Dissecting the Terms and Conditions Document, Part III
This insight was originally published on October 19, 2015
On a few recent projects, we have spent a lot more time than usual reviewing specific terms and going back and forth with both agencies and lawyers to come up with language that works for everyone. During these particular projects, I often felt at a bit of a disadvantage when there were lawyers involved and wishing we had one of our own to help navigate our point of view.
I figured we were not alone in this thinking so asked attorney Linda Joy Kattwinkel of Owen, Wickersham & Erickson, P.C. if she would help dissect a generic Terms and Conditions Document that we can share with our readers. People were so appreciative of the information she shared regarding Copyright, we figured they would feel the same about Terms and Conditions. For more information about copyright, review this valuable post from pikwizard.com.
The documents are a bit long and dense, so we are breaking this series up in a few posts. Our first post reviewed items #1-#5. Our second post addresses items #6-#10. And, our post today addresses #11-14. If you have any questions, please leave them in the comments or email us directly. We will do our best to get them answered for you.
The format we thought most helpful would be to 1) review the term 2) translate the term into layman’s language and 3) ask any relevant questions.
#11. CONFIDENTIALITY. Supplier covenants and agrees that it will not disseminate, reveal, or otherwise make available to others, or use for its own purposes, any information of a proprietary or confidential nature concerning Agency or Client, learned by Supplier in the course of fulfilling this PO, regarding, but not limited to, trade secrets and confidential information, advertising materials, ideas, plans, techniques, and products.
Translation: “Confidential” means information about the agency or the client that they consider their private valuable property, and they do not want you to use or to disclose to anyone else. Generally, this is about not using what you learn about the agency or the client to compete with them, e.g., client contacts, pricing structures, vendors, the nature of the advertising campaign you are being hired for, etc. This is a standard provision. You may also want to ask for Mutual Confidentiality, which means a client cannot share what they learn from you during the process either.
• Does this pertain to the timeline in which I can share the images for self promotion? If not, where is a good place to include this information?
No. You should include a provision allowing you to show the images for self-promotion as a separate provision. In the context of this contract, put it on the front of the P.O. (because Section 4 says anything changing copyright ownership and use has to be on the front of the P.O.).
#12. ASSIGNMENT. The fulfillment of this PO, or any sums payable hereunder, may not be assigned by Supplier without the prior written consent of Agency.
Translation: You cannot hire another photographer to do this project, and you cannot assign to anyone else the right to receive payments due to you for this project.
Is this typical?
Yes, it is typical to say you cannot hire someone else to do the shoot. Presumably you were chosen because of your particular skills. No, it is not typical to prevent you from designating someone else receive your payments. That is generally allowable because it’s just a matter of where to send checks.
#13. EXPENSES; AUDIT. In the event that pursuant to this PO, Supplier is entitled to reimbursement of expenses, said expenses must be substantiated, except for local taxi fares and gratuities, by (a) subcontractor invoices and/or vouchers, together with evidence of payment, and (b) a final and complete detailed itemization of each expenditure for which reimbursement is requested. All props or other material for which reimbursement is sought must be delivered to Agency prior to payment therefor. All expense discounts must be passed on to Agency. All expenses, except those of an incidental nature, must be in accord with prior estimates approved in writing by Agency. Agency shall have the right to audit those financial records of Supplier which pertain to the material specified on the front of this PO, during ordinary business hours on not less than two (2) days’ prior notice.
Translation: If the PO says you can charge for your expenses, you have to give documented proof of the amounts, except for taxi fares and tips. The documents must be:
(a) invoices from people you are paying and evidence that you actually paid them;
(b) a final itemized statement of all of the expenses
If you charge for props or materials, they must be delivered before the agency will pay for them. If you get a discounted price, you must charge the discounted price to the agency. Your expenses cannot be more than the estimates that you gave the agency for approval, except for small incidental changes. The agency can audit your books to confirm the validity of your charges for expenses. The agency must tell you 2 days before they do the audit.
Is this typical?
Yes, except that audits are normally conducted with more notice than 2 days. Ten days’ notice is more reasonable. You might be scheduled for another shoot and may not be able to accommodate an audit on 2 days’ notice.
#14. GOVERNING LAW. The provisions hereof shall be interpreted in accordance with the laws of the State of California.
Translation: If you have a dispute with the agency (e.g., the agency objects to an expense or does not pay you, or they demand that you shoot more than agreed upon without approving additional fees), California laws will be used to interpret the contract and resolve the dispute.
• Is this typical?
Yes, this is a standard provision: all contracts should identify what law will be used to decide disputes. California’s contract law is pretty good, especially for visual artists. Any ambiguities about ownership are resolved in the artist’s favor.
What to do if you have your own terms and conditions, but the Agency’s P.O. has different terms:
Remember the very first provision of our sample P.O. said that the Agency’s P.O. supersedes your terms:
#1. ACCEPTANCE. This order is subject to all the terms and conditions stated herein. If any terms contained in supplier’s acceptance of this order or in supplier’s invoices are at variance with the terms of this order, the terms of this order shall govern. No oral agreement or other understanding shall in any way modify or change the terms of this order unless agreed to in writing and signed by Agency.
Most P.O.’s that have terms and conditions attached to them will have language like this. Even if a particular P.O. doesn’t have such language, it is important to be clear that YOUR terms and conditions still apply.
Cross out any language that says the P.O. terms supersede anything else, and substitute “This order is subject to the terms and conditions of supplier’s proposal [or use the same term you used on the original document in which you stated your bid, e.g., “Estimate”] as accepted by Agency on ____________ [date]. If any terms contained herein are at variance with supplier’s proposal, the terms in supplier’s proposal shall govern.”
You can explain to your contact that they entered into a legal contract when they accepted your proposal. The Agency’s subsequent Order with different terms and conditions is an offer to change the terms of that contract, which you are not agreeing to. For example, if your proposal was for limited usage, and the Agency wants a copyright assignment (per No. 4 of our sample P.O.), then your original pricing does not match their new request for all rights. The Agency needs to accept the original scope of usage rights or agree to pay your higher fees for a complete copyright assignment (also sometimes called a “buyout”).
Some photographers are tempted to ask the buyer to revise the Agency’s P.O. so it matches the photographer’s terms. Generally, that is NOT a good idea. The buyer (or Agency, whomever marks up the P.O.) could miss some of your terms or rephrase them in ways that could be detrimental to you. Also, you don’t want to agree to a new contract; you want your original contract with your original terms to remain the valid agreement.
Linda Joy Kattwinkel is an artist (painter) and a lawyer for artists with the firm of Owen, Wickersham & Erickson, PC in San Francisco. She was an illustrator and graphic artist before she became an attorney. She helps her clients with licensing and contracts, and has successfully prosecuted and defended many infringement claims on behalf of photographers. Some of her local photographer clients include Jim Marshall’s estate, Jim Erickson, Steven Sommerstein, Charles O’Rear, Max Fallon, Dennis Anderson, Caren Alpert, and Elena Kulikova. Other prominent clients in the visual arts include Craig Frazier, Michael Schwab, Howry Design, and Hello Kitty.
Ms. Kattwinkel is the author of Legalities, an online column on legal issues for artists and designers for AIGA|SF, http://www.owe.com/resources/legalities/, and various published articles. She can be reached at [email protected].
Thank you Kremer/Johnson for the use of your image.