Every writer, artist and musician knows they should read and understand a contract before they sign it. You don’t need to hear the horror stories of rookies and veterans who lost the rights to a lucrative project because they didn’t know what they were signing. The advice is so universal, it often feels insulting to bring it up.
But the reality is many creative people don’t read what they sign. There are a lot of reasons why this happens, including:
- Time pressure by the other side (If I waste time reading this, they’re going to give the deal to someone else)
- A perceived lack of experience (I won’t understand it so why should I waste time reading it?),
- A perceived lack of leverage (I won’t be able to change anything so why should I bother to ask?) (See Negotiating Power in Creative Contracts)
- A general faith in the decency of their business partners (Bob is my friend. Bob would never screw me with a bad contract, so why do I need to worry about it?)
In some instances, an unread contract is signed and the world does not end. But information is power, even after the contract is executed. Creative people of all types can benefit from a thoughtful analysis of their existing contracts for three reasons.
- Managing expectations: It is normal for an artist who gets a deal to expect to see a revenue stream begin to come in when his work gets released to the market. But the structure, timing and amount of payment can be controlled by different provisions of the agreement. Many contracts limit (or in some cases eliminate) your ability to get paid. If you understand this after the contract is signed, you’ll know when and if to expect some payment and you won’t put yourself in a financial hole waiting for money that might not come. (See Artistic Fantasy vs. Financial Reality)
- Managing usage of the property: You may have created your story or song, but you might not have control over it depending on what the contract says. In addition, you might have signed away the underlying elements of the work, giving your business partner control over any sequels, spin offs and other derivative works. If you understand what you do and don’t control, you’ll know if you should focus your efforts on building that particular property or creating something else that you have more control over. (See Treat Your Art Like an Investment)
- Understanding the process: Just because you sign one bad contract doesn’t mean you have to agree to the same detrimental terms with every project you do. If you use your bad contract as an educational experience, you can be better prepared to make a more lucrative deal for your next property. But you can’t avoid bad contract language if you don’t know what it is. Sitting down and coming to grips with your current deal will make you a better professional in the long run.
I counsel my clients to understand all their contracts before they are signed, while they still have the ability to accept or reject the deal (See How to Turn Down a Bad Contract) , but there is value in understanding an existing agreement, even if you’re not in a position to change it. The worst thing you can do is make a bad situation worse by sticking your head in the sand. (See Don’t Wait Until It’s Too Late)
P.S. On a completely different note, I’d like to share my own creative work with my clients and potential clients. You can get free samples of my Crime and Passion stories by visiting http://nightlifepublishing.nyc
PLEASE NOTE: THIS BLOG POST IS NOT A SUBSTITUTE FOR LEGAL ADVICE. IF YOU HAVE A LICENSEING OR INTELLECTUAL PROPERTY ISSUE, DISCUSS IT WITH YOUR LEGAL ADVISOR OR CONTACT C3 at firstname.lastname@example.org FOR A FREE CONSULTATION.