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INTERPRETING ARTIST AGREEMENTS

27 March 2023

ArtsAdmin

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Know your presenters

Khushi Malhotra

Pranav Kunnanamkath

Krishna Bharathalvar

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What is qlegal?

Pro-bono legal clinic run by postgraduate law students at Queen Mary University of London, supervised by faculty and external UK solicitors.
We offer variety of free legal services –
1:1 Written Legal Advice for matters including Intellectual Property Rights like copyrights, trademarks and patents , data protection, type of business and business incorporation and a variety of commercial agreements.
Public Legal Education – Students conduct free workshops like this one to raise awareness on legal issues.
Externship & Legal Consultancy – Qlegal students provide legal and technological services to start-ups and businesses

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Topics to be covered today :

Oral v Written Agreements

Fees and Expenses

Insurance

Intellectual Property Rights

Cancellation and Force Majeure

Warranties and Indemnity

Boilerplate

Q&A

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Introduction

Contract

Oral Agreement

Written Agreement

Let us start with the basics of contracts. What are contracts? – In simple terms, contract is a legally binding agreement that creates rights and obligations that may be enforced in courts.
So, what makes a contract legally enforceable ? – Offer, acceptance ,consideration and intention to enter into argreement. So, what are these terms? Offer is as the name states, to give something, for instance a producer would offer to provide the artist with the platform to display their art. Similarly, acceptance would be the artist would be accepting the terms of the offer and would agree to provide their services. The contract is then validated with consideration that may be monetary or non- monetary. And finally, the behavior of parties indicates an intent to agree.
Now the most important bit here is that Contracts can be oral or written and all these contracts are valid before the law.
The word oral contract is self explanatory, that is something which is not written down. Oral contracts although valid in court are very difficult to enforce as they lead to uncertainty in the rights and obligations of the parties. And in such contracts when disputes arise there is nothing in writing that could substantiate as to what both of the parties agreed to do.
Now, written contracts on the other hand clearly lays down the terms and conditions of work and clearly specifies the details that have been agreed upon. These types of contracts provide you with more certainty. There are certain advantages of written contracts including but not limited to the following – 1. It is a proof of what was agreed between both the parties. 2. It leaves a room for negotiation as the terms and conditions can be read and be negotiated. 3. Avoids any misunderstanding in event of any dispute.
Now after understanding the concepts of written and oral agreements. The next thing that comes to our minds is that what happens in cases where some terms like the costs or access to the venue were agreed upon by way of oral agreements or by way of text messages or emails. In such cases, the party must negotiate with the other party and all the terms agreed upon previously must be rewritten.

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Fees and Expenses Clause

A fees and expenses clause is a provision in a contract that specifies who will be responsible for paying various costs associated with the work being performed under the contract, and how much they will be responsible for paying.
The clause can cover a wide range of expenses, such as travel costs, equipment rental fees, legal fees, and other costs associated with the work.

In addition to specifying who will pay for what expenses, a fees and expense clause may also specify how fees and expenses will be calculated, such as a flat rate or a percentage of the overall cost of the work. The clause may also specify when and how payments will be made, and any penalties that may be assessed for late payment.

For artists, fees and expenses clauses are important because they determine how much money they will receive for their work, and how much they will have to pay for any expenses related to their work. By including a fees and expense clause in a contract, both parties can have a clear understanding of what is expected of them and can avoid any misunderstandings or disputes over payment and expenses.

Fees and expense clauses are also often something that has been previously agreed by email or text and that needs to be very clearly written into the agreement

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How to Draft a Good Fees and Expenses Clause

SPECIFY THE SERVICES TO BE PROVIDED

1

IDENTIFY ANY ADDITIONAL EXPENSES

2

CLARIFY PAYMENT TERMS

3

ADDRESS ANY LATE PAYMENT FEES

4

CONSIDER INCLUDING A CAP ON EXPENSES

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CLARIFY ANY TAX IMPLICATION

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Specify the services to be provided: The clause should specify the services that the artist will provide, and how those services will be charged. This might include hourly rates, fixed fees, or a combination of both.

Identify any additional expenses: The clause should also identify any additional expenses that the artist will incur in providing the services. This might include travel expenses, accommodation, or materials. It is important to be specific about what expenses will be covered, and to set limits on the amount that will be reimbursed.

Clarify payment terms: The clause should clarify the payment terms, including when payment is due, and how it will be made. For example, will payment be made in instalments, or at the completion of the project? Will payment be made by cheque, bank transfer, or some other method?

Address any late payment fees: The clause should also address what will happen if payment is not made on time. This might include late payment fees or interest charges. It is important to be clear about what the consequences of late payment will be, and to ensure that they are reasonable and proportionate.

Consider including a cap on expenses: Depending on the nature of the project, it may be appropriate to include a cap on expenses. This will limit the amount that the artist can charge,and can provide some certainty for the producer.

Clarify any tax implications: The clause should clarify any tax implications of the fees and expenses. For example, will the fees and expenses be subject to VAT, and who will be responsible for paying any applicable taxes?

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Insurance Clause

An insurance clause specifies the insurance coverage that one or both parties to the contract must obtain and maintain during the term of the agreement.
The clause typically outlines the minimum types and amounts of insurance coverage that must be maintained by the parties, as well as any additional insureds or named beneficiaries that may need to be added to the policy.

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Example of an Insurance Clause

X have an Insurance Policy that covers anything presented at the premises of X, as well as anything presented by the X anywhere in the United Kingdom (including whilst in transit). X has both Public and Employers Liability insurance which will ensure that you are covered throughout the event in the UK. The insurance covers physical damage to stage and equipment relating directly to the performances but not loss of personal property taken by you at the show. Any additional insurance, including the safety of your private items, are your responsibility. If you encounter any loss of money relating to illness or injury whilst on the show, then it will be covered.

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Benefits of Insurance Clause for Artists

Protection against loss or damage
Protection against liability
Peace of mind
Ability to make claims
Assistance with claims

Overall, the insurance clause provides an additional layer of protection for the artist and can help to mitigate the financial risks associated with performing

Protection against loss or damage: The clause ensures that the artist is protected against loss or damage to their personal property, including musical instruments, equipment, and personal belongings.
Protection against liability: The clause can also provide protection for the artist against liability claims that may arise during the course of their performance, such as injury to a third party or damage to property.
Peace of mind: Knowing that they are covered by insurance can give the artist peace of mind and allow them to focus on their performance without worrying about the potential financial consequences of unforeseen events.
Ability to make claims: The clause gives the artist the right to make claims under the insurance policy, which ensures that they will be able to receive compensation for any losses or damages they may incur.
Assistance with claims: The clause can require the other party to promptly assist the artist in making any claims under the insurance policy, which can help ensure that the claims process is smooth and efficient.

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How to Draft a Good Insurance Clause

Identify the risks

Specify the level of insurance coverage

Identify the parties responsible for obtaining and paying for insurance

Address what happens in case of a claim

Address the duty of good faith

Identify the risks: The insurance clause should identify the specific risks that need to be insured against. This will depend on the type of project or activity being undertaken. For example, if an artist is creating a sculpture, the insurance clause might require the producer to insure the sculpture against damage or theft during transit or while on display.
Specify the level of insurance coverage: The insurance clause should specify the level of insurance coverage required. This might include a minimum amount of coverage, or specific types of coverage. For example, the insurance clause might require that the producer take out public liability insurance, or professional indemnity insurance.
Identify the parties responsible for obtaining and paying for insurance: The insurance clause should identify who is responsible for obtaining and paying for the insurance. This might be the producer, the artist, or both. The clause should also specify when the insurance needs to be obtained, and for how long.
Address what happens in case of a claim: The insurance clause should address what happens if a claim is made under the insurance policy. This might include specifying who is responsible for making the claim, what evidence needs to be provided, and how the claim will be paid out. There should also be quick notification of the claim to the insurer and limitation of damage.
Address the duty of good faith: The insurance clause should include a duty of good faith on the part of the insurer. This means that the insurer must act in good faith towards the artist and must not act in a way that is contrary to the artist's interests.

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Case Law

Castlegarth Management Ltd v Cooplands (Doncaster) Ltd [1998]

Brown v KMR Tours Ltd [1994]

Castlegarth Management Ltd v Cooplands (Doncaster) Ltd [1998] EWCA Civ 1733.

In this case, the artist was hired by the producer to create a sculpture The contract between the parties included an insurance clause which required the producer to insure the sculpture against damage or loss.

After the sculpture was completed, it was damaged during transit to the site. The artist claimed that the producer was in breach of the insurance clause because it had failed to insure the sculpture. The producer argued that it had taken out insurance, but that the insurance did not cover the damage that had occurred.

The court held that the producer was in breach of the insurance clause because it had failed to take out adequate insurance to cover the damage that had occurred. As a result, the artist was entitled to damages to compensate for the loss of the sculpture.

This case highlights the importance of including insurance clauses in contracts between artists and producers and ensuring that the insurance cover is adequate to protect against all potential risks.

Brown v KMR Tours Ltd [1994] 4 All ER 362. In this case, a musician had hired a van to transport his musical instruments to a concert. The van was involved in an accident, and the musician's instruments were damaged. The contract between the musician and the van hire company included an insurance clause which required the hire company to insure the instruments against loss or damage. The court held that the hire company was in breach of the insurance clause because it had failed to take out adequate insurance to cover the damage to the instruments. As a result, the musician was entitled to damages to compensate for the loss of his instruments.

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THE INTELLECTUAL PROPERTY RIGHTS CLAUSE�

Intellectual Property Rights are rights that are given for the creation of their respective minds. It is given to the unique expression of an idea by a person.

The form of Intellectual Property Right that applies for art is copyright. Performance art is considered as a ‘work of action, with or without music, capable of being performed’.

A limited level of protection is afforded by copyrights due to its legal requirements.

This Photo by Unknown Author is licensed under CC BY

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Fix in a tangible medium

Sound recordings
Photographs
Original Copyright Ownership belongs to the recorder and the photographer
These rights can be negotiated

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THE INTELLECTUAL PROPERTY RIGHTS CLAUSE

Related rights such as royalties arise out of Intellectual Property rights. It is one of those rights that can be negotiated between you (artist) and the organisers.
In the letter of agreement and in contracts, Intellectual Property Rights are one of the most important areas negotiated and discussed. It is important because it deals with the rights arising out of the performance and the subsequent benefits arising out of the performance and the contract.
Ownership of copyright can be transferred between parties but that must be done in writing. For example – In the contract, an assignment provision is when one party sells ownership of copyright to the other party. In contrast, a licence is when ownership of copyright is rented or borrowed.

This Photo by Unknown Author is licensed under CC BY-SA

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CANCELLATION CLAUSE

A cancellation clause deals with the course of action to be taken in the case the performance must be cancelled for one reason or the other by both the parties.
The principal objective of the cancellation clause is to ensure that the party who is impacted negatively by the cancellation is compensated. This is sought to be achieved by agreeing upon the conditions and the terms of compensation.
To understand the effect of the clause, paying attention to how it is worded is key to a better understanding.

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EXAMPLE OF A CANCELLATION CLAUSE

If the producer/organiser cancels more than 15 days before the date of the event, then the artist can retain the part of the fee that was paid to them and will not be compensated further.
If the producer cancels when there is less than 15 days to the event, then the artist is entitled to the full payment which was agreed by you and the organiser for that performance.
NOTE: The 15 days time period is for providing an example. There is room to negotiate and can be done according to your requirements.

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The Force Majeure clause

The force majeure clause deals with what to do in case the event is cancelled due to an event that is outside the control of the parties. It excuses the parties from performing the contract.

The most recent example is the disruption of events due to the COVID-19 pandemic and the outbreak of the Russo-Ukrainian war, which makes it impossible to fulfil a contract entered in the region.

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The Force Majeure Clause

A sample force majeure clause is worded like this:

”In the event that the event is closed, cancelled or abandoned in consequence of “force majeure” (i.e. abnormally inclement weather, flood, lightning, storm, fire, explosion, earthquake, subsidence, structural damage, epidemic, animal borne virus or disease, or other natural physical disaster, failure or shortage of power supplies, war, military operations, riot, crowd disorder, strike, lock-outs or other industrial action, terrorist action, civil commotion and any legislation, regulation, ruling or omission (including failure to grant any necessary permission) of any relevant government, court, competent national authority or local authority or other cause beyond the control of either party, and such event occurs within 48 hours of the performance, reasonable compensation will be provided by Productions to the artist.”

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Warranties and Indemnity

Warranties are essentially assurances that can be made by both the parties in the contract.
Warranties are promises made by both parties and should be limited to promises that you are confident you can make.
Breach of such promise would lead to legal claim for damage.
Example – 1. Not to enter any professional or other commitments that would conflict with the existing agreement. 2. Does not infringe intellectual property rights of the third party and all the necessary consents and permissions have been obtained. 3. Should not have defamatory matters, breach of contract, law or duty of confidentiality.

An indemnity is an agreement to reimburse the other party for any losses that come from one of the warranties (promises) not being true or a breach of the agreement (such as non-performance of a service)
Indemnity means a promise to pay money to the person with whom contract has been made if the contract is breached.
Indemnity is an agreement to cover the costs if any of the warranties (promises) that you make are not kept.
It is a best practice to also limit the amount of your indemnity.

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Sample Clause -

You hereby warrant, represent and undertake to us that:
You are free to enter into and to perform this agreement and have not entered and shall not enter into any professional or other commitment which would or might conflict with or prevent you both from doing so;
You have obtained all necessary consents and permissions to take part in the ______ and they will not infringe the copyright or any other rights of any third party;
Your performance on the _______will not contain any defamatory matter nor breach any contract, law or duty of confidentiality;
You hereby indemnify us and agree to keep us fully and effectively indemnified against all actions, costs, losses, claims and expenses of whatsoever kind or nature arising from any breach or non-performance or threatened breach or non-performance by you of any of the warranties, representations, undertakings or obligations in this agreement.

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Revised Clause

You hereby warrant, represent and undertake to us that:
You are free to enter into and to perform this agreement and have not entered and shall not enter into any professional or other commitment which would or might conflict with or prevent you both from doing so;
You have obtained all necessary consents and permissions to take part in the Weekender and they will not infringe the copyright or any other rights of any third party;
You hereby indemnify us and agree to keep us fully and effectively indemnified against all actions, costs, losses, claims and expenses of whatsoever kind or nature arising from any breach or non-performance or threatened breach or non-performance by you of any of the warranties, representations, undertakings or obligations in this agreement.
The maximum aggregate liability of the artist in respect of all warranties shall not exceed the artist’s fee decided for the event.

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Boilerplate

Entire agreement and variation

1. This agreement constitutes the whole agreement between the parties and supersedes all previous agreements between the parties relating to its subject matter.

2. No variation of this agreement shall be effective unless it is in writing and signed by the parties (or their authorised representatives).

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Summary

Oral v Written Agreements

Fees and Expenses

Insurance

Intellectual Property Rights

Cancellation and Force Majeure

Warranties and Indemnity

Boilerplate

Q&A

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Time for Your Questions!��To apply for individual legal advice from qLegal, please go to this website:� http://www.qlegal.qmul.ac.uk/advice/