Contracts and How They Affect Copyright

This is Part Two in our “Copyright Basics” series by Melbourne-based intellectual property lawyer Sharon Givoni. Sharon is the author of Owning It: A Creative’s Guide to Copyright, Contracts and the Law.

What is a contract?

In basic terms, a contract is a legally binding agreement between two or more parties. 

In order for a contract (written or oral) to be enforceable, essential elements must be present:

Agreement

For an agreement to be reached between the parties, there must be an ‘offer’ and an ‘acceptance’. For example, a designer may make an offer to a client by providing them with a quote, and the client would then accept by instructing the designer to go ahead with the job.

Consideration 

A valid contract requires that everyone provide something of value. This is known as consideration under the law and it can be anything - a monetary payment or even a promise not to do something.

Common types of contracts and agreements

A few examples of the different types of contracts that may be relevant to designers include:

Contractor Agreements

This describes the contractor’s specific rights and responsibilities, such as confidentiality, and who owns the intellectual property in the ultimate work. 

Collaboration Agreements

This covers the details of any mutually beneficial arrangement, such as who is responsible for certain tasks, who owns the intellectual property, and how the profits will be shared.

Licences and Assignments

This covers situations in which someone wants to use your work. You can either give someone permission to use your work whilst maintaining your ownership (as with a licence), or you can transfer your ownership and rights in your work to another person (as with an assignment).

Consignment Agreements

This may be used when an artist provides a gallery or retailer with their work to sell on their behalf, and includes important details such as when the artist will be paid and what happens if that gallery or retailer closes down. 

Confidentiality Agreements

These aim to protect information that is confidential, such as an artist’s ideas, sketches, designs and so on, and should be signed before any confidential information is disclosed. 

Do I need a contract?

It may be tempting to cut corners when it comes to legal documents. 

In small creative businesses, relationships are often informal, based on trust, and certain dealings are commonly understood without the need to put them in writing.

Written contracts enable all parties to have a shared understanding of what has been agreed to and can assist in the event things don’t go as planned. Contracts can also determine who owns copyright in an artwork. 

Final Thoughts  

In an ideal world, we would all conduct business on the basis of blind trust. However, reality is quite different. 

Having well-drafted contracts in place, tailored to suit your specific needs, can give you or your business solid legal protection should the need arise.

Disclaimer: This article is of a general nature only and must not be relied upon as a substitute for tailored legal advice from a qualified professional. Sharon Givoni owns copyright in this article. Sharon Givoni is the principal solicitor of Sharon Givoni Consulting.  She has over 25 years of experience in providing clients with commercial and IP law advice, and artists and creatives form a substantial part of her firm’s client base. 

Sharon is a creative problem solver and always cautious with the budgetary needs of her clients. Most importantly, she is dedicated to providing comprehensive legal advice in plain English, and does so through building direct relationships with her clients.  

Sharon is also preparing a second edition of her book “Owning It: A Creative’s Guide to Copyright, Contracts and the Law”, the first edition which has sold out. To find out more, visit: https://www.owningit.com.au/. 

For more information about Sharon Givoni go to www.sharongivoni.com.au. To contact Sharon Givoni and her legal team, contact info@iplegal.com.au