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Contracts, Lawyers and Ethics

A good friend from LA called and asked for a copy of our standard contract. She is from the land of entertainment lawyers and was shocked when I told her we don’t have one. We do have a short letter of agreement that outlines fees, payments and ownership and is probably legally useless.

So I started thinking about the need for a contract. Architects have them through AIA. But they get sued a lot anyway. Lawyers don’t seem to have them. Interesting. Photographers have estimates and forms about usage rights. Doctors and amusement parks make you sign a waiver. In all my years in business, I have never been sued and never felt like I needed a contract. I have always viewed contracts as a license to sue someone (“you say on page 7, paragraph 3 that the type size´┐Ż”) and that never seemed like a good idea. The world is getting more litigious— now you can sue people if you get fat. Is the legal system really about ethics and what is right?

It is important to understand this issue when you get into a relationship for money. There needs to be mutual trust and mutual responsibility. This is the key. This is what you base your reputation on.

Contracts can protect both parties — or so you think. It is almost impossible to sue a client since they tend to have lawyers on staff or on retainer. It is your lawyer money against theirs and you will almost always lose. So what do you do?

I tend to think it is simple. Write down what you are going to do, create a schedule for when it will happen, outline the process, the fees, the mark-ups, anything that a client may not anticipate. Write down who is responsible for what and what the consequences are. Communicate and take responsibility for what you do, and you will rarely encounter a problem. Designers are as much consultants as they are producers of a “work product.” We create things that are often immeasurable and intangible. We often start in one place and end in another, and that fluidity is critical to our ability to solve visual and verbal problems. It cannot be quantified in a contract. It must come from a trust-based relationship.

Our industry is confusing to the outside world. Many designers are not ethical and some clients are understandably not very trusting. Add in printers who toss in the design free, the rights issues (“we paid for the photo, why can’t I have it?”), the inherently bad concept of mark-ups, agency-net and the always popular “finders fee” and you wonder why there isn’t a contract for everything.

Be ethical, do great work, take responsibility, protect yourself if you smell a client rat (get the money up front) and try to get lawyers as clients— not the other way around.

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ARCHIVE ID 1667 FILED UNDER Business Articles (Admin use only)
PUBLISHED ON Nov.21.2003 BY steve liska
WITH COMMENTS
Comments
Darrel’s comment is:

I'm not sure if you are asking a question or not, but what you describe doing (writing a schedule, outlining responsibilities, etc.) *is* pretty much a contract.

While contracts do offer some legal protection (I have sued and won against a client once) the bigger purpose is to simply get both sides on the same track. I've found contracts to be invaluable in keeping projects in-scope and timelines adhered to on both sides.

On Nov.21.2003 at 09:18 AM
Darrel’s comment is:

I should clarify...I never actually sued. The simple act of having a lawyer mail a letter referencing the contract was enough.

On Nov.21.2003 at 09:25 AM
Sam’s comment is:

Write down what you are going to do, create a schedule for when it will happen, outline the process, the fees, the mark-ups, anything that a client may not anticipate. Write down who is responsible for what and what the consequences are.

The key words being "write it down." I suppose it could be on a napkin as long as both parties sign it, it's still a contract. And I think calling it a contract is necessary to being taken seriously by clients, not to mention protecting yourself legally. I don't foresee getting sued over a design job, but I have certaily used contracts to explain to clients what is and isn't within the scope of agreed-upon work. Otherwise they tend to think I'm being hired to work until they're happy, instead of within a certain set of parameters and timeframe.

Finally, I don't see the logic in this: It is almost impossible to sue a client since they tend to have lawyers on staff or on retainer. It is your lawyer money against theirs and you will almost always lose. What if my brother is a Harvard Law grad? What if their lawyers are drunks? What if they've breached the contract and we both have medicore lawyers? I like my chances in all those cases.

On Nov.21.2003 at 09:35 AM
amanda’s comment is:

i just do the proposal for the work, make two copies, and the client and myself sign both & each keep a copy. Pretty simple contract. I've never had any problems.

On Nov.21.2003 at 09:41 AM
Sarah B’s comment is:

I only do a small amount of freelance work that would require a contract - It is simple, and sometimes only a verbal contract. I usually have a "estimate" at the start of a project, and if ai do not get a deposit of about 15%, I will have them sign the estimate, to pay a price that is somewhere in that ballpark - and I have never had a problem. If it someone I know, I usually just go by the verbal contract thing.

And last night, in fact, my boyfriend ( a state trooper) was in a situation with a young couple, and they had verbally agreed on something prior to last nights incident, and she had to pay him - because she made the verbal agreement, so I guess it is legally legit to cause a fuss, either way, if something is not done. Ok, kind of a tangent.. but related.

On Nov.21.2003 at 10:00 AM
graham’s comment is:

the world isn't getting more litigious-just a part of it.

On Nov.21.2003 at 10:21 AM
ps’s comment is:

a signed proposal usually does the trick for us as it states all deliverables, timing and compensation. one client in the past few years asked for a full blown contract. i used the aiga contract which seemed to work fine. needless to say the client that asked for a contract was the biggest nightmare to deal with and he dropped off my client list as soon as i fullfilled the contract.

On Nov.21.2003 at 10:53 AM
Darrel’s comment is:

Anyone have tips for what they put in their contracts? I think we may have gone over this before, but it probably wouldn't hurt repeating. Some of the things I've added over the years:

- a clear statement that any work created will be used in my/our portfolio

- final payment for project due at a specific date (not final deliverables)

- any work requested that is not explicitly stated in the contract will be considered a change order

Those are just a few off the top of my head...

On Nov.21.2003 at 11:09 AM
marian’s comment is:

Like Darrell said, the bigger purpose is to simply get both sides on the same track.

I think this is especially important when working with smaller clients who are not used to buying design services. It lets them know what they're buying, and should include something about usage rights, because this is the biggest area of misunderstanding, from my experience.

Our Ethics Chair for the GDC/BC is always getting calls from people who've got into a sticky situation with a client. Her first question is always "Do you have a contract?"

It's not that people are too dishonest for a handshake, it's that people remember things differently, and genuinely don't understand. Put it in writing.

On Nov.21.2003 at 11:12 AM
amanda’s comment is:

On my proposals i have the following information:

- project objective

- project specs

- hours involved (& it is a detailed breakdown for each part of the job)

- cost for creative/illustration/design/production hours & printing

- extra things included in that price, like printer proofs, project management, reviewing press proofs etc.

- note stating printing will be billed by chosen printer

- tax not applicable (I come under the bracket to charge tax in Canada this year, next year i will have to deal with that jazz)

- place for signatures

i always add this little do-hicky to cover my rear, I have never charged extra for late payment though: A service charge of 2.0% (24% per year) will be added to any invoice not paid within 30 days of the billing date.

Usually when i invoice, most of this info is relayed again on the invoice, with an added thank you note for the work.

On Nov.21.2003 at 11:27 AM
brent’s comment is:

i may have missed this, but has anyone ever had a client balk after the topic of contracts came up?

On Nov.21.2003 at 11:52 AM
Sam’s comment is:

Does anyone use a clause for identity work that retains reproductive rights and outlines a licensing agreement, whereby you get paid every time the logo you designed gets used on other products (packaging, website, brochure, etc)? The client has to basically pay for usage rights of their own logo. This seems like how it oughta be with certain kinds of (larger) clients.

On Nov.21.2003 at 11:58 AM
Priya’s comment is:

i'm actually taking a course in Business Law this semester (for my marketing degree) and the entire courseload has been quite helpful. in fact, if anyone wants to know more about basic contracts and other legalities while conducting work as a business or an independant contracter, email me and i'll hook you up with a link to my class website where the notes reside. (or if you rather the entire nitty gritty, i suggest ordering West's Business Law ninth edition from Amazon. the book is what we use for a text, is easy to read and will be in my possession forever. the most useful textbook ever.)

i never work without a contract. i've been burned once and that's enough for me. the contract always states the specific parties involved, the work to be completed, a timeline for deliverables (including deadlines for when the client needs to get back to me so we can pass each milestone), the pricing structure (15% upfront, balance on reciept of completed project.) and spaces for signatures. i also include a seperate sheet the the client uses to keep track of milestones so he an sign off approval after each step is completed. this way we don't run into a problem where the job is near completion and the client changes his mind about the entire concept.

knowing now what i know about ownership of work while working for a company vs. working as an independant contracter i realize that i've been screwed out of monetary awards and recognition. statute of limitations prevents me from collecting these awards, however but now i know for the future. reading business law is a smart thing to do for any designer in my opinion.

On Nov.21.2003 at 12:07 PM
Priya’s comment is:

Does anyone use a clause for identity work that retains reproductive rights and outlines a licensing agreement, whereby you get paid every time the logo you designed gets used on other products (packaging, website, brochure, etc)? The client has to basically pay for usage rights of their own logo. This seems like how it oughta be with certain kinds of (larger) clients.

this doesn't make sense to me. if anyone knows otherwise, please clarify but this is my understanding: when developing identity work you are developing work for the client to use/own. there is what is called consideration with every contract, without consideration a contract is not binding. consideration basically means "something for something". in a contract for standard ID work consideration would be "money in exchange for an identity". this is fair consideration because each party is gaining something new through the contract. there would be no consideration if the exchange is "money in exchange for nothing", meaning the client pays money without technically owning anything new. if you put in a clause that says the client has to pay you for doing work and then pay you more for use of that work, there is no fair exchange. he doesn't own the work you have supposedly done for him. he has not gained anything new by completion of the contract. there is no consideration so therefore the contract is not binding.

with every contract it has to be fair for both sides. from a business standpoint, why would i want to hire a designer if i have to pay him a royalty for using my own logo? the point of me hiring a designer in the first place to develop an identity would be so that i could brand myself most effectively, gain visual recognition and in turn be more successful. the more successful i get, the more i'd need my branding and its implementation. it doesnt make sense for me to have to pay someone a royalty for the success of my own business. in cases where clients are large businesses, it makes more sense to me for the designer to charge more for an identity than to demand a royalty.

On Nov.21.2003 at 12:22 PM
Tom’s comment is:

I have a royalty agreement with one of my clients. They sale goods online and through catalogs. I recently overhauled their identity. If they sale anything with my artwork on it, ie. tshirt, golf shirt, coffe mug, etc. , then I receive 7%. That's only on merchandise sold - not give aways or marketing materials.

On Nov.21.2003 at 01:15 PM
marian’s comment is:

The licensing of artwork for a logo has never made sense to me, but brochures and other printed material, plus websites are another matter. Clients are actually only licensing the design from you. Your company still owns the copyright. What this means is that the the client cannot, in theory, take your design for a brochure and spin it out over 15 other company brochures (by recreating it in-house or hiring someone else to do it). If that is their intention from the start, your fee should reflect that fact, and you may even supply them with a digital template (this is why we don't supply our files to the client).

has anyone ever had a client balk after the topic of contracts came up?

We've had clients get shifty but once we explained the reasoning, they were OK about it. There are some big companies that "refuse to sign contracts". Telus is apparently one of them. I'm not sure what this means or why they would do that.

On Nov.21.2003 at 02:22 PM
Sam’s comment is:

when developing identity work you are developing work for the client to use/own. there is what is called consideration with every contract, without consideration a contract is not binding. consideration basically means "something for something". in a contract for standard ID work consideration would be "money in exchange for an identity".

priya, i think i understand your point and what you describe is basically how i've been dealing with my clients. BUT it's predicated on the idea that use and ownership are the same and they don't have to be. (here's of course where a contract is required to draw the distinction.) if i design stationery for a client, they get stationery: ergo consideration. they don't get the quark files for that job. i'm sure we've all gotten calls from either the client or some other designer asking for a copy of the logo. (i can't find where we talked about releasing digital files but i think we did.) i haven't done such a big job where i saw the opportunity (which is i think the key word, as in cash money) to separate the concept of identity (one fee) from the application(s) of it (another fee). in any case, it would all be in how you negotiate it, i think, and walking the line between a good relationship and your own interests.

On Nov.21.2003 at 02:34 PM
Sam’s comment is:

right, what marian said (as i was writing my own). the ownership clause is an important one--mine says that the client owns the copyright and i retain the right to reproduce it for self-promotional uses only. thus i can't rip off one client's logo later with another client, not that i ever would.

i'd call clients who balk at a contract "former clients."

On Nov.21.2003 at 02:38 PM
Virginia’s comment is:

I'm a long-time reader of Speak Up, but haven't ever had anything to comment on... until now.

Over the last few months, I've been doing some small freelance projects for a company I used to be an employee of. Some of the work I've been doing has been related to a conference my clients are running in April next year, and so my work has involved creating a kind of theme/identity for the conference. I've been quite proud of the work I've done - I'm a very junior designer and haven't had control over many projects before, so it's been exciting to come up with concepts etc.

Anyway, my client has just engaged a conference organising company to pull the conference together, including finding sponsorship etc. Unknown to me, however, or in fact to my client, the conference organisers sought, and gained, DESIGN sponsorship. The first thing I heard of it was

"Hi Virginia - it's XXX here from XXX conference company - can you please email me the artwork from the brochures you designed for XXX conference?"

Feeling somewhat suspicious, I call my client, who explains the problem, in an embarrassed way.

I say "well I've gotta say... despite loyalty to you guys, who have been so supportive of me in the past, I'm very reluctant to hand over my intellectual property to another designer..."

My client asks me to think about it over the weekend, which is where I'm at now.

What are your thoughts? What should I do? I'm happy to post more details, but don't want to make this post too long...

On Nov.22.2003 at 12:25 AM
Stephen’s comment is:

A special committee of the New York Chapter of AIGA was formed to research the issue of graphic design work and contracts. This resulted in the creation of the Standard Form of Agreement for Graphic Design Services. This document is available (at no charge) for download from the Tools section of the chapter's web site.

On Nov.22.2003 at 06:48 AM
Sam’s comment is:

virginia, sounds like you're in the very situation i was describing earlier. it's extra tricky when you're freelancing for a former employer, as those arrangements usually are the most loosey-goosey, and personal relationships can come to replace a clear contractual agreement. do you have any written contract (even email) that you can refer to in negotiating how to handle this conference sponsor?

it sounds to me (and i am no expert) like you said the right thing with: "well I've gotta say... despite loyalty to you guys, who have been so supportive of me in the past, I'm very reluctant to hand over my intellectual property to another designer..." this puts you somewhat in control when dealing with your client. what happens next may depend on what you want: do you want to stay involved in the project? would you get swallowed up by this big sponsor and ultimately not get the proper reward (creative, recognition, contacts, money) for your involvement? would it be beneficial to work with the sponsor and get yourself into the middle of things? this is pretty tough to do starting out--like trying to play touch football with the...well, who's a good football team these days?

if you feel it's in your best interest to cut bait, you might consider offering a fee whereby the client buys your digital files and retains ownership of them. while this might sound like you're forfeiting intellectual property, it might be the most lucrative route in the end because this sponsor might just scan your work anyway. it happens. intellectual property is hard to protect when everyone's got a scanner. if you do this, i'd suggest 1) writing it down and 2) making it clear that your involvement is ended with x-y-z (delivery of files, receipt of payment, etc) and 3) add a paragraph describing payment for any work you do for the conference in the future (should the sponsor come back to you and say 'can you just do this one little thing for us, since you started the project?' --you should get paid for that, even if it's an hourly rate).

anyone else with suggestions? i am only speculating on your situation, virginia, and it's all very tricky to handle, but that's how i would proceed in that situation. hope it helps.

On Nov.22.2003 at 11:53 AM
jonsel’s comment is:

I design stationery for a client, they get stationery: ergo consideration. they don't get the quark files for that job.

I'm a little confused about this, Sam. I've recently done an identity for a company, and did their stationery in the process. Do I not hand over the stationery mechanicals once everything has been printed? I would assume it is their right to reprint the stationery until they are sick of it.

On Nov.22.2003 at 12:40 PM
Sam’s comment is:

Well first, Jon, clients usually have no use for Quark or Illustrator files--any Mac files for that matter, so it's a moot point. They will ask for a jpeg of the logo to paste into a Word document for some reason or other and I generally give them this if I'm reasonably sure they're not going to give it to some other designer (and take food out of my kitty's mouth).

Definitely look at sections 5.1 and 5.2 of the AIGA contract that Stephen linked to. It's missing a key clause about the conditions for reproduction rights, but it's interesting in that it outlines use but not ownership (see Priya's points, above).

Certainly it's no problem for a client to reprint stationery to their heart's content. This is different from them taking your work and paying someone else to use it on another piece such as a site or package. That's where licensing comes in. But reprinting the same thing over and over--no need to get legal about it. In your and my cases, where we're small operations (for now, ahem), the easiest thing to do is have the client call the printer and place an order: no work for you. If they need a few new business cards laid out (happens to me a lot with new restaurant managers), I usually do this, send the file to the printer, check proofs free of charge. How much can I charge for this anyway? Hundred bucks? I like to avoid the appearance that I'm nickel-and-diming them (in the hopes I never get a call from some other designer they've hired because they're sick of me). Again, the way I see it is, they bought stationery--printed paper--not digital files or mechanicals. If you're hired just to design a logo, obviously you need to spell out the delivery format, reproduction rights, usage rights, etc. in a contract. I'm still reeling to read that Liska+Assoc. doesn't use a contract. Goes to show what I know.

On Nov.22.2003 at 01:19 PM
jayna’s comment is:

i may have missed this, but has anyone ever had a client balk after the topic of contracts came up?

I've actually had this happen a couple of times.

Truth be told, my year-long freelancing excursion was nothing but deadbeat clients who all wanted something for nothing, and no contract was going to prevent that. For me it was a matter of do I take this project and risk it, or do I just sit around with no work to do and no chance of paying my rent. So against my better judgement I took the jobs (the mistake was mine).

After diligently doing the work AND sending an invoice of my hours worked this one guy gave me this bit about he didn't believe in paying designers by the hour, because it wasn't fair to "good" designers who didn't take as long to complete their projects as the "bad" designers, who could spend more time and in the end make more money because of their poor skills. I get his point, but what a crock.

I've had more than my fair share of verbal agreements, and in the end none of them meant anything. Even when the client (or middle man) tells you UP FRONT, "I always force my clients to pay half up front" when push comes to shove they change their tune and tell you "the clients will pay us when they feel like paying us and there's nothing we can do about that." Whatthef*ckever.

Another of my regular clients (a middle-man actually - he provided the hosting service and got the clients and I did all the design) -- he would always have a contract for me to sign before starting a project. The problem was, he didn't even read over his own contracts. So many times they would have the wrong client or project name or even my name would be wrong and he'd expect me to sign it. Then, weeks (or months) past the initial deadline date in the contract and there were more revisions to do he wasn't willing to charge the client any additional costs (so I didn't get paid anything additional either). What a nightmare.

I downloaded some forms/contracts from www.creativepublic.com a long time ago. They seem pretty fair for all parties involved, unfortunately I've never had the opportunity to try them out...

On Nov.22.2003 at 04:20 PM
marian’s comment is:

Whatthef*ckever

Actually, Jayna, there is something you can do about that. Stop work. It's better if you go to the library, get some exercise, work on a self promo project and not get paid than if you work for some other asshole and not get paid.

The thing about having a contract and sticking to it, and being tough (here's me talkin') about payment is that the only thing you've got to lose is deadbeats who had no intention of paying you to begin with.

It is not unreasonable (or unusual, I think -- anyone?) to get 30% up front, 30% on signoff of concepts and the remainder when the job is done. (I've dealt with lawyers who made me pay in full before I left their office.) You will benefit greatly by having and using a contract of your own (as opposed to someone else's), plus a list of standard practices. This can make it more objective and help you to stick to your guns (eg. "Sorry, but as it is outlined in my list of practices, I do not do work on spec/hand over my digital files/do more than 2 rounds of corrections without billing extra charges ... " whatever).

There will come a time when you will encounter less of this bullshit, and maybe even none, but unfortunately it seems to me that bastards who like to get things for free instinctively prey on the young and inexperienced. And sometimes, to give the benefit of the doubt some people just don't know anything about buying design services so you need to tell them how it works.

Your middlemen-clients sound like dicks. Fire every client who has either lied to you or not paid you. Think about it: are you being hired because of your work, or because you work for free?

On Nov.22.2003 at 07:30 PM
jonsel’s comment is:

he didn't believe in paying designers by the hour

I almost never work hourly. I do base my fees on an hourly rate and an expected time frame of the project, but it always results in a flat design fee with certain deliverables. That way, if a solution takes me 20 minutes, I'm still getting my full fee, which covers thought as well as time. I feel the idea is worth far more than the time, anyway. (And if it takes me longer by no fault of the client...then I screwed my own profit margin and I bear the burden.)

Generally, I'll charge hourly rates when I'm doing revisions past the agreed upon amount and I want to be nice or when I'm freelancing for certain agencies that want to do it that way. Not all do.

the way I see it is, they bought stationery--printed paper--not digital files or mechanicals.

I guess I get confused as to ownership vs. reproduction rights. Why do they not own the stationery design itself? If they want business cards for their newest associate, shouldn't they just be able to produce them from the mechanicals? I know this cuts me out of the loop, but I figure they own the stuff, they should have it.

On Nov.22.2003 at 09:07 PM
jayna’s comment is:

Thanks to both of you for your advice! Believe me, after a year of playing out that "starving artist" role I certainly did learn a lot about the common business practices of what to do and what not to do as a freelancer in the design field. Thank goodness I finally have a fulltime job!

Your middlemen-clients sound like dicks. Fire every client who has either lied to you or not paid you.

I've actually done that. It's unfortunate because I feel like I've had to burn so many bridges that could've been potential business contacts (and Columbus is such a small town that everybody knows everybody), but based on my experiences with these guys I don't think I'd want to do business with any of their colleages. I've also made a pact with myself to never ever ever again do work for free. Not for friends, not for non-profit organizations, not for anyone. It's just a bad habit to get into, however selfish that may sound. But even if I come across as an ruthless person with no soul I'll be happy to at least have my own piece of mind (and less headaches toboot!)

On Nov.22.2003 at 09:58 PM
Tan’s comment is:

Good discussion. I'm a little late to the game, but I have some thoughts I'd like to add.

A legal contract is only as binding and strong as the consequences that you're willing to back it up with, or carry out. It's like Cold War logic -- the only way to prevent the unthinkable was to make certain that each side backed up its threats creditably.

People who create contract are hoping that they'll never have to enforce them. People who knowingly break /ignore contracts are betting that the other party would never have the financial resources or balls to follow through. Don't make a contract with language that you're not prepared to back up 100%.

My new (merged with) company's work contract is six pages long. We have one of the city's largest law firm on retainer -- and we have someone internal that goes through a formal process of legal contract review with every new client. Seems overkill, but we have a number of the Fortune 100 clients on our roster -- and that's just the way they do business.

We still get shafted periodically. The last time it happened, it was an annual report client that went through a major corporate shakeup right in the midst of year-end work on their annual. After an internal power struggle, the IR team we worked with was fired, and a new IR team assumed the project. Almost immediately, they refused to honor our signed work contract, choosing to go with another agency -- eventhough a portion of our creative had already been presented and approved. They literally challenged us to sue them. But after some preliminary investigation, we discovered that the company was in the process of filing for bankrupcy protecttion, and that we were in a long line of vendors who they knowingly screwed. That meant in order to win our suit, we would've had to amass a class action suit, coordinating with the other vendors' counsel, not to mention over-riding federal bankrupcy protection. To simplify, we would've had to spend $1,000 to recover $10. The bastards knew we'd never pursue it -- so they did whatever they hell they wanted, and not just with us, but with most of their vendors. Well they were right in our case -- we gave up, despite an iron-clad contract.

Contracts are a necessity -- but they can give a false sense of security and trust. Contracts are definitely good at establishing business relationships. But they don't really protect -- only expensive lawyers can help you do that; or establish trust -- only you and the client can do that.

If you feel that you need to legally safeguard yourself against a particular client, then maybe it's best to find another client. The old adage is true -- if it smells bad, then it usually is.

On Nov.23.2003 at 12:03 AM
marian’s comment is:

Tan, you work on a different plane than I ever did (except for the odd client) or many other designers do. I think for many people the contract fulfills a couple of roles other than the legal binding agreement. It is particularly useful for inexperienced clients who don't know what they're buying, it sends the message "we know what we're doing/we're professional", and it sets the agreement in writing so that you don't have to end up in a "he said, she said, you said, I said" situation. I also think it serves as a deterrent to certain dishonest people. Of course there will always be people who will try to screw you, contract or no contract, but I think you're always better off with one than without one.

On Nov.23.2003 at 01:50 PM
Tan’s comment is:

> I think for many people the contract fulfills a couple of roles other than the legal binding agreement.

I agree -- a contract can also serve as a work agreement or creative strategy, among other things.

It's just that Steve started the discussion questioning the need for legal contracts and lawyers in our business, why people sue each people over design, and whether or not contracts are helpful or hurtful.

So in response, I was just making a point that people shouldn't forget that design is still a business. And all businesses are risky and scary -- not everyone is nice out there. It may be unpleasant to think about being ligitious, but it's wise to understand the language and workings of different types of contracts.

> Tan, you work on a different plane than I ever did (except for the odd client) or many other designers do.

The truth is marian, I don't. I operate exactly like thousands of other small businesses. All it takes is for you to get royally screwed by a client (may it never happen), and you too would have a six page contract ready for the next client that walks through your door.

Having said all that, I want to go on record that I detest the need for contracts and lawyers. It's one of the few things I hate about running a business.

.....

A thought just occured to me -- we don't work in the same countries, so our legal environments are slightly different. I have to believe that Canada is far less ligitious than the US.

On Nov.24.2003 at 03:31 AM
Darrel’s comment is:

But they don't really protect -- only expensive lawyers can help you do that

Though sometimes it's not that bad. In my case, simply having my lawyer send a registered letter (I think that cost me $100 or so) the client quickly backed down and paid up.

If I would have gone to court, it sounded like it would have been fairly painless. I would have gone to small claims. The client (out of state) would have had to then come to court in my state. And, having a contract, I think it wouldn't have been too hard to win something. If not, I was out a few bucks in court fees and an hour or two of my time.

I do completely agree though that the contract, first and foremost, is a tool to establish trust between both parties.

Marian's comment is spot on as well. A contract is really just a detailed to-do list for both parties. When I was working for smaller firms, the contract was a huge benefit by reducing needless re-works. With a tight contract, it was a simple manner of saying to the client "well, based on the timeline and agreed-upon deliverables, we'll need to write up a change order." That, alone, usually got the client to stop with the art directing. ;o)

Just don't be afraid to use your lawyer when you need to. ;o)

On Nov.24.2003 at 10:51 AM
marian’s comment is:

I have to believe that Canada is far less ligitious than the US.

Yes, that's an interesting thought. In general Canada is a less litigious place ... which makes me shudder to think what might have happened in certain instances if we were in the States. My ex-partner's undeniable talent at smoothing over trouble and finding creative solutions to ... er, fuck-ups, might not have served us so well.

On Nov.24.2003 at 11:20 AM
kemie’s comment is:

While I understand the concept of not handing over original/source files for design work (If I make a website, the client gets the website, and none of the files I used to make it), it makes absolutely no sense to me in the case of identity work. If I were a client, I would expect to get files so I can reproduce my logo in any shape, way, or form I wanted, and as a designer, I take this into account when budgeting identity work. I would hope that a satisfied client and a good business relationship would be enough to make him want to hire me again... not me hijacking his .eps's.

On Nov.24.2003 at 12:58 PM
Sam’s comment is:

I would love to hear from David W. or Michael B. about how a huge identity is handled at Futurebrand or Pentagram. Is there anything you guys can say within the bounds of whatever pin-striped nondisclosure fortress you build with your contracts? Does an identity project by contract include all its applications? Have you done, say a packaging project, and needed to call the original designer to get logo files? Does that designer get any consideration for their work being used in your project?

On Nov.24.2003 at 01:14 PM
marian’s comment is:

it makes absolutely no sense to me in the case of identity work.

For myself, everything I've said regarding usage rights, copyright and ownership of digital files refers to everything except logos/identities. (For me, others may work differently.)

I always provide the client with digital versions of their logos in everything from eps to colour bitmaps (for use in their skanky Word documents), and expect them to use them as they see fit (within the logo usage guidelines of course).

On Nov.24.2003 at 02:53 PM
Patrick’s comment is:

>I always provide the client with digital versions of their logos in everything from eps to colour bitmaps (for use in their skanky Word documents), and expect them to use them as they see fit (within the logo usage guidelines of course).

Ah, but if there were a way to get a payment every time a client broke the logo usage guidelines, then we'd all be rich. "I see in your most recent catalog, the logo I designed for you appears within a sentence. That'll be a $500 dollar fine, thank you."

I think I've said this before, but identities aside, my contract (well, specifically the notes accompanying all estimates) states that I don't turn over digital files to clients. If they feel they need it, I'll charge a separate fee. This is at my accountants' request, as if you regularly supply disks at the end of the project, it could be viewed by the gov't that you provide a product - for which you need to collect sales tax - rather than a consultation - for which sales tax is not applicable.

On Nov.24.2003 at 05:00 PM
jonsel’s comment is:

I would love to hear from David W. or Michael B. about how a huge identity is handled at Futurebrand or Pentagram.

Well, I could possibly speak a little about things Landor did. I will try not to break open those non-disclosure forms I signed as well. Generally, the work proposal spelled out the deliverables very clearly, from which applications would be designed fully, how much oversight we had with printing, etc. To begin work, the client would sign it and we'd get going. If the client wanted to expand the scope of work once design was underway, a new proposal was submitted detailing the additional work with the extra costs.

I've been in a situation where the client did keep asking for more work, assuming it was in the fees. We always had the proposals to go by, though, to show what was paid for and what wasn't, so contracts are very helpful in that regard.

Have you done, say a packaging project, and needed to call the original designer to get logo files? Does that designer get any consideration for their work being used in your project?

Tricky ground, this one. I did work on a packaging project where the basic identity had been done by another agency. We did some modifying, of course. The other agency did have some involvement with the review of our designs, so if they wanted to, they could have freaked about our modifications. In general, the client gets the final say-so on altering existing work. If they approve it, it goes through.

If you are wondering if the other agency gets paid anything extra...my guess is no. But I speak from experience with identity work (corporate and brand), where total rights are assigned to the client. I haven't had the joy of being given someone else's brochure to rework.

On Nov.24.2003 at 05:26 PM
marian’s comment is:

Ah, but if there were a way to get a payment every time a client broke the logo usage guidelines, then we'd all be rich.

Indeed we would. "Do not stretch, twirl, twist, squish, rotate, flip ... " Aw damn! I forgot to say "... make wave like a flag ..."

On Nov.24.2003 at 05:42 PM
jim’s comment is:

I think this proves there needs to be a union, representative, etc. for designers. Today it is too easy for the "knowing" to take advantage of the ignorant (not a negative connotation, just not knowing).

On Nov.30.2003 at 08:50 PM
Jane Pellicciotto’s comment is:

I didn't read every post, so this may have been covered already. Firstly, to Amanda, who listed the contents of her contract/working agreement, it excludes usage rights. So when she said she's never had problems, that's probably why.

Usage rights are the only thing any client has balked at. Please get a copy of the AIGA standard contract or consult the "Pricing and Ethical Guidelines" that the Graphic Artist Guild publishes.

Logo are understood to be owned by the client once the work is done and paid for. It would be tiresome for a client to ask for permission or to compensate a designer every time the logo is used. But this is why logos should carry a value-added fee (not time and materials, in other words). For practical purposes, the client needs to own the logo, so the original fee should reflect long-term usage (if you can get it!).

I'm still trying to figure out what work doesn't qualify as protecting, like a very straight forward data sheet or form of some sort. You might give a client files to update in-house without charging a usage fee, especially if you are enjoying repeat work from them. Consider it a service but let them know this isn't standard on every project.

All other work though, is OWNED by the creator. This is stated in U.S. Copyright Law. This includes ideas not chosen. One thing clients don't seem to realize is that they are hiring you for your services, not for ownership of the files. Some clients try to bully you into giving them files (this happened to me recently), saying all designers give them files. Well, I don't. A good reason not to is this: your computer files contain all the decisions you made in creating the piece. It's your intellectual property. Maybe you're a genius at setting up complex style sheets. Your underlying grid, every detail of your typography (spacing, etc.), how you shaped the page and built the file, etc. That's part of the value you offer that made the job look as it did. Once you turn that over, you essentially say this thing has no value. The client will then take your file, hire someone cheaper and now you not only lose out on future earnings. But more importantly, there is one more client who has the expectation that they own a designer's work.

It's then much harder for the next designer to do good work, get good fees and protect it. We're all in this together. If everyone worked in a more professional manner, it would benefit us all. Because of the array of differently skilled or educated designers, clients experience a dizzying array of work styles or professional practices. This is why organizations like AIGA try to standardize practices.

I will lose the aforementioned client whether I give them files or not (fortunately I was paid long ago). So some might ask, why not just give them files? I didn't want to be yet another designer who created the wrong expectation for a client that they can own what the don't pay for.

Have a usage rights clause. Know your rights. Understand why it's important to protect work. Discuss it up front and don't be afraid to walk away from a job. If the client is unreasonable about that, they will likely be on other issues as well.

On Dec.07.2004 at 03:41 PM
louise lemieux’s comment is:

My question is about Strata Corporation. The Strata did some work on my common property balcony and then sent me a bill. This bill is illegal, but I have a lawyer for that. My problem is that they keep threatening to send me another bill as well. The work was finished a year and three months ago and still they don't send this bill and they keep threatening to send it. Is there a statute of limitations deadline to when they can no longer send this threatened bill? It's getting pretty frustrating.

On Dec.13.2007 at 01:30 AM