Get it in Writing
If you are a designer you have ideas, you have talents, and you are very comfortable with do-it-yourself projects. But should you take the DIY route when you are entering into a contract? Why even bother to have a written agreement if you are dealing with someone that you trust? A written agreement is always a good idea – read on! Deanna
I recently had the good fortune of speaking with Andrea Rosenfeld, founder and CEO of Detroit Art & Business Institute, who supports the creative industries through her Mind Your Art Business educational program. Andrea is a business consultant and professional artist, and when I am not at the office or in court I am likely to be in my “tool room” or at my sewing machine. So while we “get” creative folk and their inclination to DIY, we were quick to agree that designers need to get it in writing and become better educated when it comes to contracts.
Even the act of reducing to writing what you and the other party to the agreement will do for one another will be beneficial – it will make you think through precisely what you have agreed to do and what they have agreed to do as you describe in writing the responsibilities related to the design project, collaboration or event, specify important dates, and set amounts payable. This process may point out shortcomings that lead to necessary, further conversations.
A clearly worded written agreement is so valuable. If a problem arises, you don’t spend time debating who agreed to what or immediately start spending money on a legal battle that is sure to damage the relationship that you are trying to build. Instead, you look back at your contract, you point out what your contract says, end any debate, and move forward with whatever they or you agreed to do. If you can’t resolve a dispute without engaging lawyers, a clearly worded contract increases the likelihood of settlement and if a lawsuit is necessary it is likely to be shorter and less expensive.
Does the agreement need to be signed? Generally speaking, yes, the written agreement needs to be signed to be enforced (lawyer speak for filing a lawsuit to compel a party to do what they agreed to do, in the contract). Read everything – including everything on the back of each page - before you sign! The law presumes that you read and understood what you signed. Also, beware that there are times when you could be sued even if you haven’t signed something. Sometimes oral agreements can be enforced, and certain unsigned writings, like invoices, can be enforced without a signature if, for example, you took delivery and kept the goods. Also, your signature block may turn your email into an enforceable agreement even though you didn’t pick up a pen and sign your name, so be very precise and carefully proofread your email before you hit “send.”
If you have formed an entity for your design business, and ideally you have, don’t just sign your name. A big reason for forming an entity, a corporation or an LLC, is to avoid being held personally responsible, so always sign in your capacity as an officer (ie. Joe Smith, President or Alicia Jones, Managing Member). Simply signing your name, Alicia Jones, may open you up to personal liability as a guarantor of your entity’s obligations under the contract.
Do I need a lawyer? Yes, if the contract is important to your business, having a lawyer at least review a contract before you sign it is money well spent and less expensive than you likely expect. It is much like buying insurance - you don’t expect a fire, but you know bad things can happen and you know you need to manage risks. I file and defend lawsuits to enforce contracts, dealing with everything from employment terms to the supply of high tech plastics, and I’ve seen my fair share of bad contracts. Many are the result of someone altering terms from a contract they used in a prior transaction and using forms from the internet. DIY by someone without legal experience leads to long, costly legal battles that could have been avoided with a small up-front investment. You can keep the cost down by putting in writing everything you think has been agreed to and by getting an estimate from or setting a budget with your attorney. You will also keep the cost down by dealing with an attorney that knows your industry.