Private Commissions and the Law, part 2

The formula for heaven’s very simple,
Just follow the rules and you will see.
And as life travels on,
And things do go wrong,
Just follow steps one, two and three.
This month we look at ‘Professional Checklists’ which should be taken in conjunction with October’s exploration of ‘Amateur Attitudes’ and ‘Professional Practices’ (Private Commissions and the Law, Part I).

STAGE ONE: CREATION OF THE ARTWORK

Identification of Parties
What is the commissioner’s legal identity: in other words, who will be legally responsible for creating the legal relationship with the maker? Such person will be liable for payment, approval of any variations and of completion, accepting delivery, and so on.

Name and address are insufficient; what the maker needs to know is whether the commissioner is a private individual/sole trader/partnership/unincorporated association, club, society or group/private company limited by shares/private charitable company limited by guarantee/registered incorporated co-operative society/statutory corporation or body/public limited company/government department/the Crown/trust/registered charity.

The person negotiating the commission may well be employee/agent/director/consultant/public or private funding body, any one (or combination) of which may act on behalf of the true legal commissioner. This needs clarification, at the outset, together with the negotiator’s authority to strike and fulfil the commissioning deal.

Makers should, for example, take great care, when an approach is made on behalf of another body, to check the negotiator’s reporting back requirements and/or need to have ‘committee’ or ‘board’ approval for what the artist might reasonably take to have been a concrete agreement with the negotiator. Lawyers use the phrase ‘ostensible authority’, meaning perceived, but not necessarily real, authority to act so as to bind one’s superiors or principals; it’s wisest to check one’s perceptions against what is real – a concept with which most makers are immediately familiar. By the same token, the maker’s legal identity should also be made dear at the outset, especially where the artist is operating not as a sole trader, but as a private limited company/partnership/unincorporated association, group or society/ and so on. Warning bells should strike this note when commissioners perceive two or more makers being involved.

Open or select competitions/awards/sponsorship schemes which invite proposals/submissions/designs, need separate, careful consideration and treatment. Very briefly, they usually still amount to commissions, whose terms and conditions will normally be embodied within any advertisement material and application/submission forms. All such literature should be read as a whole as if it amounted to a one-sided ‘take it or leave if offer of a commission contract artists considering competing/applying should take expert legal advice to clarify their legal commitments, before they make a submission.

Winning usually means the artist has already agreed to be legally bound to execute the commission – and in accordance with terms and conditions which are non-negotiable, since the published invitation to submit was on a ‘take it – as stated – or leave it’ basis. Not all competitions are like this; some look as if they are, but are not; others don’t look that way, but are.

Regrettably, many such invitations are made by well-intentioned would-be ‘commissioners’ who fail to realise what they are really offering, through lack of experience or knowledge of professional art practices and/or without the benefit of legal in-put from lawyers experienced in that field. Moreover, the very nature of the offer/invitation denies the possibility of clarification through negotiation before legal commitment.

Artwork to be Created
What visual artwork does the commissioner require to be created: dimensions/materials/subject-matter/making processes/finishes/size of edition/mounting/framing/hanging or installation? As much specific detail as possible should be noted – including roughs/models/maquettes/designs; it’s beer-mats-and-backs-of-brown-envelopes-time, so to speak – documentary evidence, which should be kept and referred to in the confirmatory correspondence.

Payment for Creation
The most important point for commissioner and artist to clarify is that creation of the work, including expenditure on materials/research/site surveillance and so on, is to be paid for whether or not the commissioner also likes/wants to own/use the work or image contained in it/on it. For example, if the commissioner really only wants the artwork created in order to reproduce/market/merchandise the image, separate arrangements should be made for these purposes later in these same negotiations: see Stage Two, below. Similarly, if the commissioner simply wants to own the finished object, as is usually the case and likewise, if the artist is to create a piece in situ, for example, a mural or site-specific sculpture/installation, see Stage Two.

How is payment for the creative labour and materials to be successfully achieved? Professionals use the ‘one-third’ rule of thumb, or a variation of that principle. That is to say, the artist specifies a global creation fee – without breakdown into costs of materials, equipment, hours of research and execution (the maker’s private business) and not, at this stage, including any separate fee for selling the finished work/reproduction permissions/installation costs, and so on – these come later in the negotiations.

That global fee is negotiated to be payable in three steps:

  • one third payable on receipt of written confirmation from the commissioner;
  • second third payable when the artist notifies the commissioner that the work is two-thirds completed;
  • final third payable when the artist notifies the commissioner of completion.

Depending on the size, scale, cost, length of time for research/execution, the three-step/one-third rule could just as easily be two/four/six/twelve or more, or no, steps. For example, a commission which will take the artist twelve months’ full-time work, for a global creation fee of £12,000, could be agreed to be paid thus: £1,000 before starting work: then, eleven x £1,000 each month thereafter until completion.

The rationale behind such an arrangement is that the commissioner is given every reasonable opportunity to inspect work in progress, on payment of each proportion, and to express approval/disapproval before it is too late and the work is completed but rejected on the grounds that the commissioner does not like it or that the original brief has not been properly fulfilled by the artist – in the commissioner’s opinion. Should such periodic dialogue (and payments) give rise to the commissioner requesting changes/amendments which would cause the maker to incur further unforeseen and un-agreed expenditure (creative labour/ materials), such extra costs and work should become the subject of the same process of negotiation/written memos/indelible agreement as were outlined in Part I (for the achievement of the original commission).

Failing agreement on such variations and extra costs, the parties should then negotiate (in similar fashion) a fair termination of the deal; the artist should not be out of pocket for work done/investment in purchase of materials incapable of being re-cycled/used on other projects/loss of other commissions refused because of the commitment to the one in hand. This un-doing process, however regrettable, is both realistic and necessary for both sides – who should remember that, whatever was agreed at the outset, the artist can never be forced by law to execute the work (simply to pay compensation to the commissioner for defaulting), and the commissioner can only be forced to pay for work done/materials/losses resulting from unreasonable/wrongful termination.

Time-scale: Creation to Completion
Realism is again the order of the day. Both parties should avoid specifying a particular date (unless time is of the essence, in which case they should say so); ‘on or about’, ‘by such a date at the latest’ and ‘between such and such dates’ are best and give both sides flexibility they may (usually do) need for execution and payments respectively.

Reservation of Artist’s Rights
Artists need to clarify expressly that up to and including completion of the artwork, they retain legal rights of ownership of the work as a physical thing and of ail copyrights and moral rights which the law automatically gives to creators of original works: and that any changes in these reserved rights, if the commissioner so wishes, will be dealt with separately – but instantly, as follows.

STAGE TWO: USE OF THE ARTWORK

The real intention of the commissioner probably is the physical ownership of the completed artwork created; sometimes it is simply acquisition of rights to reproduce/market/merchandise the image created – with or without also owning the artwork as an object; other commissions just involve the installation/creation of a work in situ, for example mural site-specific sculpture, assemblage or environment. Whatever is required, good professional practice distinguishes clearly between Stage One’s creation and payment, and Stage Two’s use and payment for use of the image or artwork when created. So, after negotiating and agreeing Stage One, the artist and commissioner should immediately move into what, for the commissioner certainly, will be the heart of the matter: what does the commissioner want to do with the work agreed to be created and paid for?

Physical Ownership of the Artwork
If this, the usual requirement, is the real aim of the commissioner, the artist should consider whether the Stage One creation payment will be sufficient recompense for transfer of ownership as well – if so, the artist could agree simply to sell the piece to be created for a further nominal payment of, say, a penny/peppercorn/piece of cake; or whether a further real payment is required for transfer of ownership – if so how much. In other words. Stage One is rather like a ‘rejection fee’ – albeit in one/two/three or more steps – and Stage Two is the fee for accepting and acquiring ownership, from the commissioner’s perspective. In any event, transfer of ownership to the commissioner is best treated as a separate contract to be handled as a separate negotiation of points such as originality, size of edition (if relevant), copyright/moral rights (both usually retained by the artist), delivery and any installation, after-care of the work, borrowing back for artist’s exhibition purposes, and notification of any subsequent transfer/placement/re-sale of the work by the commissioner as new owner; see AM 98, 99. Remember: hesitate, negotiate, notate, indelibly communicate, with duplicate. Then, unless reproduction rights are also
being sought by the commissioner, move to Stage Three negotiations; otherwise, deal with such rights forthwith.

Acquisition of Reproduction Rights
The commissioner’s wish to acquire rights to reproduce/market/merchandise the image when created and paid for, is not normally the real aim of so-called fine art and crafts commissions. But it is nearly always the main aim of commissioners of photographs, unlimited editions of prints, textile/fashion and other designs, illustrations, and for three-dimensional prototypes/models/maquettes created by artist craftspeople, for example, furniture, knitting, weaving, pottery and so on. If there is a requirement for the maker to authorise the commissioner’s reproduction and use of the reproduced image/artwork – whether as the main/only/subsidiary purpose of the commission – it is essential that the terms and conditions of, and payment for, such reproduction and/or use be clarified immediately after Stage One has been negotiated and agreed; see AM 99, for a checklist of points to negotiate and agree. Remember: hesitate, negotiate, notate, indelibly communicate, with duplicate. Then, unless the work is to be created/installed in situ, move to Stage Three negotiations; otherwise, deal with such matters forthwith.

Simultaneous Creation/Installation of Artwork On Site
Murals are the most obvious example of work created and ‘installed’ simultaneously on a site/in a space owned by the commissioner or some third party for whom the commissioner is acting as agent/paymaster/broker. Other examples include sculpture or assemblages made in situ (rather than in the studio and then moved onto the site for installation, in which cases the separate selling negotiations should include delivery and installation arrangements). In such cases. Stage Two should involve negotiation and agreement of matters such as access to the site at mutually appropriate and convenient times, third-party approvals/consents to access and installation (including any local authority planning consents, where necessary in law), site preparation and availability of necessary or desirable technology/power/equipment; and, naturally, any further payment required by the maker for these extras (if not to be included/absorbed into the global Stage One creation fee).

N.B. It is always useful in such cases to clarify who, on completion of the artwork, will be the owner of the physical manifestation/creation – commissioner/site user/site freeholder/leaseholder/tenant/licensee; who will be responsible for after-care/maintenance and public liability insurance, where appropriate (preferably through separate negotiations based upon a maintenance manual prepared by the artist, used to provoke such discussions, as well as being the site-user’s manual in any event). Copyright and moral rights, including the display of a plaque/notice identifying the maker as author, should be dealt with immediately, in Stage Three negotiations.

A final word of caution for makers applying for residencies/bursaries/placements involving/requiring the creation of work at the residence/place and/or such work being left there at the end of the term. Such engagements are also contracts, perhaps for the provision of freelance services or even to perform as an employee. They are frequently offered as open or select competitions/ invitations – rather like competitive commissions mentioned at the outset (Identification of Parties, Stage One). Similar considerations apply, and great care should be taken to understand the terms and conditions of the offer/invite; they may well involve the applicant-maker agreeing to a one-sided commission deal requiring simultaneous creation and installation/transfer of ownership/copyright and moral rights – the whole package becoming the maker’s obligation, if selected/ awarded the contract. Whatever Stage One and Stage Two arrangements are made, certain points should always be clarified as follows.

STAGE THREE: INTELLECTUAL NUTS AND BOLTS

Copyright
Clarification and agreement that creation and any agreed Stage Two uses do not also involve transfer to the commissioner of the maker’s copyright. Even where Stage Two negotiations have resulted in agreement that the commissioner is to be authorised to make reproductions/market/merchandise the image (whether or not for further payment) the artist should retain copyright and say so. If the commissioner really does want to acquire the maker’s copyright (that is, the exclusive rights to make or authorise others to make reproductions, and therefore to prevent anyone – including the artist – from doing so) both parties would be well advised to take independent legal advice from an intellectual property lawyer. (Transfer of copyright – as opposed to the giving of permissions/licences to reproduce, mentioned at Stage Two above – must be put into writing and requires clear understanding and expression of complex legal issues with which most general legal practitioners, let alone artists and commissioners, are usually unfamiliar.)

Moral Rights
If copyright is tricky, statutory moral rights are even trickier. They are embodied in the Copyright, Designs and Patents Act 1988, recently enacted by Parliament and soon to become law; see AM 112. In short, five legal rights are automatically given to makers in relation to their original works, whether commissioned or not whenever such work is published commercially, exhibited in public or included in a TV programme or film. They are:

  • always to be identified as author
  • not to suffer unjustified modification
  • not to be named as author of work they did not create
  • not to continue being named as author of a work which has been altered (justifiably or not) since its creation, without the maker’s consent
  • not to be named as having authorised copies of work in fact created but not authorised to be copied (whether as copyright owner or not).

The last three rights (false attributions) exist in law today, but under the new law they will last for the maker’s lifetime plus fifty years after death. AB five are given to makers regardless of any copyright considerations or arrangements. In addition to clarifying copyright and moral rights at Stage Three, professional artists’ standard copyright bylines, indelibly affixed to works themselves, are now beginning to read like a novel; see the ‘signature’ at the foot of this piece.

Foreign Parties; Name That Country
Where the maker or commissioner usually resides outside England and Wales, it is normal professional practice for the parties to agree that any legal disputes which may arise out of the commission and its execution will be governed and settled by the laws of a country they name. This avoids expensive and messy legal disputes in the future, not just in relation to terms or performance of the agreement, but also as to which law should sort them out. For instance: maker resides in England, commissioner in France; commission agreed in the transit lounge at Bahrain,- if they fail to agree on whether French, English, Bahrain, or any other, law will govern their deal, the courts (which courts?) will have to decide. It’s very Catch 22 and exceedingly expensive to sort out – before the actual problem between the parties can be tackled, even by their lawyers trying to advise and assist. Most non-UK resident contracting parties are quite willing to agree that English (or Scottish) law is specified, because that (those) legal system(s) is (are) highly respected in business and legal communities throughout the world.

WARNING

I repeat. This article should be read together with Private Commissions and the Law, Part I: hesitate, negotiate, notate, indelibly communicate, with duplicate. The more important the commission is to a party or the more nervous one feels about following professional practices, the more important it is to take independent legal advice after negotiations and before reaching final agreement – preferably from a solicitor versed in artlaw matters.

@ Henry Lydiate 1988

 

 

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This article is from the Artlaw Archive of Henry Lydiate's columns published in Art Monthly since 1976, and may contain out of date material. The article is for information only, and not for the purpose of providing legal advice. Readers should consult a solicitor for legal advice on specific matters. Artists can get free online legal information from Artquest.