Part 1 will focus on the basic
components needed to create or interpret a contract or agreement. More and
more, these documents have become a required piece of an illustrator’s assignment. This is an article
intended to help illustrators deal with agreements and contracts.
An "agreement" is most often in the form of a contract,
and a contract is an arrangement between two or more entities that creates a
legal obligation to do or not do a particular thing or things. Although many
clients have contractual agreements they present to illustrators when
initiating a job, illustrators should also consider developing their own
contract to address the issues that take place in the course of an assignment. Although
the component explanations below may be long, in practice, each section of an
actual agreement or contract may only be a sentence or two.
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| © 2012 Don Arday. |
Agreement Title
The agreement title can be just about
anything, but it is best if it contains the project title. For those who use a
job numbering system, it can contain a job number. For example: PH0012 –
Parkland Hospital Pathology Brochure Illustration.
Project Description
This should be a concise description of the
work to be provided. For example: One full-page, full-color, cover
illustration, and two full-color, interior half-page illustrations for the 2012
Eaton Corporation Annual Report to Shareholders.
Usage and Leasing
Usage, as it implies, defines any limits that
are to be placed on the publication or distribution of the illustrator’s work. Usage
is a vital component in a contract or agreement. Although created for an
individual client and a specific use, in most cases, the work is being “leased”
by the client for a specific limited term. There are also non-lease situations
such as “buyouts” and “work-made-for-hire”. See the Intellectual Property
component below. Any conditions of the usage and usage term should be spelled
out in writing. Usage limitations can be based on quantity, time, location, or
any combination. Here are examples.
The Parkland Hospital Pathology Brochure
Illustration usage is limited to an initial print run of 5,000 copies. So, reprinting the brochure would require a
renegotiation of usage, i.e., an additional fee.
Time-Based Example
The illustrated character for Coca-Cola usage
is restricted to print advertising for a period of two-years. So, migration of the character to the web or
broadcast media would require a renegotiation, i.e., an additional fee.
Location Example
The promotional poster illustration for
Fidelity Investments usage is limited to internal display in Fidelity offices
in the US. So, a distribution of the
image to the public would require a renegotiation, i.e., an additional fee.
Agreement Timeframe
It's extremely important to spell out the
time frame, i.e., schedule for the project activity. This can be done in terms
of time such as days or hours, or it can be done using actual dates. Naturally,
a project's timeframe will reflect the complexity of the assignment. Multiple
image assignments may have multiple sketch approval and delivery dates. Here
are two sample timeframes:
Date Model
Start Date: 1/15/13
Sketches: 1/20/13
Input or Approval from Client: 1/22/13
Revised Sketches: 1/24/13
Approved Sketches: 1/26/13
Delivery of Finished Project: 2/03/13
The date model is used for assignments that
have a finite inflexible delivery date, such as time sensitive publications for
events. So it’s important to have the dates nailed down in the contract. This
works well when all parties agree and sign off on the schedule. A date-based
schedule helps decision makers to comply with the schedule dates. One
unfortunate consequence for illustrators when using the date model is that clients
who don’t abide by the schedule are often also unyielding when it comes to the
delivery date. This shortens the amount of time available to produce the work.
Time Model
Start Date: Notification
of Approval to Begin
Sketches: 5
Working Days
Input or Approval from Client: 2
Working Days
Revised Sketches: 2
Working Days from Input
Approved Sketches:
Delivery of Finished Project: 7
Working Days from Approval
The time model, which is based on the amount
of time it takes to complete each stage of a project, provides some protection
for the illustrator when a client decides to prolong their part of the decision
process. When this happens is quite common for the final delivery of the work
to be adjusted according to the amount of additional time that has been taken
up with any delays. I have had far greater success using the time model
because, by its very nature, it necessitates a flexible delivery date, and most
clients understand this.
Timeframe Penalties
Be aware, some contracts for time sensitive
projects specify a monetary penalty to the illustrator if the work is not
completed on schedule. Fortunately this is relatively rare, and usually is tied
to large multi-vendor, multifaceted projects.
Agreement Beneficiary
All companies or persons who will receive a
benefit from the services provided should be listed. It is very common for an
ad agency, design firm, public relations firm, or marketing company to
outsource an illustration assignment on be half of a client. Sometimes more
than one company may be involved. All parties should be considered
beneficiaries. For example: Creative Soup (the design firm) contracted by
McCann Erickson (the ad agency) on behalf of Coca-Cola (the client).
Expertise Provided
This can be stated simply as
"Illustration", or it can be written more specifically. For example:
Dimensional Illustration, or Digital Illustration for the Technology Market, or
Illustration and Design for Packaging, etc.
Services Provided
Services provided is an expansion of the
project description that includes working process and description of
deliverables. For example: Subject research, concept, design and layout, two
proposal sketches per image subject, one round of revisions per subject, final
illustrations, and delivery of digital image files.
Agreement Start Date
The start date is usually when one or more of
the following occur: When the contract is signed, when the job compensation is
agreed upon, when project input is delivered, and/or when delivery deadline is
set.
Compensation
Payment for services can be in the form of a
lump sum payment, a schedule of
payments, a fixed wage (hourly rate), a sales commission, or a trade of goods
or services, a combination of types of compensation.
Lump Sum Compensation
Lump sum compensation can be in the form of a
single payment due at a specified time when the commission is completed. For
example: $2250 due upon delivery of finished art. It can also be broken down
into installments to occur during the course of the commission and/or after.
For example: 50% payment due ($1125) when sketches are approved and 50% payment
due ($1125) when the commission is delivered.
Hourly Rate Compensation
Some types of commissions call for all, or
part of the compensation to be in the form of an hourly rate. For example: $20
per hour (20 hour maximum) for development and completion of Fidelity Mortgage
Illustrated Pie Chart. Service type work and the non-creative portions of a
project can also be billed by the hour in addition to a lump sum for the create
work and finished art. For example: $20 per hour (5 hour maximum) for digitizing
traditionally produced artwork, digital file preparation for reproduction, and file
or image duplication, etc.
Commission Arrangement
Taking payment for work in the form of a
sales commission is an option, albeit a risky one. Commissions are usually a
low percent in comparison to the value of the commodity being sold. In essence
a fair wage becomes dependent on high volume sales, and high volume sales in
some cases are hard to predict.
Exchange Arrangement
Compensation may also be arranged in the form of an exchange of services or goods. For example: One set of Cartier Trinity Platinum (Item CTP 3414) pens and pencils in exchange for the cover illustration for the Fall Colorado Pen Company Catalog.
Kill Fee
A kill fee is a specified amount to be paid
to the illustrator in the event that an assignment is discontinued after the
illustrator has been given the go ahead and begun work. This happens more often
than any of us would like, so it’s important to have the kill fee spelled out. For
example: An assignment discontinued during the sketch stage would incur a fee
of 50% total payment. An assignment discontinued during the final art stage
would incur a fee of 100% total payment.
Schedule for Payment
A clear statement of when you should be paid.
It is best not to leave this aspect of compensation undefined. And, although it
now seems fashionable for clients to delay payment much longer than they
should, a payment schedule can be very effective at keeping receivables on schedule.
For example: Payment due 2/28/2013. The same due date should be reflected on
the job invoice.
Intellectual Property Right
The intellectual property right refers to the
ownership of the copyright of an illustration. Simply put, the right to control
the usage of an illustration. The illustrator is the copyright owner, which
should be plainly stated in the agreement or contract -- unless the copyright
was sold in a buyout, assigned over to another party, or the work was produced
under a work-made-for-hire agreement. For
more information on intellectual property see “Copyright Intellectual Property”
posted 11/6/12. For more information on work-made-for-hire see “10 Digital Art
Copyright Definitions” posted 9/11/12.
Expenses
Materials Expenses
Material expenses can be either the
responsibility of the illustrator or the client. Usually, this is factored in
to the overall payment for the project, in which case the illustrator is
responsible. However there are sometimes expenses that occur beyond the norm. For
example: The painting of a mural might require a substantial outlay for
materials such as paint, brushes and cleaning supplies.
Outsourced Expenses
Outsourced expenses can be either the
responsibility of the illustrator or the client. An outsourced expense is one
that requires the use of a service or hiring of a person or company. For
example: Hiring a model to use for reference photos, or purchasing reference
from a stock photo agency, or hiring a photographer to photograph the final
work for digitizing.
Resources Support
In lieu of expenditure, many clients will
provide resources in support of a project. It is advisable to make arrangements
for, and list, any resources you feel the client should provide to you. Publishers
will often provide reference photos, and clients in manufacturing will furnish
products that need to be illustrated. I’ve had machine parts, high tech
gadgets, and toys provided. I even had an actual Emmy award statue sent to me.
Company Support
Company support is usually in the form of
office space, company access, or company staff services.
Contacts
Assignment Initiation Person
This is usually the person who is working
directly with the illustrator. Most commonly it is a designer, art director,
creative director, account executive, marketing person, author, editor, company
executive, or the company owner.
Assignment Authorization Person
This may be the assignment initiation person
or a secondary person within an organization. For example: A magazine editorial
assignment is usually “initiated” by an art director, but the magazine’s editor
is the “authorization” person. It’s usually the editor that grants final approval
of an illustrator’s work.
Financial Contact Person
It is extremely important to have all contact
information for the person the invoice is sent to. It may be the person that is
the assignment initiation person, i.e., an art director, or it may be an
entirely different person within the company. And, it might even be a person at
an entirely different company. For example: When an illustrator is hired by the
agency or design studio on behalf of a client, but must bill the end client
directly. It is my recommendation that this kind of situation be avoided at all
costs. He agency or studio should be responsible for compensation, and most
are.
Agreement End Date
The agreement end date should be stated in
advance. It may be when the project has been delivered and payment has been
received or it may not. It is altogether possible for an end date to extend
beyond the point of completion. For example: The restricted nature of some types
of assignments may be subject to a confidentiality restriction that extends far
beyond the completion of the work. A situation may also occur where an
illustrator may be bound by a limited non-compete restriction. For example: In
producing a character illustration for Coca-Cola, the illustrator agrees not to
produce a character illustration for any other soft drink company for the period
of two years. As an option, agreement end dates can also be made renewable. For
example: Coca-Cola may wish to extend usage of an illustration for an
additional period of time. For a negotiated fee, the extension might also
include lengthening the non-compete restriction.
Assignment Approval
Last but not least, a statement approving the
project and the terms specified in the contract with a start date. Lines for
authorization signatures and signature dates should be included for
both the client and the illustrator.
