My local ASMP chapter offered up a great discussion on contract negotiations with attorney Steve Zakrzewski of Gordon & Rees. In his opening he made a disclaimer that I am going to repeat here.
"The information presented is not to be construed as legal advice. If you have any legal questions regarding your particular situation seek out a qualified lawyer to answer your questions."
That said, the information discussed during this presentation is to help us (photographers) understand what areas of a contract should be included, what we should pay closer attention to and how to present our contract. Also keep in mind that I am, as far as I am able, paraphrasing based on notes taken during the presentation and are by no means a verbatim dictation of what attorney Zakrzewski said. My notes are also not presented in the same order. I have reordered my notes in what I feel makes a better sense of order.
All right, disclaimers are done. I'll begin with a statement I have heard and read many places when the topic of contracts comes up; "Hope for the best, plan for the worst."
Drafting a contract can be mentally exhausting, even challenging, specially for anyone not familiar with contracts. Whether you choose to draft your own or want to hand the task over to someone else you should consider having a lawyer review the final draft. A lawyer can spot potential problems, any omissions that need to be addressed and correct any language that is too ambiguous.
There are several important sections a contract should have but the most important for us, as creative content creators, is licensing. You want to make sure that the terms of the license be very specific. The licensing section of the contract protects your creation and defines what the client can and can't do with that creation.
Getting to the terms of a contract comes after a series of compromises between the two parties. Each wants to protect their investment. In the case of a dispute Mr. Zakrzewski encourages finding a compromise. Going into litigation is expensive and often results in too many losses. Every possibility should be exhausted to avoid going to court.
Special attention should be given to the indemnity section of the contract. This section covers the compensation for loss in the case of any problems. The language here should be used to minimize your downside. There are several parts to the indemnity section.
Liquidated damages covers reimbursement, or payment, in the event of client cancellation or misuse of photos or videos. It is often hard to prove value of an image. In that case it is best to estimate an amount. If value is known that set amount should be listed int the contract.
Liability states who is responsible for what and how much according to specific scenarios. What happens to deposits (or retainers), who's responsible for lost or damaged equipment, what kind of restitution in the event a job isn't completed according to expectations or per the contract and anything where there may be some kind of monetary loss. Things like errors and omissions can be difficult since it usually tries to cover things that aren't spelled out. The wording used should be written to minimize loss.
A part of the liability section to consider is a section refered to as Force Majeure that covers things that are often out of anyones control such as acts of God (weather, natural disasters), fire, theft of equipment, injury, death, etc.
Merger clause is language that states the written contract supersedes all other contracts, including verbal agreements. That is not to say you should not do your due diligence in documenting verbal changes but as verbal changes are difficult to verify it is wise to make the written contract the solid foundation.
The last part of the indemnity clause is arbitration. As stated earlier, resolving contract issues in court can be very expensive. If going against a company with larger funds or a larger legal department that battle can ruin a small business. It is far easier, faster and cheaper to resolve issues out of court with an arbiter. It is suggested that this section be conspicuous and set in your local area.
Of course it is suggested that if there are any perceived issues that a lawyer be kept on retainer in the event any issues come up. One scenario Mr. Zakrzewski illustrated is when working on large or complicated projects where the stakes are higher. He suggested getting the client to agree to have each other's lawyers haggle over the contracts while you and the client concentrate on the project on hand.
As far as negotiating tips were concerned he suggested you do your best to get your own contract signed first. He is in favor of plain language contracts but states that there are some well established legal terms that should be included. Try to keep each section short. You don't really need a 30 page contract when the same information can be condensed to a few pages.
Always remember that a contract starts with a negotiation. Be clear as to who owns what, who's responsible for what and what the end expectations are. You should enter the negotiation with a clear idea of where you are willing to compromise and where you are not. In other words, pick your battles.
It is also a good practice to put your terms and conditions on estimates and bids. It just supports the language found in a contract and helps refute any claim of ambiguity.
The final note of worth was on the use of digital signatures. He warned that in many cases a digital signature can be very difficult to prove but very easy to cause doubt to its validity. While a contract can be sent electronically, Mr. Zakrzewski recommends that document be printed and then signed. That signed document can be faxed for quick confirmation but the original signature should be delivered back either by hand or via snail mail. Ink on paper signed in front of a witness is much harder to refute.
Hopefully these notes are of use. If for nothing else but to affirm your own efforts. There are a lot of boilerplate contracts out there to use as a guide. There is no one singular way to write a contract. As stated, the principle goal of a contract is to clearly specify expectations of both parties. If you are looking to write your own contract use those boilerplates as a starting point, compile the information, keep what you need, discard what you don't and have it reviewed by a qualified lawyer.
"If you didn't learn something new today, you wasted a day."