@Mara-Price said in Contract question...:

@Braden-Hallett I'm glad you did your research. Congratulations.

Thanks

@Jeremy-Ross said in Contract question...:

Congratulations @Braden-Hallett! Another reason to trust your gut, then run it by your SVS friends!

Thanks! This forum really is a goldmine of a resource