After attending different regional conferences over the last couple decades the one subject that it seems will never grow stale is contract law. Any session in the subject is always well attended. A large number of these sessions are conducted by Brian Taylor Goldstein and Robyn Guillams from GG Arts Law.
At the last Arts Midwest conference they conducted a session on contracts for collaborations and partnerships. Before they started on that specific subject, they made some general comments about how people should fundamentally think about contracts.
The Contract Finishes The Conversation, It Doesn’t Start It
Everything about contracts starts from an understanding of this concept. A contract memorizes an agreement that is made. The contract doesn’t precede the agreement. Brian and Robin (henceforth, GG Arts) essentially said that starting a conversation with the contract is lazy, as is the idea that a contract is just something to sign.
The thing to know is that a contract will not protect you. It is not self-enforcing. It only provides the right to enforce something.
This dovetails with one of my earlier posts here about not being afraid to make changes to a contract. GG Arts also said there is no such thing as an industry standard practice or form, everything is negotiable.
According to GG Arts, what is generally the problem is that people want to avoid the boring part of an arts engagement so they try to get the contract to deal with issues that they really need to be having conversations about. A contract is not a substitute for common sense and business planning. Previous agreements can be used as models for the next agreement, but not as an immutable standard.
You want to get these issues addressed in advance because when trouble crops up, few people are going to voluntarily clarify an issue so that they are taking responsibility for the problem.
Contract Is A Tool In A Communication Process
People may view a contract as a sword with which to intimidate the other party, but really it is just a mode of communication. Like all communication, there has to be an exchange.
GG Arts said if the contract isn’t coming back, that should be taken as much as of a warning sign that something is wrong as your spouse not speaking to you. A contract isn’t a hot potato that penalizes whoever is holding it. You can’t assume that just because the other person hasn’t said anything or sent it back, the silence indicates consent to the terms of the contract.
GG Arts warned against trying to use a contract to make a problematic person fall in line. In all likelihood it isn’t going to work and you will still have to deal with their failings. Then you will be faced with the prospect of either incurring the expense to enforce the contract or letting the other person know you won’t take action to enforce the contract. Better not to work with them in the first place or build things into an agreement that ameliorates their failings.
By the way, if you have ever watched a TV drama where someone has inserted a gotcha clause in a 1,000 page contract, know that the scale you are probably operating on doesn’t make it worth inserting those clauses or trying to enforce them.
Essentially, it will cost you more to try to sue someone than it is worth. You can only recover your $50,000 plus court costs if you win and the person actually has the capacity to pay. It is better to try to reschedule a performance or come to some sort of accommodation where you can recoup some of your expenses than to look to deliver a triumphant coup de grace.
This is the essence of why it is best to view a contract as recording the details of an agreement that has developed out of a conversation than as the tool that will most effectively eliminate any worries you may have about the consequences of something going wrong. The conversation leading up to the contract is what helps eliminate those worries.
What Does A Contract Do?
According GG Arts, a contract-
–Avoids misunderstandings. For example, what exactly is meant by the terms “Act of God” or “standard rate.” Does “provide housing” mean a hotel or a bedroom in the board president’s house?
–Educates each party. Different regions of the country or different arts disciplines may have their own particular general expectations about an experience.
–Helps Assess Risk This goes back to the concept of a contract as a tool of communication. If it isn’t being returned you may not be a priority. If there is a lot of nit-picking and dickering over points, it is good sign that the engagement might be a problem so you may ask for money up front to mitigate the risk. (Or a lower fee and different concessions if you are doing the paying.)
–Helps Determine What You Need vs. What You Think You Need. If you are able to discard “industry standards everyone demands” without impacting the quality or enjoyment of the experience, you clarify what is really important. Likewise, you may learn to insist on things that “nobody else we deal with requires.”
I will be doing a companion post to this one covering the specific elements GG Arts say need to be considered when creating a contract. One basic concept they communicated that I will emphasize there is that you want specificity, not complexity from your contracts.
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