Contracts 101 - Resource Guide for Artists

[aeshnidae]

Wait, this isn't free advice? I better stop reading now

LOL! Guess I should have chosen my words more carefully!

Once I post the demand for payment letter template, I'll try again with the PDF. I agree the Tutorials/How-To section would be a good place for this thread to live. I'm happy to have it continue on as a Q&A for general guidance, too.

Thanks for the rep!

[ladiestorm]

Thank you so much for all of this! I admit, some of the legal wording I don't quite understand, but at least I know, now, that there is someone I can talk to for answers to specific licensing questions.

In fact, I have a couple of questions I would like to ask you now, if that's okay? And these questions might help others down the road. I've been looking for 'standard' limited use licenses for commissions, but I haven't really been able to find what I'm looking for. And the thought of having to write my own is.... daunting to say the least!

I have a commission I've been working on for over a year now. I want to include a limited use license for a map I'm making to a couple of authors who are writing a book. Now I agreed to do the commission free of charge, because I know these authors are doing this project on a shoe string budget. (As a fellow self published writer, I know how stressful that can be, especially on the wallet!), however... I also feel I should have the right to payment if this book really takes off... for example if it becomes mass produced by a third party (publishing company), or if it goes into mass reprint (different languages from that of the authors). Because this is 'pro bono' work initially, I'm retaining the copyright. So how would I go about writing a limited use license with that scope? I live in the state of NC, btw... I'm not sure where they live.

The second is on a commission I've just accepted. It will be a paid commission for private use (roleplaying campaign). Again, I will be retaining the copyright, and allowing client to use and distribute among his group for the sake of his game. He has initial creative input (there are certain things that have to be in certain places, and certain criteria has to be met ie: wall around the city, with 4 gates, etc) but he's leaving most of the creativity up to me. I have no problem allowing him to use the map I'm making for his group considering the amount he's paying me to make it. But if someone else approaches him to use the map I've made for his use (for what ever reason), I feel I should have the right to request the new person be directed back to me to purchase the right to use the map I've made. First, would this be considered reasonable, and second, how would I go about wording that? Follow up, since he will be paying me in installments, would it be reasonable to indicate that the product will be delivered once I'm paid in full?

[aeshnidae]

This post is intended for general information purposes only. It does not constitute legal advice and does not establish an attorney-client relationship. If you need legal advice, please contact an attorney directly. Many states have pro bono programs to assist artists.

Gotta include the above statement for legal reasons. Unless you live in Maryland, I cannot provide legal advice about a specific situation. But I can provide general information about the law without running afoul of licensing regulations, so let me talk generally about some intellectual property issues: non-commercial versus commercial licenses, use limitations, and bonanza clauses.

As I mentioned in an earlier post, your maps are your intellectual property (IP); you hold the copyright in them the moment you create them. When you take commissions for maps, you can assign your copyright to the person paying you (which is what happens if there is “work for hire” language) or you can license your copyright. Remember that if you assign your copyright or exclusively license it to someone, you can’t use that map at all – you can’t even post it on your website – unless you retain a license for yourself.

For the rest of this post, I’m occasionally going to use “Commissioned Work” to refer to the map you’ve made for a client. You can call it whatever you'd like, just define the term (see my earlier post about contract definitions).

Commercial v. Non-commercial License, Use Limitations
Licenses can be for commercial use or non-commercial use. Getting paid for a commission does not mean you have to also grant a license beyond a limited use non-commercial license (you don’t even have to grant that, but clients reasonably expect it). You can think of it like buying a car – you pay a set amount for the basic car, but if you want weatherproofing and special rims, that’s extra. It’s the same for a commission – the client is buying the basic map (or digital image of the map), but if they want to use it for special purposes, that’s extra.

Here’s some possible language for the grant of a non-commercial license: “Cartographer hereby grants to Client a non-exclusive, non-transferable, non-sublicensable, world-wide, perpetual, paid-up, royalty-free right and license to use the Commissioned Work for non-commercial purposes.”

Here’s possible language for the grant of a very broad commercial license: “Cartographer hereby grants to Client an exclusive, [OPTIONAL: royalty-bearing,] world-wide, perpetual, non-transferable (except as a sublicense), sublicensable right and license to the Commissioned Work to make, have made, use, sell, offer for sale, market, lease, import, have imported, or otherwise exploit the Commissioned Work.”

You can place limits on both commercial and non-commercial licenses. For instance, let’s say your client wants to use the map for her D&D game. That’s a non-commercial use. But if you want to limit your client to using the map ONLY for her D&D game – maybe you don’t want her to post it on her website or give it to someone else to use in their game – you can limit the non-commercial license to game use only. If so, you could say “Cartographer hereby grants to Client a non-exclusive, paid-up, royalty-free license to use the Commissioned Work solely for the purpose of Client’s non-commercial D&D campaign.”

Another limit might be geographical – you’re licensing your map only for use in the United States, for instance. Or temporal – you’re only licensing your map for a period of 2 years. The more limitations you apply, the less a client will want to pay for the license, so keep that in mind.

That said, if there is any chance your client will make money from the map, you should consider charging for a commercial license. You can charge an initial licensing fee, an annual licensing fee, and/or royalties. The royalties can kick in immediately, so that you get a certain percent of every sale, or they can kick in once the client hits a certain number of sales. The annual licensing fee can kick in later, too. Basically you can structure payments and fees in any way you want (although your success at getting clients to agree to hefty payments and fees will vary). If I were making a map for a private individual to use in his personal game, or to hang on his wall, I wouldn’t charge a licensing fee at all; I’d just wrap everything up in the overall cost of the map. But if I were making a map for an author who sells a good number of Kindle books, I might consider charging some type of fee and/or royalty. And if I were making a map for a company, I would absolutely charge an initial licensing fee and would also consider annual fees and royalties. A lot of this will depend on how “in demand” you are as an artist and who your client is.

Here’s an example of license fee language: “Client shall pay an initial non-exclusive license fee of [insert dollar amount] within thirty (30) days of the Effective Date of this Agreement. Client shall pay an annual non-exclusive license fee of [insert dollar amount] on [insert month and day] of every year during the term of this Agreement.”

Here’s an example of royalty language: “During the term of this Agreement, Client shall pay to Cartographer an earned royalty based on the total net sales of any product containing the Commissioned Work. The royalty rate to be paid shall be [enter percentage – usually 1% or 2%]. Client’s obligation to pay royalties shall continue until the expiration of Cartographer’s copyright.”

Bonanza Clauses
What if you want to help out a fellow artist and are willing to work for free, but want to get compensated if the client makes a boatload of money? Bonanza clause are a great way to work free of charge or at a reduced rate but guarantee that if your client starts making a bunch of money off your map, you will get to share in the success.

Here’s some bonanza clause language that could be added to the Royalties section of a license agreement: “If the cumulative net sales of products containing the Commissioned Work exceed $10,000, Client shall pay Cartographer a 1% royalty on the total net sales. Payment shall be made on a quarterly basis beginning one month after net sales exceed $10,000.”

By the way, you can include royalty and license payment sections even if you don't use them. That serves two main purposes: (1) you're letting the client know that licensing fees and royalties are industry standard terms, and (2) you can use a single template agreement and keep the paragraph numbers consistent across all clients. If you want to do this, it would look like: Section 9, Royalties. [Reserved.]

[aeshnidae]

Follow up, since he will be paying me in installments, would it be reasonable to indicate that the product will be delivered once I'm paid in full?

Yes, I would certainly not deliver a completed map until the client had paid in full. I might deliver the map in stages - deliver low-res .jpg of pencil sketch, get paid installment 1; deliver low-res .jpg of inked map, get paid installment 2; etc.) One of my earlier posts talks about deliverables and payment schedules (I know my posts are super lengthy - it's hard to be concise but complete - so just Ctrl+F "deliverables").

[Raven9]

Thanks! This is very helpful!

[aeshnidae]

Thanks! This is very helpful!

You're welcome! I've seen too many companies take advantage of artists, so I'm trying to level the playing field a bit!

[ladiestorm]

Okay, let's try a different route. I can see by what I'm reading, that there is NO WAY I will be able to write out a limited use contract, and get it right, but also make it so it's easy for all parties to understand.

So how about a different track? I know there have got to be artistic license contracts out there, on the internet or what not, that are available for purchase and download. But every time I try to do a search for limited use license agreement, I get websites for driver's licenses and construction contract advise!

So... for the purpose of 'general information', and assuming that the most basic contracts are 'equal' in all 50 states, is there site that sells generalized limited use agreements for artists?

[Mark Oliva]

But every time I try to do a search for limited use license agreement, I get websites for driver's licenses and construction contract advise!

Try a search with this search line: license artist "limited use"

Servus,

[ScottDA]

What a fantastic thread. Thank you, Aeshnidae, for providing such valuable information.

[aeshnidae]

LegalZoom is pretty decent if you're looking for agreement templates; they have actual attorneys review most of the templates. It's always hard to say for sure if a specific site is good because there are so many templates, and part of the challenge of drafting contracts is modifying the terms to meet the needs of a specific situation Below is a license template I created, with a number of different options for certain clauses (like type of license, royalties, etc.). Everything in [ALL CAPS BRACKETS] is informational; you need to delete all of that, along with clauses you did not select. This is the licensing agreement I would use to license my own maps.

Copyright License Agreement

This Copyright License Agreement (this “Agreement”) is made effective as of [DATE] (the “Effective Date”) by and between [YOUR NAME] (“Cartographer” or “Licensor”), located at [ADDRESS], [CITY], [ZIP CODE] and [YOUR CLIENT’S NAME] (“Client” or “Licensee”), located at [ADDRESS], [CITY], [ZIP CODE], each a “Party” and together the “Parties.

Whereas, Cartographer owns all proprietary rights in and to the copyrightable and/or copyrighted works described in this Agreement (the “Commissioned Work”);

Whereas, Cartographer owns all rights in and to the Commissioned Work and retains all rights to the Commissioned Work, which are not transferred herein, and retains all common law copyrights and all federal copyrights; and

Whereas, Cartographer desires to grant, and Client desires to obtain, a license authorizing the use of the Commissioned Work by Client in accordance with the terms and conditions of this Agreement,

Now, therefore, in consideration of the premises and the mutual covenants herein contained, and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. Ownership of Commissioned Work. Cartographer retains title, ownership, and all other rights in the Commissioned Work. Client acknowledges that Cartographer is the sole and exclusive owner of the Commissioned Work and all associated rights in the Commissioned Work, and Client shall do nothing inconsistent with Cartographer’s ownership. Client further agrees that it will not claim ownership rights to the Commissioned Work, or any derivative, compilation, sequel or series, or related Commissioned Work owned by or used by Cartographer. Client agrees that nothing in this Agreement shall give Client any right, title, or interest in the Commissioned Work other than the rights set forth in this Agreement.

2. Grant of License.

(a) [SELECT THE CLAUSE YOU NEED FROM THE OPTIONS BELOW. ONLY SELECT ONE CLAUSE. DELETE ALL OTHER CLAUSES. DELETE ALL CAPITALIZED LANGUAGE AND BRACKETS.

IF YOU WANT TO LIMIT THE USE OF YOUR MAP TO A CERTAIN AMOUNT OF TIME, (1) DELETE THE WORD “PERPETUAL” AND (2) AT THE END OF THE SENTENCE INSERT “FOR A PERIOD OF [INSERT #] OF YEARS FROM THE EFFECTIVE DATE OF THIS AGREEMENT.”

IF YOU WANT TO LIMIT THE USE OF YOUR MAP TO A CERTAIN GEOGRAPHIC LOCATION, (1) DELETE “WORLD-WIDE” AND (2) AT THE END OF THE SENTENCE, INSERT “WITHIN [INSERT COUNTRY NAME]”.

IF YOU DO NOT WANT YOUR CLIENT TO BE ABLE TO SUBLICENSE YOUR WORK, DELETE THE LANGAGE “SUBLICENSABLE” IF IT APPEARS IN THE APPROPRIATE CLAUSE.

REMEMBER THAT IF YOU GRANT AN EXCLUSIVE LICENSE, YOU CANNOT USE YOUR MAP UNLESS YOU RESERVE THE RIGHT TO USE IT FOR YOUR PORTFOLIO.]

[NON-EXCLUSIVE, ANY NON-COMMERCIAL USE] In accordance with this Agreement, Cartographer hereby grants Client a non-exclusive, non-transferable, non-sublicensable, world-wide, perpetual, paid-up, royalty-free license to use the Commissioned Work for non-commercial purposes.

[NON-EXCLUSIVE, LIMITED NON-COMMERCIAL USE] In accordance with this Agreement, Cartographer hereby grants to Client a non-exclusive, non-transferable, non-sublicensable, world-wide, perpetual, paid-up, royalty-free license to use the Commissioned Work solely for the purpose of [INSERT LIMITS. EXAMPLE: …SOLELY FOR THE PURPOSE OF CLIENT’S NON-COMMERCIAL D&D CAMPAIGN].

[NON-EXCLUSIVE, ANY COMMERCIAL USE, NO ROYALTIES] In accordance with this Agreement, Cartographer hereby grants to Client a non-exclusive, royalty-free, world-wide, perpetual, non-transferable (except as a sublicense), sublicensable right and license to the Commissioned Work to make, have made, use, sell, offer for sale, market, lease, import, have imported, or otherwise exploit the Commissioned Work.

[NON-EXCLUSIVE, ANY COMMERCIAL USE, ROYALTIES] In accordance with this Agreement, Cartographer hereby grants to Client a non-exclusive, royalty-bearing, world-wide, perpetual, non-transferable (except as a sublicense), sublicensable right and license to the Commissioned Work to make, have made, use, sell, offer for sale, market, lease, import, have imported, or otherwise exploit the Commissioned Work.

[NON-EXCLUSIVE, LIMITED COMMERCIAL USE FOR INDIVIDUAL BUSINESS, NO ROYALTIES] In accordance with this Agreement, Cartographer hereby grants to Client a non-exclusive, royalty-free, world-wide, perpetual, non-transferable, non-sublicensable right and license to use the Commissioned Work in the course of Client’s business and for no other purpose. Client may copy and use the Commissioned Work in Client’s products, point of sale displays, advertising, and other promotional materials. Further, Licensee may use the Commissioned Work in conjunction with Client’s website for the advertisement and sale of Client’s products that contain the Commissioned Work. Any other use of the Commissioned Work shall be made by Licensee only upon the receipt of prior written approval from Licensor.

[EXCLUSIVE, ANY COMMERCIAL USE, ROYALTIES] In accordance with this Agreement, Cartographer hereby grants to Client an exclusive, royalty-bearing, world-wide, perpetual, non-transferable (except as a sublicense), sublicensable right and license to the Commissioned Work to make, have made, use, sell, offer for sale, market, lease, import, have imported, or otherwise exploit the Commissioned Work. [OPTIONAL, SO THAT YOU CAN USE YOUR MAP: Cartographer reserves the right to use the Commissioned Work in Cartographer's portfolio.]

[EXCLUSIVE, LIMITED COMMERCIAL USE, ROYALTIES] In accordance with this Agreement, Cartographer hereby grants to Client an exclusive, royalty-bearing, world-wide, perpetual, non-transferable (except as a sublicense), sublicensable right and license to the Commissioned Work to make, have made, use, sell, offer for sale, market, lease, import, have imported, or otherwise exploit the Commissioned Work [INSERT LIMITS. EXAMPLE: AS PART OF CLIENT’S SELF-PUBLISHED NOVELS]. [OPTIONAL, SO THAT YOU CAN USE YOUR MAP: Cartographer reserves the right to use the Commissioned Work in Cartographer's portfolio.]

(b) Client retains all rights to products that contain the Commissioned Work that Client develops, creates, purchases, or otherwise owns.

(c) Client hereby accepts such license and agrees that Client shall not use the Commissioned Work except in accordance with the terms and conditions of this Agreement. [IF GRANTING A NON-EXCLUSIVE LICENSE, ADD THE FOLLOWING SENTENCE] Client acknowledges and agrees that the license granted herein is non-exclusive and that Cartographer may license others to use the Commissioned Work.

3. Fees.
(a) Licensing Fee. [SELECT THE CLAUSE YOU NEED FROM THE OPTIONS BELOW. DELETE ALL OTHER CLAUSES. DELETE ALL CAPITALIZED LANGUAGE AND BRACKETS.]

[NO LICENSING FEE] Reserved.

[ONE-TIME FEE] For the term of this Agreement, Client agrees to pay Cartographer a one-time licensing fee of [INSERT DOLLAR AMOUNT] within thirty calendar days of the Effective Date of this Agreement.

[ANNUAL FEE] For the term of this Agreement, Client shall pay an annual non-exclusive license fee of [INSERT DOLLAR AMOUNT] on [INSERT MONTH AND DAY] of every year during the term of this Agreement.

(b) Royalties. [SELECT THE CLAUSE YOU NEED FROM THE OPTIONS BELOW. DELETE ALL OTHER CLAUSES. DELETE ALL CAPITALIZED LANGUAGE AND BRACKETS.]

[NO ROYALTIES] Reserved.

[STANDARD ROYALTIES] During the term of this Agreement, Client shall pay to Cartographer an earned royalty based on the total [SELECT ONE] gross/net sales of any product containing the Commissioned Work. The royalty rate to be paid shall be [ENTER NUMBER] percent. Client’s obligation to pay royalties shall continue until the expiration of this Agreement.

[BONANZA CLAUSE – ROYALTIES KICK IN ONLY AFTER CLIENT IS SUCCESSFUL] Client shall not pay royalties unless and until the cumulative net sales of products containing the Commissioned Work exceed [ENTER DOLLAR AMOUNT], in which case Client shall pay Cartographer a [ENTER NUMBER] percent royalty on the total net sales. Payment shall be made on a quarterly basis beginning 30 calendar days after net sales exceed [ENTER DOLLAR AMOUNT].

4. Term and Termination.
(a) This Agreement shall commence as of the Effective Date and shall continue in full force and effect for a period of [ENTER NUMBER] year(s) [OPTIONAL: and shall automatically renew for additional one year periods, unless either Party provides written notice of non-renewal to the other Party, not less than sixty (60) calendar days prior to the expiration of any one year term].

(b) [USE THIS CLAUSE IF YOU WILL RECEIVE AN ANNUAL LICENSE FEE AND/OR ROYALTIES. IF NOT, DELETE THIS CLAUSE OR MARK IT “Reserved.”] Cartographer may, at its sole discretion, terminate this Agreement in Client defaults on any material terms herein or otherwise breaches the Agreement, or if Client enters bankruptcy proceedings. In the event that Client seeks bankruptcy, either voluntarily or involuntarily, Client shall immediately name Cartographer as a creditor for all royalties which are due, or may become due, under the terms of this Agreement.

(c) Upon termination or expiration of the license granted under this Agreement by operation of law or otherwise, all rights (including the right to use the Commissioned Work), privileges, and obligations arising from this Agreement shall cease to exist, except for Client’s obligation to pay royalties to Cartographer pursuant to the terms of this Agreement.

(d) [USE THIS CLAUSE IF YOU ARE GRANTING A COMMERCIAL LICENSE. IF NOT, DELETE THIS CLAUSE OR MARK IT “Reserved.”] Upon termination of this Agreement, Cartographer agrees to allow Client six (6) months to cease all use of the Commissioned Work, including a reasonable time to change labels, packaging and advertising, and twelve (12) months to deplete existing inventories of goods bearing the Work. Client agrees to discontinue use of the Work, upon termination of this Agreement, as quickly as practicable, and in no event longer than the time specified in this Section.

5. Disclaimer of Warranties. COMMISSIONED WORK IS PROVIDED “AS IS.” CARTOGRAPHER AND HIS/HER RESPECTIVE OFFICERS, AGENTS, AND EMPLOYEES JOINTLY AND SEVERALLY DISCLAIM ANY AND ALL REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, WRITTEN OR ORAL, IN FACT OR ARISING BY OPERATION OF LAW, REGARDING THE COMMISSIONED WORK THAT MAY BE CONTEMPLATED, ANTICIPATED, OR DEVELOPED BY EITHER OR BOTH PARTIES.

6. Liability.
(a) Limitation of Liability. IN NO EVENT WILL EITHER PARTY OR THEIR OFFICERS, AGENTS OR EMPLOYEES BE LIABLE FOR ANY INCIDENTAL, SPECIAL, INDIRECT, EXEMPLARY, OR CONSEQUENTIAL DAMAGES OF ANY KIND, INCLUDING BUT NOT LIMITED TO BUSINESS EXPENSE, LOSS OF PROFITS, AND DAMAGE OR INJURY TO PROPERTY, FOR ANY CLAIMS, DEMANDS, OR DAMAGES ARISING OUT OF THIS AGREEMENT OR USE OF THE COMMISSIONED WORK BY ANYONE EVEN IF THE PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

(b) Liability Cap. CARTOGRAPHER’S TOTAL AGGREGATE LIABILITY FOR ANY CLAIMS OR DAMAGES WHATSOEVER RELATING TO OR ARISING OUT OF THIS AGREEMENT AND/OR USE OF THE COMMISSIONED WORK, WHETHER IN CONTRACT OR TORT, SHALL BE LIMITED TO THE TOTAL OF ALL AMOUNTS ACTUALLY PAID TO CARTOGRAPHER BY CLIENT UNDER THIS AGREEMENT UNLESS FURTHER LIMITED BY APPLICABLE LAW.

7. Indemnification. [SELECT THE CLAUSE YOU NEED FROM THE OPTIONS BELOW. DELETE ALL OTHER CLAUSES. DELETE ALL CAPITALIZED LANGUAGE AND BRACKETS.]

[OPTIONAL BUT RECOMMENDED FOR AGREEMENTS WITH COMPANIES]Each Party shall indemnify and hold the other harmless for any losses, claims, damages, awards, penalties, or injuries incurred by any third party, including reasonable attorney’s fees, which arise from any alleged breach of such indemnifying party’s representations and warranties made under this Agreement, provided that the indemnifying party is promptly notified of any such claims. The indemnifying party shall have the sole right to defend such claims at its own expense. The other Party shall provide, at the indemnifying party’s expense, such assistance in investigating and defending such claims as the indemnifying party may reasonably request. This indemnity will survive the termination of this Agreement.

[IF YOU DON’T WANT AN INDEMNIFICATION CLAUSE] Reserved.

8. Attorney’s Fees. In the event of a dispute, the prevailing Party shall have the right to collect from the other Party its reasonable costs and necessary disbursements and attorneys' fees incurred in enforcing this Agreement.

9. Assignment. Neither Party shall have the right to assign its interests in this Agreement to a third party without the prior written consent of the non-assigning Party.

10. Amendments. This Agreement shall not be modified or amended unless such modification or amendment is in writing signed by both Parties.

11. Relationship of Parties. For the purposes of this Agreement the Parties shall be, and shall be deemed to be, independent contractors and not agents or employees of the other Party. Neither Party shall have authority to make any statements, representations, or commitments of any kind, or to take any action which shall be binding on the other Party, except as may be expressly provided for herein or authorized in writing.

12. Severability. If any one or more of the provisions contained in this Agreement, or any application thereof is held to be invalid, illegal, or unenforceable in any respect for any reason, then such invalidity, illegality, or unenforceability shall not affect any other provision hereof or any other application of the affected provision. It is the intention of the parties that if any provision or application thereof is held to be invalid, illegal, or unenforceable, there shall be substituted in lieu thereof a valid and enforceable provision or application as similar in terms to such provision or application as is possible.

13. Governing Law. This Agreement shall be construed and governed by the laws of the State of [INSERT YOUR STATE OF RESIDENCE] without reference to its conflicts of laws principles.

14. Entire Agreement. This Agreement constitutes the entire understandings of the parties with respect to the subject matter herein. All prior agreements, whether oral or written, are superseded by this Agreement.

ACCEPTED BY:

[SIGNATURES, PRINTED NAMES, DATES]