B&N Week 36: What You Need To Know About Contracts

| August 30, 2011 | 1 Comment

It’s Tuesday, and I’m back in the saddle again with some Bolts & Nuts! Simply outstanding! Let’s dive right in!

Last week, I spoke about Money & Contracts, and this week, I said I’d talk more about Contracts. So, that’s what I aim to do.

I gave some advice last time. To review: there are two kinds of contracts: simple and evil ones, and you should get an Entertainment Lawyer to look over the evil contracts. I also said to keep every contract you sign, because it is more important than those rejection notices you got from Marvel/DC.

Here are some things you may not know about contracts. Here are some things you probably haven’t thought of. And, here are some things that are just sad truths about contracts. Buckle up. It may be rough for some of you.

Like I said before, contracts serve two purposes simultaneously: first, they spell out each parties’ responsibilities, and second, they protect each party from the other. How do they do that? When your responsibilities are spelled out for you, both parties then know what is expected. If your contract states that you, the writer, will pay the artist for pencils and inks, and the artist signs it but only does the pencils, you then have a leg to stand on in order to get them to do the rest of the work. Conversely, if the artist has done the pencils and inks with a contract that says you will pay them for that, and you only pay a rate that ends up being for pencils only, they then have a leg to stand on saying you owe them more money.

Contracts are great. Generally, they aren’t needed, but they’re great. (What do you mean, they aren’t needed?) Because generally they aren’t. We’ll get to that in a little bit. But here’s what I want you to understand: the basic need of a contract is for when things go wrong. When things are going great, there’s no need for them. It’s smooth sailing with the wind at your backs! No rough seas, no storms on the horizon, and the forecast calls for great weather all around. You and the creative team are doing the work, and the pages are coming in with no problems. This is the situation that most of you are going to find yourselves in. And, really, it’s a great position to be in.

Like I said, the basic need for contracts are for when things go wrong. Generally, things go wrong over one thing: money.

(Should I insert tones of doom here?) [It might be helpful.]

Money is important. As a writer, generally you don’t make much. As you already know, more than likely, you’re the one who’s spending everything in order to get Pen Man off the ground. But if you don’t have a contract in place, here’s what happens to Pen Man when he takes off.

First, though, let’s take a few steps back. You’ve hired Graeme McFreelancer to do the art for Pen Man. Let’s call it a simple page rate. You haven’t given them anything at all in terms of a character description besides “he looks cool.” So, Graeme does a few designs, narrowing things down, and you finally settle on one. You do the same thing for all of the villains and supporting characters, too. You hire the editor, write the script, and submit it to Image, who accepts it. You then have a runaway success on your hands with Pen Man. [Stop rolling your eyes, folks. This is an example.]

So, you’re now making money hand over fist off Pen Man, and Graeme is still getting the small page rate he agreed upon being paid. Graeme looks at the numbers, and says he wants more money. You say no, because you’ve quit your day job and giving him a bigger cut means less money for you and the house you’re trying to buy. So, Graeme sues you.

How dare he? After everything you’ve done for him! More money. Pfft! But you’re also scared. You’ve never been sued before for anything. You don’t know how it will turn out. So, you go to court, and the judge says that you owe Graeme half the money, because he’s the co-creator. You say what? YOU went to Graeme. Pen Man is YOUR idea. The storylines and writing are YOURS. All the characters are YOUR creations. How can you owe Graeme half?

The judge tells you that you didn’t have a contract spelling out each person’s role. That the only thing you did was hire Graeme for $10/pg, and you didn’t give any real direction on how any of the characters looked. Because of Graeme’s input on the look of Pen Man and the rest of the characters with your minimal input, he is now co-creator, and is entitled to half the proceeds.

See how that goes?

Here is a simple contract. It states who both parties are, and what both parties agree to. It lays out each party’s responsibilities. It is extremely simple.

And it isn’t worth the paper you’re going to print it out on.

(Le HUH? Why not?)

Most contracts between two people aren’t worth anything, because it isn’t worth the cost of going to court. A decently written contract is smart, and has loopholes [whether because of their inclusion or omission of certain parts] that can be wiggled through. Sometimes, the money owed is more than what is allowed in small claims court, but not enough to be bothered with in a higher court. [In a lot of states, small claims court tops out at around $2500.] Or, the parties contracted are from different countries, and one country may not recognize the contract of the other. [Besides, those contractees rarely have the means to get to the jurisdiction where the contract is enforceable.]

(If the contract isn’t worth anything, why should I go through the trouble of getting one and keeping it forever?) You weren’t listening. There is always the off-chance that Pen Man takes off. You’ll want the contract for that.

Remember, at their most simple, contracts are nothing more than agreements between two parties. You can also do this through e-mail. They don’t have to be formal. It could be very simple. “Hey, Graeme, just to sum up everything we’ve talked about. I’m hiring you to pencil and ink three issues of Pen Man: Ink and Swords. You’ve agreed upon $25/pg for both the pencils and inks, and I keep all the rights to the character. Please let me know if I forgot about anything.” See? Simple agreement. If Graeme comes back and says “No, Kletus, you didn’t forget anything. Sounds good to me. When do we start?”, then everything has been agreed upon. If Pen Man: Ink and Swords sells forever, making you money hand over fist, and Graeme wants a part of it and tries to sue, you now have a greater shot with the judge because you have the emails [to include headers] of the simple agreement/contract.

Contracts can be as simple or as complicated as you want them to be. They can be pages upon pages, or they can be a simple page. Generally, the more pages they are, the bigger the company you’re doing work with. Contracts between two private individuals should rarely be more than three pages.

When you’re dealing with companies, contracts start to get more complicated. They start to get more official sounding. Definitions are laid out, and then they start to have more Latin thrown in. Words and their placement start to get more important. When you start to get confused, when these contracts can no longer be easily read, then it is time for you to get an Entertainment Lawyer.

A couple of things about Entertainment Lawyers. First, like almost any other lawyer, you more than likely shouldn’t have to pay for a consultation. This is about an hour’s worth of the lawyer’s time. No niceties, no small talk. The clock is running! Talk about the predicament, bring along any paperwork you have/need, and get them talking as fast as possible. See what they can do for you, and at what price they can do it.

Second, you should rarely have to pay your Entertainment Lawyer. Part of their job is to make you money. If you’re in the right and they’re defending you, they get paid out of whatever damages won in the case. If you have to sue someone for infringement or whatever and you’re in the right, they get paid out of whatever damages won in the case. You should rarely be in the red with a good Entertainment Lawyer.

There is one other thing that needs to be said about contracts. They are rarely “fair.” The standard type of contract you’re going to run into is an adhesion contract. Simply put, this contract is written by one party, putting in everything that that person wants, stating what they will or will not do. Do this: go pull out your insurance contract. Then read it. (It’s all legalese!) So? You’re on the internet! Look it up! You’ll be doing yourselves two favors: you’ll be understanding what your contract says, and then you’ll be in a better position to start writing your own, or at least negotiate on things. Anyway, your insurance contract is an adhesion contract. It says what your insurer will or will not do, what they will or will not cover, and they wrote the language of the contract, also.

You cannot negotiate the contract with your insurance company, but you can negotiate the contract with the person/company you’re looking to go into business with. Remember, if they wrote the contract, it is not fair to you. You want to read the contract carefully, and if you don’t understand something, get them to explain it, and then get them to put that explanation in the contract. Dropbox, the site that many of us use to share files with one another as we create comics, recently rewrote their Terms of Service, and if there was legalese, they did their best to explain it in layman’s terms. This is not something you’d see Apple doing for their iTunes store.

When you’re negotiating the contract, remember to ask for the important things. Some contracts ask you to give up your Moral Rights, which means having your name associated with the work you created. You can ask to have that removed, or reworded so that the contract states that the company is NOT asking you to give up your Moral Rights. If you have a problem with the timeframes or processes or anything else, see what can be done to change it.

Now, a lot of companies are going to say that this is a “standard contract.” Great! You love standard contracts. However, this is what I want you to do. When they say “standard,” I want you to hear “starting.” The contract they give you is a starting point. If you read it and you like what you see, sign it. Again, go in with your eyes open. However, if you see something you don’t like, ask for a change. Be reasonable and be polite. Often, that’s more than enough for the change to happen.

If the company has given you a standard contract and is unwilling to change anything, you have two choices: you can sign it, or you can walk away.

Always remember this: YOU have the power. They may have the contract, but you’re the one with the power. The company wants something you have, be it your comic or you as the person able to come up with ideas. If you can live within the confines of the standard contract, meaning it is not too odious, then sign it. Again, make sure you go in with your eyes open. DON’T be dazzled by the fact you were offered a contract.

If you walk away, don’t do it in a huff. If you’ve asked for reasonable changes and they said no, then be polite, but decline. If your story is good enough to get one offer, it should be good enough to get another at a different place. If the company really wants you or your work/story, then they’ll see how serious you are and make the changes. If not, they’ll let you go. But never for one moment think you don’t have any power. You ultimately have ALL the power. Remember that.

I’m going to stop there, except to say one last thing. While I can talk contracts all day long, I’m NOT a lawyer. Your homework is to do research for yourself on contracts and entertainment lawyers for your location.

See you in seven!

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Category: Bolts & Nuts

About the Author ()

Steven is an editor/writer with such credits as Fallen Justice, the award nominated The Standard, and Bullet Time under his belt, as well as work published by DC Comics. Between he and his wife, there are 10 kids (!), so there is a lot of creativity all around him. Steven is also the editor in chief and co-creator of ComixTribe, whose mission statement is Creators Helping Creators Make Better Comics. If you're looking for editing, contact him at [email protected] for rate inquiries.

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