10 CONTRACTS: AN INTRODUCTION
Acontract is an agreement creating legally enforceable obligations between two or more parties. The artist is constantly entering into contracts with collectors, dealers, agents, exhibitors, publishers, ad agencies, landlords, and others. While a lawyer should usually be consulted when the artist is given a contract to sign, the artist’s knowledge of the different negotiable points in each contract can assist a lawyer in reaching the contract best suited to the artist’s individual needs. This chapter develops a background of the law relating to contracts in order to make subsequent chapters on specific types of contracts more helpful.
In negotiating contracts, artists will find the following series of books by Tad Crawford very helpful: Business and Legal Forms for Fine Artists, Business and Legal Forms for Illustrators, Business and Legal Forms for Graphic Designers (coauthored with Eva Doman Bruck), Business and Legal Forms for Photographers, and Business and Legal Forms for Crafts. All of these books contain explanations of various contracts, negotiation checklists that can be used even when the other party prepares the contract, and model contracts ready to be used. Published by Allworth Press, the forms in each book are also available on computer disk for ease of modification.
Negotiation Skills
Negotiation is integral to the process of making a contract. The terms of the contract are those reached by the negotiation. A few basic observations will help the artist negotiate successfully.
The purpose of negotiation is not to defeat the other party. Rather, both parties should benefit and feel satisfied that their needs have been met. Prior to beginning any negotiation, the artist should have his or her goals clearly in mind. These goals certainly include money, but reach beyond this to issues of artistic control, authorship credit and other factors that may also have importance for the artist.
Of course, the other party has its goals. The artist should gather as much information as possible about the other party, including its resources and goals. For example, what advances and royalty rates has a publisher given to other artists? What provisions did it strike out of its standard contract? What commission rate has a gallery agreed to with other artists? Did a magazine agree to buy first North American serial rights or insist on more? This kind of information shows what an artist may expect in a negotiation. It also indicates what the other party must have in order to be satisfied with the business arrangement.
It is wise to keep records of both negotiators’ strategies, including preparing written notes on all discussions. This will enable the artist to keep current on the nuances of the negotiation. It will also prepare the way for future negotiations, since the artist may be able to predict the other party’s patterns while avoiding falling into patterns that give the other party an advantage.
Offers should be put in writing. This avoids disputes as to what the offer was. Generally, the first offer is not the best. In this way there is room for give and take in the negotiation. The more time and effort invested in a negotiation, the more both parties will want a successful conclusion by reaching an agreement.
After an agreement is signed, both parties should feel the contract will be mutually beneficial, not that one party or the other won.
The telephone is, of course, one of the chief instruments of negotiation. Since negotiations must be prepared in order to be successful, it follows that no phone call should be made without adequate preparation. The artist should be aware of which party talks the most, since listening often produces more information and therefore better results. The artist should be certain the call will not be interrupted and that no distractions will divert attention from the negotiation. If a call to the artist catches him or her off guard, the best approach is to call back after taking the time to prepare properly.
The artist must be willing to lose a deal in order to negotiate from strength. It is also wise for any negotiator to ask for all he or she wants and something extra that can be sacrificed. Not to make demands because the artist fears rejection can only be self-defeating. If the artist makes the demands of a professional, he or she is far more likely to be treated as a professional.
Governing Laws
Every state has enacted the Uniform Commercial Code, a statute governing the sale of goods. For example, the Uniform Commercial Code applies when an artist contracts to sell a finished work or to create a specific work for a purchaser. The Uniform Commercial Code does not apply, however, when the artist’s services are employed in a project such as the creation of a mural. Such a contract for services is governed by the case law of the various states, although general principles of the case law can be described.
Offer and Acceptance
An offer is a proposal to enter into a contract. It is a promise inviting acceptance in the form of a return promise or, less usually, an acceptance by performance based on the terms of the offer. If a collector says to an artist, “I want to buy your painting, Doves of Peace, for $2,500,” an offer has been made. The collector has promised in definite terms that can be accepted by the artist’s return promise to sell the painting.
If the collector says, “This painting would look wonderful in my office,” or, “This painting will be worth a fortune soon,” or, “I want to borrow this painting to try for a few weeks,” no offers have been made. If the collector says, “You paint my portrait and we’ll agree later about the price,” or, “You paint my portrait and I’ll pay you as I see fit,” no offers have been made because a material term, the price, has been omitted.
However, if the collector says, “Paint my portrait and I will pay you $2,500 if satisfied,” a valid offer has been made. The artist should beware of such an offer, because the collector may be able to reject the finished portrait. The courts generally rule that a satisfaction clause means that a dissatisfied collector may reject the work, even if the collector reasonably should have been satisfied. But the artist certainly does not want to deal with vagueness of this nature and should either avoid satisfaction clauses or require step-by-step approval from the collector, as shown in the Commission Agreement on pages 121–126.
The exhibition of a painting with a price is not an offer. The reason for this is that advertising to the public at large does not create an offer. If a collector is willing to meet the asking price, it is the collector who makes an offer that the artist may then accept or refuse.
The person making an offer can usually revoke the offer at any time prior to acceptance. Another way in which an offer can be terminated is by limiting the time for acceptance. An example of this would be, “I will purchase your painting for $2,500, if you will sell it to me within the next ten days.” This offer would terminate at the end of ten days. If no such time limit is set, the assumption is made that the offer ends after a reasonable amount of time has passed. An offer is also terminated by a counteroffer. For example, if the collector offers $2,500 for a painting and the artist demands $5,000, the original offer of $2,500 is no longer effective.
Acceptance is usually accomplished by agreeing to the offer. If the collector offers to pay $2,500 for a portrait, the artist can accept by stating, “I agree to paint your portrait for $2,500.” The less usual method of acceptance would be by conduct indicating acceptance to the offer. The artist could simply begin painting the portrait, which would be implied acceptance of the collector’s offer. The best way, however, is to accept by giving a promise in return instead of merely performing according to the terms of the offer.
The end result of the process of offer and acceptance is a meeting of the minds, a mutual understanding between the parties to the contract.
Every contract, to be valid, must be based on consideration, which requires each party to give something of value to the other. The consideration each party to a contract receives is what induces entry into the contract. When the collector promises to pay $2,500 for a portrait, which the artist promises to paint, each party has received value from the other. The consideration must be bargained for at the time of entry into the contract. If a collector says, “I’m enjoying my portrait you painted so much, I’m going to pay you an extra $2,500 even though I don’t have to,” the collector is not obliged to pay. The artist has already painted the portrait and been paid in full, so the promise to pay an additional $2,500 is not supported by consideration.
The one situation in which consideration is not required occurs when a person relies on a promise in such a way that the promise must be enforced to avoid injustice. If a collector makes a promise that one reasonably should know an artist will rely on, such as offering $2,500 as a gift for the artist to buy art supplies, the collector cannot refuse to pay the money after the artist has in fact relied on the promise and purchased the supplies.
Competency of the Parties
The law will not enforce a contract if the parties are not competent. The rationale is that there can be no meeting of the minds or mutual understanding in such a situation. A contract entered into by an insane person is not enforceable. Similarly, contracts entered into by minors will, depending on the law of the specific state, be either unenforceable or enforceable only at the choice of the minor. The age of majority has traditionally been twenty-one, but many states such as New York and California have now lowered the age of majority to eighteen years of age.
Legality of Purpose
A contract for a purpose that is illegal or against public policy is not binding. Thus, a contract to smuggle pre-Columbian art into the United States would not be valid because a federal statute prohibits such importation without the permission of the country where the art is found. Similarly, a contract between an unethical art dealer and an art forger to create and sell old masters could not be enforced by either party in court.
Written and Oral Contracts
A common fallacy is that all contracts must be written to be enforced. While this is not always true, it is certainly wise to insist on having contracts in writing. The terms of a contract may come into dispute several years after the creation of the contract. At that time, reliance on memory to provide the terms of the contract can leave much to be desired, especially if no witnesses were present and the parties disagree as to what was said.
A written contract need not even be a formal document. An exchange of letters can create a binding contract. Often a letter of agreement is signed by one party, and the party completes the contract by also signing at the bottom of the letter beneath the words “Agreed to.” Both parties may not have signed an agreement, but a memorandum signed by the party against whom enforcement is sought can be found to constitute a valid contract. Even when the parties merely show, from their conduct, an intention to agree, a contract—called an implied contract—can come into existence. But when part of a contract is in writing, the artist should not rely on an oral agreement to the effect that compliance with all the written provisions will not be insisted upon. Courts are reluctant to allow oral evidence to vary the terms of a written contract, except in cases in which the written contract is procured by fraud or under mistake, or is too indefinite to be understood without the additional oral statements.
The Uniform Commercial Code also requires written evidence whenever goods of a value of more than $500 are to be sold. This simple rule, however, is subject to several important exceptions. If the contract provides for goods to be specially created for purchasers—photographs of a specific place, for example—an oral contract for more than $500 will be valid, if the artist has made a substantial start on the work. If the artist receives and accepts payment or if the purchaser receives and accepts the work, the oral contract will be valid despite being for more than $500. Also, merchants who have made an oral contract for more than $500 will have a valid contract if one merchant then writes a note binding against that merchant and the other merchant doesn’t give written objection to the contents of the note within ten days of receipt. Merchant is a special term under the Uniform Commercial Code, defined to mean a person who deals in goods or practices involved in the transaction. A gallery or publisher would be a merchant, and at least some artists may also come within the definition.
There are provisions, however, in statutes other than the Uniform Commercial Code that also require certain contracts to be in writing. For example, the original Statute of Frauds enacted in 1677 in England required contracts that could not be performed within one year to be in writing. This is still the law in almost every state. Unlike the Uniform Commercial Code, which only requires evidence for sales of goods, this provision applies to contracts for services as well and requires that the writing contain all of the essential terms of the contract. If an artist agrees to sell a collector two paintings each year for three years at $200 per painting, the contract cannot be performed within one year and must be in writing to be valid. Similarly for services, if a muralist is hired by a church to paint a mural during the next fifteen months, that contract will take longer than a year to perform and must be in writing. If completion of the mural were only to take eleven months but the church’s payments would be over a two-year period, the contract would again not be performable within one year and would have to be in writing to be valid.
The wisest course is to use only written contracts, but, particularly if the contract is for the sale of goods worth more than $500 or will take more than one year to perform, the artist should generally insist on a written contract.
What about the sale of reproduction rights as opposed to the sale of physical art or a contract for services? As mentioned in the discussion of copyright, the copyright law requires that any transfer of a copyright or an exclusive right in a copyright must be evidenced by a writing. While this would cover many of an artist’s transactions, it does not apply to nonexclusive licenses. It also would not apply to literary property that might not be copyrightable—for example, an idea. However, the Uniform Commercial Code might still apply, requiring written evidence—indicating price and subject matter and signed by the party against whom enforcement is sought—of a contract for the sale of intangible personal property if the amount being paid exceeds $5,000.
Warranties
Caveat emptor—let the buyer beware—expressed the traditional attitude of the courts toward the protection of purchasers of goods. More and more, especially under the Uniform Commercial Code, warranties are created with contracts of sale for the purchaser’s protection. Warranties can be created orally, even if the contract must be written, and can be made during negotiations, when entering into a contract, or, in some cases, after the contract is effective.
One implied warranty guarantees that the seller—for example, an artist—has title or the right to convey title in the artwork to the purchaser. Another implied warranty is that the artwork will be fit for the particular purpose for which sold, if the artist is aware of the particular purpose and the purchaser relies on the artist’s skill or judgment in furnishing the work. If, for example, a sculpture, particularly purchased for a fountain, cracked because of the effect of water on the materials composing the sculpture, this warranty would be breached. This warranty would not apply when goods are put to a customary use, presumably including most forms of exhibition in the case of artworks.
An express warranty is created when the artist asserts either facts or promises relating to the work or describes the work in such a way that the purchaser relies on the facts, promises, or description as a basis for making the purchase. Describing the work as being constructed of certain materials, for example, would be an express warranty if the purchaser considered that a basis for purchasing the work. However, sales talk or opinions as to the value or merit of the work by the artist will not create warranties. If, for example, the artist speculates that the work will be worth a fortune in a few years, the purchaser cannot rely upon such an opinion and no warranty is created.
One express warranty that the artist may wish to make is that a work is either unique (one of a kind) or original (one of a limited number). This is particularly true where the work could be easily duplicated, such as photographs, found objects, collages, much pop art, and the manufactured geometric shapes created by some of the minimal artists. While the beauty of the work would not seem diminished by identical pieces, the value for most collectors would be greatly impaired. Painters benefit from the myth that all paintings are unique, but artists whose work can be duplicated must inspire faith in the purchaser that a unique work is unique and that an original work exists in no more than a given number of copies. For example, a photographic work might exist in color and black and white, as well as having versions with a greater or smaller number of photographs. Although the artist and the purchaser may differ as to what uniqueness is in an artwork, the artist can avoid the purchaser’s having any cause for complaint by placing a warranty like the following on the back of the work:
Model Warranty
This art work, titled Doves of Peace, and briefly described as doves flying against a background of clouds, is an original work consisting of six numbered panels of thirty-by-forty inches in dimension with no more than three other identical originals and no more than four other originals in black and white consisting of three panels of the dimension of fifteen-by-twenty inches.
Date:___________________
Artist:______________________
The artist would place this notice on the back of each panel, but sign only panel one to avoid the possibility of the work being split up. The notice can easily be adapted to suit the details of different artworks. The purchaser will be pleased by this reassurance as to the scarcity of the work, and the artist will benefit from the increased trust created by such a demonstration of integrity. If the work were unique, the notice could simply be shortened to state the work’s uniqueness. The artist who creates one work with several different parts, such as a sculpture in three separate pieces, might want the purchaser to expressly warrant that the pieces would always be exhibited and sold as a single work.
A fuller discussion of unique art and limited editions appears in chapter 13.
Assignments of Contracts
Sometimes one party to a contract can substitute another person to take over the burdens or rewards of the contract. This is not true, however, for contracts based upon the special skills of one party to the contract. When such personal ability is crucial to the contract—for example, in a contract for the creation of an artwork—the artist may not delegate the contractual duties for performance by another artist. But even though the artist is unable to delegate the performance of the artist’s duties, the artist will still be able to assign to another person the artist’s right to receive money due or to become due under the contract. A well-drafted contract will state the intention of the parties as to the assignment of rights or delegation of duties under the contract.
Nonperformance Excused
There are a variety of situations in which the artist’s failure to perform contractual obligations will be excused. The most obvious case is that the death of the artist is not a breach of contract that would permit a lawsuit against the artist’s estate. Similarly, because the artist’s work is personal, unforeseen disabling physical or mental illness will excuse performance by the artist. Also, payment by the party contracting with the artist will be excused if the continued existence of a particular person is necessary to the contract being performed—for example, if a portrait was commissioned but the person to be portrayed died prior to commencement of the work.
Grounds other than the personal nature of the artist’s work will also permit the artist to refuse to perform. If the other party waives the artist’s performance or if both parties have agreed to rescind the contract, no performance will be necessary. If the artist is prevented by the other party from performing, perhaps by a person refusing to sit for a portrait, performance will be excused and the artist will have an action for breach of contract. Similarly, no performance is required when performance would be impossible, as in the case of a muralist who cannot paint a mural because the building has burned. Also, performance is excused if it would be illegal due to a law passed after the parties entered into the contract.
Remedies for Breach of Contract
A party who refuses to perform a contract can be liable for damages. There must, however, be some detriment or loss caused by a breach of contract before the recovery of damages will be allowed. The damages will generally be the amount of the reasonably foreseeable losses (including out-of-pocket costs and lost profits) caused by the breach. Also, the injured party must usually take steps to minimize damages.
The artist may wonder what happens when performance under a contract is either nearly completed or is completed but varies slightly from what was agreed on. Unless the contract specifies that strict compliance is necessary if the artist is to be paid for performing pursuant to the contract, the artist will usually be able to recover the contract price less the costs necessary to pay for the defects in performance. For example, when an artist created stained-glass windows in substantial compliance with the designs except that less light came through the windows than one of the parties had apparently intended, the court stated:
Where an artist is directed to produce a work of art in accordance with an approved design, the details of which are left to the artist, and the artist executes his commission in a substantial and satisfactory way, the mere fact that, when completed, it lacks some element of utility desired by the buyer and not specifically contracted for, constitutes no breach of the artist’s contract (Wagner-Larshield Co. v. Fairview Mausoleum Co., 190 Wis. 357, 208 N.W. 241).
The question, however, of what constitutes substantial performance is an area in which litigation is likely. The reason for this is another rule: that part performance under a contract will not allow recovery based on the price specified in the contract for full performance. Moreover, such part performance will not, in most states, even be paid for on the basis of reasonable value unless the part performance is of substantial benefit to the other party who accepts and retains the benefits of such performance. This rule would not apply, of course, if one party prevented the other from performing. Also, if one part of a contract can be separated from another part, such as a number of payments for a number of different sets of photographs, recovery will usually be permitted for the partial contract price specified for each partial performance.
In some situations, damages may be adequate to compensate for the loss caused by a breach of contract. If a famous artist is retained to paint a portrait of unique emotional value, the artist’s refusal to honor the contract might be difficult to value in money damages. But since involuntary servitude is prohibited, the artist cannot be forced to create the portrait. On the other hand, if a painting with unique value is already in existence, a purchaser might well be able to require specific performance of a contract of sale. This would mean that a court would order the seller, whether an artist or a dealer or a collector, to transfer to the purchaser the specific painting for which the purchaser had contracted. Specific performance may be used, however, only when the payment of money would not be sufficient remedy.
The Dangers of Disks
An artist described a troubling experience in which the allocation of blame and financial loss proved quite difficult. This episode illustrates both how valuable it would have been to have a written contract and how important it is to be flexible in trying to achieve a fair result when a problem arises. An old and valued client had asked to have a corporate brochure designed. In addition, the client asked that the artist suggest a printer for the 200,000 copies needed of this colorful brochure. After giving approvals at a variety of stages, the client agreed that the brochure was ready to be printed. At this point, the client had seen a 300-dpi printout of the textual portions of the brochure. This printout had been proofed and found to be accurate.
The artist recommended a printer with whom the artist had an established and very positive relationship. As a final step before printing, the artist sent a disk for the job to a prepress house and received back film and a blue line. The blue line was sent to the client for a final check. After the client approved the blue line, the artist went on press to ensure that the brochures would be printed to the highest possible standard. In fact, the client was delighted with the printing.
To this point, the job hardly sounds like the nightmare that it soon became. The artist and the printer had performed at levels pleasing to the client and the 200,000 brochures were ready to be delivered. However, when the client reviewed the sample copies of the brochures that had been sent to him from the print run, the art director was shocked to discover a typographical error. A “t” had been omitted from “this,” leaving instead the word “his” and ruining the sense of the sentence. The client could not live with this kind of error in its brochure, so the 200,000 brochures would have to be discarded.
Before trying to decide who should bear the financial burden, we have to understand how this could have happened at all. The client approved the laser printout and the blue line. Unfortunately, the blue line did not conform to the laser printout. The laser printout had the correct word—“this”—while the blue line had the incorrect word—“his.”
The artist could not understand why the disk given to the prepress house contained that erroneous change, but it did. Perhaps the artist was to blame or perhaps the fault belonged to the prepress house. To this day, the artist cannot explain how the error was introduced. In any event, the artist did not check the blue line against the laser printout to compare for accuracy. Should the artist have proofed the text of the blue line—or is such checking the task of the client?
The client had not checked the blue line against the laser printout. How easy it is to rely on the mechanical nature of the process. If the disk is correct, how can anything on it change as the image on the computer screen or printout is simply moved by the prepress house to higher dpi output or film? Unfortunately, such a change had occurred.
The question of who would bear the loss turned, to a large extent, on who would be blamed for what had gone wrong. The artist had to admit that in all likelihood the artist was responsible for the mistake (although it could have been a software flaw for which the software company was responsible, or a problem at the prepress house). If the client had proofed the blue lines and found the mistake, the artist would have had to correct the error without any charge.
However, the client had the responsibility to proof the blue lines. Failing to do this, the client presumably should take responsibility for any errors that the client did not correct. This would mean that the client would have to bear the full loss from the 200,000 brochures that could not be used. This might be a satisfactory legal result, but would probably end the artist’s long-term relationship with the client and thus would be a complete failure in terms of customer relations.
Another ominous possibility would be for the client to refuse to pay the printer, thus jeopardizing the artist’s relationship with the printer. While the printer had certainly done nothing wrong, the artist had referred the client to the printer. If the client wished to force the printer to sue and then, in turn, sue the artist, the waste of time and legal fees could do great damage to all parties.
Fortunately, the parties made the best of a bad situation. The client agreed to pay for the first printing and for the cost of reprinting a corrected version. The printer agreed to take no profit on the reprint and the artist agreed to waive the fee for the job.
All of the parties suffered, and it can certainly be argued that the final arrangement was not completely fair. Nonetheless, it is difficult to say what would be fairer. If the artist takes the position that the job was done correctly and the client is solely at fault for failing to proof, the artist will probably never receive another job from the client. Also, the artist clearly did make a mistake, but a mistake that the client should have seen. However, at least there was a cure, unlike the damage that can sometimes be caused by a virus being conveyed on a disk to a client’s computer system.
Until we work with computers, we imagine them to be infallible. But anyone who has experienced the crash of a hard drive—or lost data in other ways that seem to fall on a scale ranging from unjust to cruel—knows how vulnerable these systems can be. One constant danger is the introduction of a virus into a healthy system. If that system does not have anti-virus safeguards, it may be damaged or completely destroyed.
If an artist is providing a disk to a client, what is the artist’s responsibility to make certain that the disk contains no virus? Or, if an artist gives a disk containing a virus to a client, what will be the artist’s liability if the client’s system crashes and data is lost? In a less usual case, the client might supply the artist with a disk containing a virus. What liability would the client then have to the artist? Though the direct transmission of files and content over the Internet alleviates these problems somewhat, the possibility of inadvertently passing viruses between clients, artists, and printers remains a very real possibility.
The risk of liability suggests that artists may want to have any clients receiving a disk or other “digitized” content sign a waiver of the artist’s liability. Such a waiver might recite that: “The Client accepts the risk of and shall hold the Artist harmless from and against any loss, expense, or damage occasioned by any claim, demand, suit, or recovery against the Artist arising out of viruses or other defects contained in computer disks or other electronically transmitted data supplied by the Artist to the Client or to other parties at the Client’s request.”
Viruses and the other ailments that—often mysteriously—afflict computers suggest the need for innovations in contracts and ethical practices as well as in the design of chips and programs. Realizing that these sophisticated servants are vulnerable and taking appropriate business precautions is certainly a step in the right direction.
Statutes of Limitation
A statute of limitation sets forth the time within which an injured party must bring suit to have the injury remedied. After the limitation period has passed, no lawsuit can be maintained. The limitation period for actions based on contracts for the sale of goods under the Uniform Commercial Code is four years from the time of breach. The limitation period for actions based on breach of contract for services varies from state to state (for example, six years in New York). The limitation period in many states is longer for written contracts than for contracts that are oral, partly in writing, or implied. The artist contemplating legal action is well advised to seek redress promptly so that no question will arise regarding statutes of limitation.
Protection of Ideas
Ideas are denied copyright protection but can still be protected by contract. The idea may be a format, a campaign, a style, a game, and so on. The problem comes upon submission of the idea, since the artist must feel assured of payment if the idea is used.
At the outset, it should be noted that many potential purchasers of ideas will have release forms that must be signed by persons submitting ideas before any consideration will be given to the submission. Such release forms bar any claims by the artist based upon a subsequent use of similar material by the potential purchaser. In addition, if the artist should be able to sue and recover despite the release form, the maximum reasonable value of the material is stipulated (for example, $200) and the total recovery possible is limited to such an amount. These provisions are accompanied by a recital from the artist, such as “I recognize that there is always a likelihood that this material may be identical with, like, or competitive to material that has or may come to you from other sources. Identity or similarity of material in the past has given rise to claims and disputes between various parties and has caused misunderstandings. You have advised me that you will refuse to examine or consider material unless you obtain for yourself complete protection from me against the possibility of any such claims.” The artist can expect to be bound by such provisions, so caution should be exercised before signing a release form in order to submit an idea or manuscript.
The artist will be best served by an express contract providing for payment in the event the purchaser does use the idea. This is likely to be difficult to obtain, but the artist who simply volunteers an idea is basically at the mercy of the other party. The express contract should specify the consideration and other details of the transaction. If a standard price is paid for such material, it should be stated. Otherwise, a reasonable standard of value should be required as compensation. The submission agreement need not be complex, although it must suit the individual circumstances. For example, the artist might use a brief letter:
Model Idea Submission Letter
Dear ___________:
I understand it is your practice to entertain or receive ideas or suggestions for (specify the market). I have developed such an (indicate what will be submitted) for submission and would like to disclose this to you. I understand that if you use it you will pay me a reasonable compensation based on current industry standards. Please advise me if I should send this to you.
Sincerely yours,
Jane Artist
It is not uncommon, however, for the artist to disclose ideas without having thought to obtain an express contract. Recovery may still be possible under a variety of doctrines, which will only be mentioned here: implied contract (which occurs when the parties indicate by their conduct that a contract exists), confidential relationships (applicable to some cases in which the party with less bargaining power trusts in the other party’s good faith and discloses the idea), and quasi-contract (in which the law implies an obligation that the party receiving the idea pay for the benefits conferred). Especially for a confidential relationship or quasi-contract, however, the courts may require that the idea be concrete, elaborated, or novel before recovery will be allowed. A written, express contract is by far the best way for an artist to protect an idea.
Lecture Agreements
Artists are frequently invited to lecture at schools and universities. The rewards of such appearances are both psychic and financial. However, the artist does run the risk that the host organization may not be set up to pay fees quickly. This can mean that expenses and time are invested by the artist, who must then wait before any compensation is received. A good way to deal with this problem is by having a written agreement that specifies when payment will be made, as well as detailing the exact nature of services the artist is to perform and what other reimbursements, such as for travel and other expenses, the artist will receive. An alternative to breaking down the expenses is to provide that the school will be responsible for all expenses, with a stipulated amount paid in advance and the balance paid while the artist is at the school or as soon as the artist can send in a statement detailing all the expenses.
If artwork is to accompany the artist’s visit, insurance and risk of loss will also have to be resolved. And the artist may wish to retain the right to copyrights in any recordings or transcripts that are made in the course of the visit.
A relatively informal contract is shown here in the form of a letter from the artist to the university, which the university is to countersign and return a copy of to the artist. In fact, the exchange of letters between the artist and university can also serve as a contract as long as the terms of their understanding are clearly delineated.
A number of legal frameworks ensure that electronic records of contract formation are the legal equivalent of traditional paper documents. The Uniform Electronic Transactions Act (UETA) is a form of “model legislation” that holds electronic communications to be the legal equivalent of paper records. The UETA is a form of “model” legislation enacted by every state, with the exception of Georgia, Illinois, New York, and Washington. Yet even these four states are covered by the federal Electronic Signatures in Global and National Commerce Act, or E-SIGN. (15 U.S.C. § 7001).
Both E-SIGN and the UETA guarantee that any electronic communication bearing an electronic signature has the same legal effect as a hand-signed, physical document. Signatures are broadly defined, and may bind a party if they adequately indicate the party’s intent to be bound by a promise. Typing one’s name at the end of an e-mail, or leaving a voicemail message, may constitute an electronic signature. Indeed, even “unsigned” communications can give rise to a binding agreement. The critical element is “the intention to execute or adopt the sound or symbol or process for the purpose of signing the related record.” This means that the simple act of clicking on a box that designates agreement to the terms of an electronic agreement is a valid signing.
Both laws also ensure that no electronic writing can be denied legal effect solely on account of its “electronic” character.