A contract is a lengthy and complex document that requires a lot of investment, methodology, and practices (with flaws) to be able to execute it correctly and thus be able to run a stable and successful business.

They are constructed strategically where the parties involved will achieve an objective reciprocally. Contracts are given under the act of good faith (they are human interactions where the sincere intention becomes fair, open, and honest, regardless of the results of the interaction). I recommend that contracts be extensive and detailed, even if anyone says that clients don’t like to read or are intimidated by long papers, as this can guarantee to avoid misinformation and being open to various interpretations.

Why Should I Have One?

• It helps you represent yourself professionally.
• It implements transparency, responsibility, and consistency.
• Invoices alone are not legally enforceable, since they lack consequences. Starting a business without one can end with manipulation and a lack of consent.
• It protects the parties’ rights with protocols and remedies against disputes, miscommunication, and penalties.

What Are They Made Of?

• Exclusive terminologies, depending on the field you operate.
• Clauses containing regulations, penalties, and protocols.
• Confidential information of the parties involved.
• Project scope that contains information about the type of product or service, delivery date, correct final formats, services, and deliverables, among other details.
• Summary of the parties involved between the artist and the client such as the positions or roles they will exercise, payment amounts, responsibilities, name of the project, penalties, etc.

The 4 Important Elements During Business

1. Mutual agreement between the parties in a tangible medium (signatures).
2. Consistent and appropriate use of language and terminologies.
3. There must be an exchange of value, where it is usually monetary.
4. There must be the intention to be a part of the agreement that is legally enforceable.

Just because the client paid a certain amount of money it does not mean that he will have absolute control of the project, much less when he chose the artist for their skills, experiences, and knowledge.

What Vital Parts Should Be Discussed?

• Discussion of the correct formats of the deliverables.
• Medium, programs and or tools that will be used for production.
• Determine payment delivery dates, amount of money or percentages such as surcharges for late payments, grace periods, and/or payment plans (if applicable).
• Types of “deliverables” (final agreed products to be delivered to the client).
• Any preliminary work or pieces that were never chosen as deliverables would remain the property of the artist unless the client is willing to pay for them. The artist still has the final decision.
• Official documents that will be produced during the project such as estimates, invoices, receipts, licenses of use (royalties), design briefs, project scope…

What The Client Should Know When Acquiring A Contract?

• It contains established protocols and rules that must be followed regardless of how much they have paid.
• A percentage is required as an “advance payment” at the beginning of the project to ensure that the client completes all the payments and the artist delivers the agreed final product.
• Any irregularity or incompleteness has a penalty (ex. rushed delivery is not the artist’s responsibility or fault, the client must maintain an organization).
• There are certain expenses that the client must cover by obligation, regardless of what has been established in the contract (travel, accommodation, transportation, licenses, insurance, workshops, etc.). These elements may not be accessible in the first instance to the artist.
• Providing constructive criticism and maintaining constant communication with the artist. Otherwise, the artist can’t be held responsible for the client’s prolonged absence and inconsistent communication. This can create extreme consequences, where the project may be considered an “abandoned project” and be penalized monetarily.
• Canceling the project at the beginning or during the project carries a penalty called a “kill fee” where a percentage is charged for the work in progress.
• The client must deliver everything correctly, completed, organized, and on time to be able to begin the service (it is not the artist’s responsibility to correct spelling errors).
• Extra services that were never part of the signed contract must be charged (ex. speedpaints or printing services).
• Both, the client and the artist are bosses in the project. The client pays for a service (which he is unable to do himself) so that the artist, with his knowledge and experience in the creative field, can develop the product using his techniques and solutions. If the client wanted full creative control of the project, maybe he should’ve done it all himself.
• If the client becomes difficult, the artist can fire him (as a last resort) after having some serious discussions about establishing boundaries, providing new solutions, and giving warnings.

It is very important to avoid creating short contracts since they can lack vital details or clauses and, due to a lack of appropriate terminologies or protocols, lend themselves to empty gaps with interpretations.

Stay tuned for The Importance Of Creating A Contract – Part 2, where I discuss more critical issues and techniques. Don’t forget to bookmark the other post about how to build contracts for Work For Hire, Commission, Licensing of Use and Estimate, Invoice, and Receipt. If you would love to try my contracts, click the link below, they have everything you need with ready, editable templates and free updates via emails.

NOTE: I want to emphasize that this post is for educational purposes, legal information is not the same as legal advice. Therefore, it is recommended that you consult with a lawyer to obtain more professional guidance in the legal field.

Thank You For Reading!

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