This is an excerpt from a book I’m working on called Independent Comic Book Publishing. It’s designed to walk you through the basics of creative contracts. The post is geared towards independent comic book creators, but the information is also applicable to freelance professionals and small business owners of all types. While this can’t be used as legal advice, I hope you’ll find it helpful.
If you’re a comic book creator, you already have a lot to deal with, including:
Learning your craft
Making sure you own the idea for your book
Finding money to launch your book
Building a creative and business team (See my post It Takes Two Teams to Publish a Comic),
Finding and interacting with your market
Figuring out your distribution model
Creating your book
Figuring out how to sell your book
Getting your book delivered to your market on time
Collecting the cash for your book
But what do you do about your legal contracts?
In a world of instant transactions and online business, do you really need to spend time and money on a piece of paper no one wants to read and very few people understand?
What is a contract anyway?
When do you need to have one?
What goes into a contract?
I’m going to touch on all these questions, and then talk about what happens if you don’t have the right contracts for your work.
What is a Contract?
According to the Merriam-Webster Law Dictionary, a contract is a “voluntary promise between two or more parties that can be enforced by the law”. Most contracts are written, but they don’t always have to be. A contract can be a simple, one page document or it can run hundreds of pages.
There can be a lot of different elements in a contract, but at a minimum there needs to be consideration (See my post on Consideration). If a contract is written, then it has to be signed. Everyone who signs has to have the mental capacity to sign and a legal contract can’t be made for an unlawful purpose.
Different contracts exist for different deals and scenarios.
If you’re working with other creators on a book, you’ll need an artist collaboration agreement for each creator who will own a piece of the underlying intellectual property.
If you’re hiring other freelance artists to work on your project, or if you’re working without credit on someone else’s stuff you need a work for hire agreement.
If you get an agent, an accountant, a lawyer, or a manager to help advance your career, you’ll need a professional services contract with each one of them.
If you use someone else’s intellectual property you’ll need a license agreement.
If you’re trying to land a deal with a publisher or distribution company, there’s going to be distribution contracts to deal with.
Why Do You Need a Contract?
The product of your time, effort and creativity represents value. Whether you work in comics, movies or music, your art is an asset that can generate substantial money, recognition, and influence, depending on how it is used or exploited. Of course, not every piece of art you create will make billions of dollars, but since you never know when or if your work will become the next big thing, it always pays to have contracts in place before hand.
The legal existence of your book, and your level of ownership over it, will largely be defined by the contracts you put in place. You can’t sell what you don’t own.
What can happen if you try to publish a comic book without any contracts at all? There is a chance no one could try to claim ownership of your idea, use your work without your consent, or otherwise take money that could be going to you. There is a greater chance of you losing the benefits of your work (See my post How Artists Get Their Rights Stolen).
Every creative industry is littered with stories of artists who had their work stolen and wound up making no money at all from their creations. Trying to make it as a comic book creator means taking a substantial risk. It doesn’t make sense to take a bigger risk by not protecting yourself with written contracts.
What are the Main Elements of a Contract?
Every contract is different, but they all share similar elements that I break down into four categories: basic terms, business terms, foundation terms, and housekeeping terms.
Basic Terms are often called the recitals. They answer the basic questions about the contract.
Who is involved
What their relationship is to each other
When the contract begins
Where everyone lives (or has an office if it’s a company).
Why everyone wants this contract in the first place.
Business terms are usually the part of a contract each side agrees to before they bring in a contract attorney (See my Letters of Intent post). Many non-attorneys focus on the hard numbers here, but this part of the contractual agreement also includes:
Who has to deliver goods, perform services, or transfer property rights (See my post Get What You Give)
Who has to pay for the goods, services or property, and what they have to pay (See my post Your Slice of the Pie)
If the contract isn't permanent, then how long the agreement lasts (See my Eternity in Contracts post)
Foundation terms establish the legal rules covering the business terms. In my experience, lawyers spend more time in contract negotiation on this section than in others, because depending on how the rules are structured, the business terms might be irrelevant (See my post How a Lawyer Beat Darth Vader). Foundation terms include language governing:
The definitions for specific words in the agreement.
What promises or warranties are made by each side
Who pays if the contract is broken or anyone is sued because of the contract. (See my Double Indemnity post)
Who can give (or assign) their rights and responsibilities in the contract to a completely different person (See my post Will You Accept Your Assignment?)
What happens if the contract is breached or terminated
What wider body of law (state, federal or international) will govern any dispute or litigation concerning the contract
Housekeeping terms (often incorrectly referred to as boilerplate terms) are similar to foundation terms because they define how the business terms will operate. The main difference between foundation and housekeeping terms is that they are normally not the subject of a lot of negotiation. There are exceptions, of course, but by and large these terms are widely accepted, including:
How everyone will stay in contact
Who benefits from the contract
What happens in the event of an unforeseen disaster (See my Act of God Clause post)
Confirmation that everyone who signs the contract is over eighteen, read and understood the contract and, got advice from a contract attorney.
Drafting, negotiating, and signing the contracts for your creative project might take some time and cost you some money, but you'll save money in the long-term and put both you and your book in a better position to succeed.
If you’re a comic book creator or freelance artist who has had contract issues in the past, feel free to share them in the comments below and tell us how you dealt with the problem.
Have fun with your comic.
If you have questions about the business or legal aspects of your comic book publishing and you'd like a free consultation, please contact me and we can set something up that fits in with your schedule.
PLEASE NOTE: THIS BLOG POST IS NOT A SUBSTITUTE FOR LEGAL ADVICE. IF YOU HAVE AN ISSUE WITH YOUR COMIC PROPERTY, DISCUSS IT WITH YOUR ATTORNEY OR CONTACT C3 FOR A FREE CONSULTATION.