Tuesday, March 18, 2008

The Commission Contract Part II: Costs & Copyright Law

It seems I have joined everyone else with getting sick. My whole family has been sick and some of us twice! So far two versions of this year's flu strains have made their way through my house, hopefully the third will think the first two did us in enough and leave us alone. At least, for the next few moments, I can actually think clearly enough to get this done.

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Continuing on with the Commission contract, we now find ourselves at the most complicated part of the contract - costs, and the most important part - copyright information. I have tried to simplify everything in this article as much as possible, but some parts may still seem a bit difficult to grasp. If you have any questions, please feel free to contact me or comment and I will try to respond as soon and as clearly as possible. I understand that this all seems rather dry, but it is critical information to know if you plan on doing commissions, so please hang with me here!

It would probably be much easier to understand this information if you first refer back to The Commission Contract - Part I, just to brush up with where we are on the subject and where we have already been.

C. Costs

1. Tax: I am required to charge state taxes on any commission I have when the client resides in North Carolina, so I write down this amount first.

2. Portrait Costs: I add up all of the costs in section B and write it down. This is the total price of the commissioned portrait, which included matting, but does not include framing.

3. Shipping & Handling: I add shipping & handling costs, if any. (If the client is within driving distance to me, I personally deliver the portrait to them at no cost).

4. Total Price: I calculate the total price of the portrait by adding together #’s 1, 2, and 3 from above. Matting is always included in the total price, but framing is extra.

5. Down Payment: I write down the amount of the down payment the client wants to make, a minimum of which is a $75.00 non-refundable deposit. This down payment guarantees the total price in the contract and holds the client’s place in the calendar.

D. Payment Plans
This is where the client chooses which payment plan he or she wants. It generally takes me at least two months to finish a portrait (usually more), depending on the size and complexity, so I allow the client to make monthly payments on their commission. This is much easier on the client, which in my case, generally turns out to be a hard working middle/working class person with a family. It also helps me to get some commissions I would never be able to get if I asked for total payment up front or at the least, all at once when the portrait is completed.

I have two payment plans, but I am also flexible. If I know a portrait is going to take longer, I allow the client to make more payments. As long as the portrait is completely paid for before I deliver the portrait, I am happy. I never deliver a portrait and leave it at my client’s house without first receiving the final payment.

Payment Plan A: Two payments. A first partial payment, which usually is 50% of the entire commission. The first payment is made in the down payment stage when the contract is signed. The second payment is made when I deliver the portrait to the client (sometimes the client has requested to make the final payment earlier, which is, of course, also acceptable). I clearly write out how much each payment will be for, and I spell out at what point the payments will be made.

Payment Plan B: Three Payments (mostly for commissions over $300.00). A first partial payment, which usually is 34% of the entire commission. A second partial payment of 33% is made at the halfway point. The third and final payment of 33% is made at the completion and delivery of the portrait. Again, I specify the exact amounts in the contract and spell out at what point the payments are to be made, including dates.

Additional Info: Lastly, I include a little blurb that describes the portrait process, including at what point they are to sign off of the work, meaning that no additional changes may be made from that point that will require a major reworking of the painting. If such a reworking is requested, the fee that will be charged for the extra work a rate of $50.00 per hour. This is not greed on my part. It is simply to strongly discourage any major changes to be made beyond a certain point in the painting process. I make sure when I am going over the contract with the client, I emphasis this part so that they completely understand it. I explain how difficult it is to make such changes and that sometimes if such a change is requested it would require me to completely start over and all the time already put into the painting is gone. Just a little note here; I send the client updates of the portrait as I progress and they let me know if I have gone a stray anywhere so that I may make any necessary corrections right away. This should avoid any problems later on, and so far I have never had anyone ask for major changes and no one has ever gotten angry at me about the fees.

Insufficient Fees: This MUST be written into the contract if you want to charge a fee for a check that bounces due to insufficient fees or for any reason that the bank returns the check and refuses to cash it. If you do not include this in your contract, you cannot charge this fee!! I write in bolded lettering that I charge a $25.00 fee for any check that is returned by the bank and the bank refuses to cover the check for whatever reason (this also includes stop payments). That fee gets added to the total commission price to be paid before delivery of the portrait. Also, if I run in this problem before the final payment has been made, then I will with hold portrait delivery until the check clears the bank completely. Only when the bank has given me clearance will I deliver the portrait.

For artists who are from other countries, please check on the laws of your country on this matter so you can conform to them.

E. Copyright Information
Whereas the cost section was the most complicated part, the copyright information is the most important part of the contract!

Always, ALWAYS (and I cannot emphasize this enough) include copyright information in your contract. Make sure you read it to the client and that they understand it completely! This section will be different for people in different countries because the laws are not all the same. Basically, I make sure the client understands that ALL copyrights of the original portrait, the reference photos used (if such photos were taken by me) remain with the artist. The client is not to reproduce the commissioned portrait or sell any reproductions of the portrait. I state that I agree not to reproduce or publish any commission in any derogatory manner whatsoever.

Copyright Specifics:
(All quotes in this section have been taken from the U.S Supreme Court case of Community for Non-Violence v. Reid, 490 U.S. 730 (1989). I include citations from the case and the location from where the quotes were taken so you may look them up yourself).

According to the decision of the U.S. Supreme Court in the case of Community for Non-Violence v. Reid, 490 U.S. 730 (1989),” an artist commissioned to produce artwork is considered an Independent Contractor, rather than that of an employee as is the case of “work for hire.” According to the decision, factors that help define the relationship as that of an Independent Contractor are: everything written inside the parentheses are my own inclusions and not from the quote)

  1. “the skill required,
  2. the source of instrumentalities and tools, (does the artist supply his own tools, such as pencils, pastels, paints, drawing board, paper, boards, etc., or does the hiring party directly supply them)
  3. the location of the work, (does the artist use his own studio or home to work in or does the hiring party provide the workspace)
  4. the duration of the relationship between the parties,
  5. whether or not the hiring party has the right to assign additional projects to the hired party,
  6. the extent of the hired party’s discretion over when and how long to work, (does the artist set his own work hours)
  7. the method of payment, (does the hiring party give the artist a "paycheck" with taxes taken out)
  8. the hired party’s role in hiring and paying assistants, (does the hiring party have any say over whether or not the artist can hire additional help to work on the commission)
  9. whether the work is part of the regular business of the hiring party, (if the artist works for a company and created the artwork as a part of his job for that employer, or created the piece while working at his job, then the employer could claim copyright of the artwork)
  10. the provision of employee benefits, (does the hiring party provide insurance benefits, vacation, and sick leave)
  11. and the tax treatment of the hired party.” (page 7, section B, paragraphs 1 & 2)

In addition, "section 101 of the 1976 Act provides that a work is for hire under two sets of circumstances:

  1. a work prepared by an employee within the scope of his or her employment; or
  2. a work specially ordered or commissioned for use as a
    1. contribution to a collective work,
    2. as part of a motion picture or other audiovisual,
    3. as a translation,
    4. as a supplementary work,
    5. as a compilation,
    6. as an instrumental text,
    7. as a test,
    8. as answer material for a test,
    9. as an atlas.” (page 3, section II, part 2)

Thus, a sole artist working alone, who is commissioned to produce a portrait does not fall under the definition of “work for hire” and is not considered an employee of the hiring party so long as the above conditions are met. Therefore, copyright is NOT automatically assigned to the hiring party, however, Joint Ownership of the copyright could be assigned to both the artist and the hiring party if the hiring party and the artist prepared the work “with the intention that their contributions be merged in inseparable or interdependent parts of a unitary whole.” (page 7, section B, paragraph 5)

Fortunately, there is a way for the artist to retain sole copyrights to his/her artwork. The Copyright Act of 1976 allows the artist to retain the copyright IF there is a contract signed by both parties stating that the copyright will be retained solely by the artist.

Therefore, ALWAYS add into your contract that the copyright of the original artwork and of any reference photographs taken by the artist for the artist to use in creating the commissioned artwork, remain solely with the artist. However, make the client comfortable by also including a blurb that the artist agrees not to reproduce any commissioned artwork in any derogatory manner whatsoever, and that any transfer of the copyright from the artist to another individual or company/organization must be in writing expressly identifying what rights are being transferred and for what purpose.

The above should protect you in an American court of law. If you live outside of the U.S. & its territories, you need to research your own country’s copyright laws.

Final Bits:

At the end of the contract I have a place for the signatures of both the client and myself, along with a place for the date, and I make sure the client’s name is printed as well as signed.

You will note that in numerous places I mention that I read something in the contract to the client. Well, I actually read the entire contract not just parts of it. I have found that most people do not bother to read the whole thing, even though it is only two pages long and I have simplified it as much as possible. The details outlined in the contract are extremely important and if you want to avoid trouble in the future you had better make sure they know every little bit of it! I explain to them how important it is and that I want to be able to answer any questions they may have. So far I have never had anyone act like I was insulting their intelligence by reading it to them.

Other Tips: Here are some final tips for you.

This is a business contract and a serious matter, even if it is between you and a friend, co-worker, or family member. It not only protects you from a dishonest client, but it also protects the client from YOU. However, if you want your client to take this seriously, you need to dress and act the part.

  • You are a business man or woman – look the part! No, just because you are an artist does not mean you can dress sloppy. You don’t have to wear a suit, goodness knows I never have. But go dressed for the part. If I am doing a photo shoot of the subject, I generally wear black dungarees with a nice button down shirt tucked in and don’t forget the belt (if your pants have belt loops). Some shirts are made to be worn outside of the pants; just make sure it does not look sloppy. However, don’t wear a top that would be difficult to clean if it becomes dirty. Remember, you are working with animals, children, and adults, accidents do and will happen!
  • Have your hair neatly brushed and out of your way. If your hair is long enough to get in your eyes at all, pin it up, put it in a ponytail, or put a barrette in it. Nothing is more distracting or frustrating to getting a job done than having to keep your windblown hair out of the way (both from your eyes as well as the camera lens).
  • Be sure to carry on in a business like manner. That doesn’t mean a boring, dry, ho-hum manner. You can laugh, play with the subject, and have a good time because if you don’t your subject and client surely will not. But do not get carried away or say anything questionable, distasteful, or inappropriate.
  • In addition, remember that anything that is said in front of you by your client and/or their friends or family can be considered confidential. Be very careful of the stories you tell about your clients and your experiences in doing commissions. Ask yourself that, if your clients read what you write or hear what you say, would they be hurt, embarrassed, or angry or would YOU feel that way?? If the answer is yes, don't say or write it. Remember, people aren't always thinking when they speak, and your client's friends and family don't expect you to repeat what you hear in their presence.

Remember, you can still lose the client and commission right up to the final payment and sometimes even after that.

Next Article: I'm going to cover how I conduct my photo shoots with my clients & subjects.

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For more information on copyright laws:
U.S. Copyright Office
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