Contracts 101: Overview of photography contracts

Topic: Contracts
Time Investment: 7 Minutes
Suggested Product:  All-in-One Contract Bundles

 

A contract should be utilized with every client your studio elects to serve.  A good contract is the backbone on which a good photographer/client relationship rests. It should expressly state the duties and obligations of each party to the contract, outlining the expectations of both parties.

However, in order to create a good contract, a photographer must understand the “nuts and bolts” of what composes a contract. You, as a photographer, must understand the elements of a legal contract, how these elements interact, and what elements the contract should include.

 

Contract: A Basic Definition

According to Black's Law Dictionary 4th Ed., the go-to guide for legal definitions, “a contract is an agreement between two or more parties, which creates duties and responsibilities between the parties which are otherwise not enforceable by law”.  A contract is literally all parties to a contract agreeing to create laws, through the use of duties and responsibilities, which apply only to the parties to the contract.

Example: Sherri is a photographer, and Billy is her client. Before Sherri will take photographs for Billy, Sherri asks that Billy sign a contract. Billy, upon carefully reading the contract, agrees to its terms and conditions and duly signs the document. Assuming that it is a valid contract, both Sherri and Billy have just agreed to be governed by the laws of the contract; laws that each, absent the contract, would not have to abide by.

 

The Uniform Commercial Code and the Restatements of Contracts

These two bodies of work are the “model” rules for contracts. However, each state has its own unique contract law. Typically, these contract laws build off of the model rules. But, the rules may deviate in significant ways from the model rules. For the purposes of this book, I will simply tell you what type of contracts each apply to.

• Uniform Commercial Code

The Uniform Commercial Code is commonly referred to as the UCC. As its name suggests, it is set up to govern commercial transactions for the sale of goods. If Bob manufactures Tripod X and sells 10 Tripod Xs to Sue, then the UCC will apply to the contract.

• Restatements of Contracts

The Restatements apply to service contracts and contracts for the sale of real property. As a photographer, you are selling your services to another. Thus, your contracts would be governed by state-specific laws based, at some level, off of one or another edition of these rules.

Currently, the Restatements are in their 3rd edition, with a 4th edition written, but not adopted. However, numerous states still use laws based off of the second edition. Once again, you will have to look at your individual state's laws regarding contract rules and regulations.

 

The Elements of a Valid Contract

The contract in its simplest form is composed of three elements:

(1)  An Offer,

(2)  An Acceptance, and

(3)  Consideration.

This sounds quite simple, but there are literally thousands of cases, statutes, and regulations which govern contractual disputes. To further muddy the waters, there are Federal contract laws and then each individual state also has its own contract laws.

 

What is an Offer?

An offer is when the offeror, the party offering services, indicates her intent to enter into a contract with another party, called the offeree, the party receiving the offer. An offer can be made to a specific individual or just a general offer of services to any interested party.

Example: Sherri places an ad in her local paper which states her willingness to provide 1 hour of studio time for $50.00. Sherri has made a valid offer. Sherri has expressly indicated that she is willing to take $50.00 in exchange for an hour of her services as a photographer. This is an open-ended offer and can be accepted by any party who might be interested.

 

What is Acceptance?

Acceptance occurs when the offeree, the party receiving the offer, unequivocally through word or action, indicates that she accepts the offer.

Example: Donna sees Sherri's newspaper ad offering 1 hour of studio time for $50.00. Donna decides to accept the offer. Donna calls up Sherri and states that she wants to purchase 1 hour of studio time. When Donna provides Sherri with a payment of $50.00, her acceptance of the offer has been completed. Donna, through her words and actions, has unequivocally communicated to Sherri the acceptance of her offer.

 

What is Consideration?

Consideration is my favorite part of a contract. It is where one party receives something of value from the other party in return for the receiving party performing or refraining from, some agreed upon action. It means a detriment to the person who made the promise and a benefit conferred onto the other party. (It's where you get paid for your work.)

If you have all three of these elements, Offer, Acceptance, and Consideration, a valid contract has been formed.

 

Automatic Invalidation of a Contract

When a contract has been formed, it is presumed to be valid. However, the presumption can be overcome if the complaining party can prove that the contract was the result of undue influence or duress, fraud, or a material misunderstanding.

 

Undue Influence or Duress:

Undue influence speaks mainly to an individual's capacity to make a contract. If you have a mentally challenged client, who you pressure by some means into forming a contract with you, then that contract is invalid and can be set aside by a court. Arguably, the client lacked the capacity to agree to the contract.

Duress is self-explanatory. If one party agrees to a contract because the other is exerting some negative external force to influence the other's decision, then a court will set aside that contract. More simply stated, if someone is holding a gun to your head and yelling at you to sign a contract, that contract will be set aside and voided by a court of law.

 

Fraud:

This is when one party to a contract is intentionally deceived by the other party to the contract, so that, based upon the deception, the non-deceiving party agrees to enter into the contract. If someone lies to get someone else to sign a contract, the court will set aside and void the contract.

 

Material Misunderstanding:

This is a really fancy way to say that if one or all the parties to a contract misunderstood the terms of the contract, then no contract has occurred.  One of the tenants of a contract is both parties have a “meeting of the minds”.  Absent this; a court will set aside and void a contract.

A good example of a material misunderstanding is found in an old English Case, Raffles v. Wichelhaus. This case took place around 1864 and involved a contract to ship cotton to Wichelhaus. A ship called the “Peerless” was to carry the cotton from Bombay, India to Liverpool, England.

Unfortunately, unbeknownst to either party, there existed two ships named “Peerless”, both of which were carrying a cargo of cotton from Bombay to Liverpool. One ship was scheduled to arrive in Liverpool in October and the other in December.

Wichelhaus believed he had bought the cotton on the ship arriving in October. Raffles believed he had sold the cotton arriving on the ship in December. As such, Wichelhaus refused to accept the cotton sent on the ship arriving in December. Raffles then sued for a breach of contract.

Ultimately, the court held that no meeting of the minds had occurred. This meant that no contract ever existed. Therefore, the court could not set the contract aside as no contract had ever been formed. So, neither party owed recompense to the other for a breach of contract.

 

Terms and Conditions to Include in Your Photography Contract

The following examples of the terms and conditions (T&C) your contract should have are not exhaustive. It merely hits upon what I consider the high points.

 

Merger Clause:

This clause will state that the contract reflects the agreement between the parties in its entirety and supersedes all previous negotiations or agreements.  It applies what is known as the Parol Evidence Rule. This has nothing to do with Parol, in the get out of jail sense. It just means that no other side agreements by the parties to a contract matter. In order to interpret contractual duties, the parties may only look within the “four-corners” of the contract.

 

Transactional Specifics:

This is not a title of a clause; it is just an admonishment that, at the very minimum, your contract should include the specifics of the transaction. Including party names, photographer names, when money is to change hands and how much is due, and the promised product that is to be given in exchange for the money.

*REMEMBER: If someone is a minor, have their parent or legal guardian sign the contract. Otherwise, the contract is not valid.

 

Cancellation Policy:

This policy is very important, it functions to protect your time and to keep down unexpected overhead. Be upfront with your client and specifically point out this provision. Make sure the client understands that a last minute cancellation or a no-show will result in a fee; informing someone after the fact can lead to a bad taste in their mouth and will result in bad word of mouth marketing.

 

Late Policy:

This functions the same as Cancellation. Let your clients know your policy on running late to a shoot. There is no right or wrong policy; just be consistent.

 

Expectations:

Outline all the expectations of each party to the contract. E.g. turn-around time for the photos/product, guarantee that the product is of a particular quality, the method and time-frame for delivery, how long the client has to order.

 

Do not edit/reproduce:

This section really fits under the “copyright” section. However, I think it is important to specifically draw attention to this provision in a contract. Including it in a copyright section makes it more difficult for a client to find.

In today's technological age, everyone has photography editing tools at their fingertips. Even using a Facebook tool to crop a photograph for a profile picture is compromising the integrity of the photograph as the artist intended.

Many clients confuse copyright or print releases with “do not edit/reproduce” sections. The client may honestly, or dishonestly, believe they have the right to edit their photographs because they are in them. Maintaining copyright ownership and explicitly spelling this out will work to preventively nix any possible issues before they arise.

Further, expressly outline that scanning a photograph violates copyright law. This section may seem asinine or overkill, but trust me; you have got to protect your end product. A badly edited or photoshopped picture from your studio can send potential clients running for the hills.

 

Copyright:

This clause can release or transfer the copyright from the photographer to the client. If you transfer the copyright by contract, then the photograph no longer belongs to you, the photographer. It also effectually means that you may never utilize the photo again, even for advertising purposes, as the client now owns it outright. It is important to ensure there is a provision to protect your artistic property and keep your copyright intact.

 

Model Release:

This provision functions as a legal release that is signed by the subject, or in the case of a minor, by the parent or guardian, of a photograph. It grants permission for the photographer to publish the photo in one form or another, typically for marketing purposes and portfolio materials. ** I cannot emphasize the importance of this provision enough when dealing with minor children. **

 

Substitute Photographer:

This mostly applies to photographers who photograph a large number of weddings but is relevant to all photographers. This provision becomes imperative because, well, life happens! You want to be able to have a second photographer take your place in the case of an emergency. I personally emphasize and explain this T&C to all my brides. No bride will appreciate being surprised on her wedding day by an unknown photographer.

 

Severability Clause:

This is important for photographers who practice in multiple states; where a provision of the contract may be valid in one state but not valid in another. If one clause of the contract is invalid, legally unenforceable, a severability clause will preserve the rest of the contract.

 

No Liquidated Damages Clause:

Liquidated damages is a reference to all possible financial losses, known or unknown, that would occur as a result of a party not fulfilling their part of a contract. You want a clause specifically delineating that you will not pay liquidated damages.  Otherwise, an irate bride in a bad situation may decide to become litigious and sue you for everything you have and more. It effectively helps limit your liability.

 

What Else Do I Need to Know?

My number one advice is not to sit down and search the internet for “how to draft a contract”. You and the internet may be able to parse together a document, brimming with legalese and good intentions, which will fail miserably in its application.

Start by sitting down and specifically thinking about what you want to tell your client. Outline it by hand on a piece paper; thorough preparation makes everything run smoother. Contracts should not be in flowery legalese; they should be straightforward and to the point.

As always, I recommend having a local attorney look over your final document. But remember, this is YOUR business — you have the final say in what you want covered.

If you find a contract online, be careful. Do not blindly download it and use it for all your clients. You don't want to be operating under a contract that is working against you or one that your client considers unfair. Balance fairness with protecting yourself and your studio.

Want to learn more?  Read part 2, Contracts 102!