Glossary of Terms
The following list of contractual terms is designed to further educate artists on the various terms typically employed in both general and art-specific contracts.
General Contract Terms
The following list of terms is not designed to be exhaustive, but merely to provide simple working definitions of terms typically found in contracts.
- Arbitration - Arbitration clauses require disputes to be submitted to an arbitrator or panel of arbitrators for resolution. These provisions require private resolution of the dispute and typically forego a claimant’s right to pursue its claim in a court of law. Arbitration clauses are common in boilerplate agreements, as they limit the forum in which a claim may be brought. As arbitration can be very costly to claimants as well as respondents, it is advisable to research costs and define which organization will handle the arbitration process should a dispute arise.
- Attorneys’ Fees and Costs - In many states, attorneys’ fees incurred as a result of a breach of the agreement are available only by virtue of a statute or by the agreement of the parties. Other states award fees to the prevailing party in litigation. In either case, a clause in a contract specifying the parties’ preference for the payment of such fees will control.
- Choice of Law - A choice of law provision submits a claim to the laws of a particular jurisdiction. In most states, these clauses are enforceable so long as the subject matter of the agreement bears some relationship to the chosen forum state.
- Counterparts - A provision regarding counterpart signatures simply means that an agreement is still enforceable even though each party has signed a separate copy of the agreement.
- Forum Selection - Similar to a choice of law provision, a forum selection clause requires claims to be brought within a certain jurisdiction. Again, in most states the selected forum must bear some relationship to the subject matter of the agreement. It is thus important to review these clauses to determine whether it is feasible for you to bring a claim in the chosen jurisdiction.
- Integration - An integration clause states the parties’ intention that the written agreement represents a full and complete representation of the entire agreement between the parties. In other words, an integrated agreement is one that cannot later be modified by oral terms alleged to have modified or altered the agreement in some way. Since most written contracts are intended to be integrated writings, it is important to ensure all terms of the agreement are provided for in writing.
- Liquidated Damages - A liquidated damages clause seeks to remove the uncertainty surrounding potentially ongoing or difficult to quantify contractual damages by specifying a dollar amount to be paid in the event of a breach.
- Modification - A modification clause provides the process for modifying a written agreement, such as by a separate writing by both parties. The modification clause usually dovetails with the integration clause in an agreement.
- No Waiver - Waiver is the voluntary relinquishment of a right known to a party. This type of clause seeks to prevent the inadvertent waiver of a right by inaction by declaring that such inaction – or, in some cases, action contrary to the assertion of the right – shall not operate as a waiver of any right pursuant to the contract.
- Severability - A severability clause simply states that in the event a certain provision in the contract is found to unenforceable for any reason, such unenforceability shall not operate to invalidate the remainder of the agreement.
- Successors and Assigns - Since contractual rights may be sold, transferred, or assigned to other persons or entities, a successors and assigns clause binds any future parties to the agreement by virtue of the transfer of any rights granted thereunder to a third party.
- All-Rights - An All-Rights contract typically grants to the client full ownership of the artwork for any purpose the client chooses. Consequently, the artist often retains no future rights to the work, including the right to any future profits. It is important to review the specifics of the agreement to ascertain exactly which media rights the client is seeking in exchange for the promised compensation.
- Blanket Rights - A blanket agreement differs from a traditional agreement in its extremely broad scope. Rather than being limited to the work currently being requested by the client, a blanket agreement will govern any future work performed by the artist for the client, as well. Since these agreements may impose restrictions or other terms on future work for which the artist has not yet been engaged, they should be entered into with extreme caution.
- Exclusivity/Non-Exclusivity - Generally, a grant of exclusive rights to the client means that the client is the only party that can utilize the art in the media identified in the contract. Non-exclusive rights – such as the artist’s right to re-sell or re-purpose the art – should be expressly stated in the agreement to ensure that the parties are clear on the artist’s ability to re-use or re-purpose the artwork in the future.
- Kill Fee - A kill fee is designed to protect an artist’s effort on a project that, for reasons outside of the artist’s control, does not come to fruition. In other words, it is a form of partial compensation based upon the time invested in preparing to complete the final work. This fee may be based upon the cancellation of the project, or by the rejection of the artist’s product by the client after completion.
- Media Rights - Art can be employed in various forms of media, whether print, electronic, broadcast, or otherwise. Certain contracts may involve the transfer of only certain media rights relating to the client’s intended use of the artwork, thereby allowing the artist to retain certain rights and to potentially re-purpose the work for use in other forms of media. If at all possible, artists should seek to limit the media rights transferred only to those that suit the client’s intended use of the art in order to retain future control should the art be of value within the context of a different form of media in the future.
- Ownership of Copyright - Basic copyright law makes a distinction between the original artwork and reproductions of the artwork, namely that the artist retains ownership of the original piece and any preliminary work generated in producing the completed piece.
- Reservation of Rights - The reservation of rights clause states that the only rights transferred from the artist to the client are those expressly stated in the agreement, and that any other rights will be reserved within the artist. This clause is vital to ensure that the client cannot contend that additional rights were transferred either implicitly or by omission in the agreement.
- Warranty by Artist and Indemnification by Client - It is commonplace to insert this clause for the protection of the client from any copyright claims of other artists contending a violation based upon the artist’s work. By including this clause, the artist promises to the client that the work is original and is does not violate the copyright of any third party, and further promises to pay any damages incurred by the client as a result of such a violation by the artist.
- Work for Hire - A “work for hire” agreement supersedes the general copyright rule that the artist retains ownership of the original work. Instead, the client is considered the owner of the original work and all reproductions as though the client created the piece itself.
Please be advised that this glossary is designed for educational and informational purposes only, and PACT shall not be liable as a result of your reliance hereupon should you choose not to consult with a lawyer.