What Should Go Into a Contract?
So what should go in a contract? So the first thing you wanna make sure is in there are project specifics. What you'll be delivering, we often call those your deliverables, okay? The number of illustrations or design elements, or photographs if you're a photographer. Rounds of changes or edits. The size and dimension of the work. The format in which it needs to be delivered. We talked about format earlier, so just getting this in writing so not at the last minute, they're like, well, actually, we needed it to be in 25 layers in this particular program, and you didn't know that. That's something that you wanna know upfront. Who's responsible for finding or providing assets. So this isn't as true... It's sometimes true. So if you're an illustrator, and you are being asked to illustrate a famous person, you have to get legal permission if the photograph is not in the public domain to illustrate that portrait if you're gonna use it for commercial purposes. So are you responsible for findin...
g and getting permission for the photo? Are they responsible? Anytime you're using a photograph. Or recently, I did a cover of a magazine where I was illustrating over a photograph. They got the photograph and got rights to the photograph. I wasn't responsible for that, but making sure you're clear on that anytime there are other assets like product shots or photography that are gonna be part of your work. How the client intends to use the work. What they're going to use it on. Also, you wanna get clear on the terms of payment. So how much you're gonna be paid for the job and when the payment is due. So sometimes with really big projects, the payments are divided up over a period of the fees. So if a job is a six month project or even a project that's gonna take a couple of months, sometimes so that you don't have to wait until the end to get paid your fee, they'll pay you half of it halfway through. So you wanna make sure that that's stipulated so that you can remind them to pay you when it's halfway time or once you've turned in a certain amount of work. So that's all there. And then how long they have to pay you. So typical is net 30. So net 30 means they have 30 days from the day you invoice them to write you check or send you money. Net 30 is pretty normal. I have worked with clients who say, we do net 45 or net 60. So that is something you can negotiate. I usually do with the client. If they really need two months to pay me, then that's okay, as long as it's written down. It should also specify if there's any penalties for not paying on time. So I have a rule that if you don't pay me within 45 days, then there's a 10% fee or something. I have never ever had to issue a complaint about somebody not paying on time. I've been really lucky in that way. But you wanna lay all of that out, especially, again, if you're working with a small business or a business that doesn't have a productive accounting department. Yeah?
I have a question about late fees because I put that into my contract, and I've had to deal with a few times where I didn't get the money on time. So if you late fee, do you charge them a daily 10%, and if they don't pay you within 45 days, would you add a 10% of your job every day until they pay you? And at certain point, you would take them to court? What would be your process?
I fortunately never had to go down that road, but I think my contract says something like, it's a 10% for two weeks after the 45 days and then another. So they get a 15-day grace after the net 30, and then there's 10% for every 2 weeks after that and then I think... I mean, I think that's a really good question because ultimately, where does it stop before you take legal action? Have you ever had to take legal action or go that far yourself?
I've threatened clients with legal action, and that made them pay me the late fees, but I've had a few clients who wouldn't pay until I exhausted all communications with them and then I told them I'm sending everything, the contract and everything, to my lawyer. And then they would get scared and pay.
Yeah, well, I guess that's what works then. (laughs) It's like ultimately, I'm gonna take legal action, and that's why those things are there in writing. So it worked for you. So that's painful and uncomfortable, but ultimately, that's... And again, those situations are actually more rare. It's unfortunate that you had to deal with that. I've been doing this for a long time, and I've never had to deal with that situation before, and I think most people don't. You hear about it when it happens because people get really upset when they're not paid by a client. And also, I think I've known people to threaten people on social media or to call people out for not paying, and that can sometimes work, too. Public shaming, it's terrible, but it does work. Okay, by default, you own the copyright to your work. By default, it is yours. You made it, you own it. Is it smart to register it with the US Government? Absolutely. Do you have to to own copyright? No. You may give the right to your client to reproduce the work for a specific purpose in your contract, but you still own the copyright. There's one exception to that, which we're gonna talk about shortly. You still own the copyright, you are giving them the right to use it on something, but you still own the original work. No one can reproduce your work without your permission, unless you've already stipulated that right in a contract for a specific purpose. That's what the contract is for. If you do that, the contract should specify how the work can be reproduced, for how long, where, and on what. So make sure that all of those things are covered. There is one exception, and that is Work for Hire, and I'm gonna talk about Work for Hire specifically in a moment. Okay, regarding rights, pay attention to: what kind of rights the client is asking for, where they would like to hold the rights, do they want worldwide rights, just one country, for how long they would like to hold the rights for exactly what purpose, where will the art and designs be used, for a specific product only, for a specific website. Get really clear on this because if the more rights they want, the more you should be paid. And this is another way to negotiate fees and contracts is if they're not willing to pay you very much to make the work, then the fewer rights they should have, technically. This is kind of important for licensing, too, where you're giving away the rights for things to get put onto a product, and then you're making royalties based on, you make a percentage of the sales. So you actually benefit from the right being sold and put on a product because you're making money based off the sale of the product. Credit, so you always want the contract to stipulate how, if at all, you will be credited for the artwork either on the product or the publication. Sometimes, it doesn't make sense for the artist's name to be mentioned, say like, if you did packaging for soap or, maybe in fine print, they'll agree to put your name on there. But a lot of the time, for packaging or advertising, your name doesn't go anywhere on it. Like, you could put it on your social media feed and say, hey, I did this work for Smooth Butter Company, and whatever, people will know you did it because it's recognizably your work, but your name's not gonna go on the product. But a lot of times, your name should go on the thing, especially if it's a magazine illustration or a book cover. So make sure that you're credited. Last night, I was at a bookstore, and I saw a book cover that I thought was stunning, and my first reaction was, who drew this? So I opened up to the front copyright page, I didn't see it there, and I was like, I can't believe this cover illustrator's name is not in the book, and as it turns out, it was on the back cover. But super important because it's part of having your name in the world and part of what you do. So, make sure you're credited. If you can't be credited on the product, like, maybe negotiate with them that they're gonna post about it on social media so that you can be credited, or at the bottom of a web page or whatever. So think about what credit you want and make sure that that's in your contract. Kill fee. So, a kill fee is a fee that you are paid if a job is killed. So, common reasons a job is killed. So, the client changes their direction midstream, maybe you guys down the road, you have a contract, you're working, and then, all of a sudden, the client's like, this isn't working. Or they come up with a different idea, and you're not the right person to execute the new idea. So, it's often not even a personal thing, or it's not like you've screwed up, or anything having to do with you. Sometimes, jobs just get killed midstream, it's happened to me before. So you wanna make sure you get a kill fee, and a kill fee is usually, I think 25 to 50% of what you've negotiated, and just have a line item in your contract that says what the kill fee is. Another reason a job is killed is you can't seem to produce something the client is happy with. Like, it's like, you're working together, it was off to a good start, you got all the direction you needed, but you just can't seem to make it work. And I've been in a situation before where, actually, I was in contract, and I decided that it was better to leave because I felt like I couldn't produce work that the client was happy with, and the client agreed, and I still got the kill fee. So, sometimes, that happens, and you wanna avoid it, but you also wanna be paid for the work that you have put in thus far. Budgets get slashed, you're on a road, and then, management says, oh, we don't have budget for this anymore, pay the illustrator or the designer the kill fee, and we'll kill the job. So, that's a little bit about kill fees. All right, Work for Hire contracts. I promised I would talk about this. So, often, there is a clause or a specific contract that uses the word Work for Hire, and companies are sometimes not upfront about this clause. People have signed Work for Hire contracts and not been aware of it before. So, you wanna take special care to look out for this clause, and if one does exist in a contract, make sure you have it slashed. So, beware. Basically, a Work for Hire contract stipulates that the authorship or creation of the artwork is credited to the client and not to the artist, and that they will own the copyright to the work, not you. They basically... That contract means they have bought the copyright from you. They now own the copyright, you have no rights to that work anymore. Sometimes, this makes sense. Logos, right? You design a logo for somebody. They should be able to put it on everything under the sun. Sometimes, a packaging identity design, so, I think it's more common with graphic designers than with illustrators. Sometimes, it makes sense. However, if you do sign a Work for Hire contract, and you're giving away the rights to your work, you wanna make sure that you are being amply compensated because you are literally being paid to make something and hand it over and never be able to use it again or do anything with it again. And again, sometimes, that makes sense. The client, in a Work for Hire situation, can reproduce the work in as many ways as they would like forever, and you will not be compensated further after the rights are sold. So, make sure you feel amply compensated if you ever are to sign a Work for Hire contract.