Contracts for Audio Professionals

This topic may come across as a little dry to a lot of you, so I will try and keep it basic. Contracts are an agreement between two or more parties, and can be expressed as either written or oral contracts primarily, although standard form contracts and period contracts are other kinds that you may happen across (“Types of Contracts”, 2016). For a contract to be legally binding, there must be a promise that is exchanged for adequate consideration, or a “benefit or detriment that a party receives or suffers that reasonably and fairly induces him/her to make the promise or contract” (Moore, S., 2005 p.385). A contract must also include, as a minimum, an offer and acceptance (the agreement) and consideration (the exchange for good/services depending on the perspective of the contract). Without these elements, your contract will not hold up in court should you run into any issues. A simple handshake agreement over something is not enough to warrant a contract being made, even as an oral contract, as it does not contain consideration from either side.

In his experience working in the game audio industry, Akash Thakkar (2017) notes that there are three forms of agreements that you will probably undertake as part of your contract: exclusive, non-exclusive, and profit-sharing.

In an exclusive agreement (also known as a work-for-hire or buy out deal), the client is buying the rights to your work, meaning you cannot reuse it in future projects, or make any further profit from it, though you can still use the work in demo reels and be credited for the work. These are more pricey for the client, and are more likely to be the kind of agreement that occurs on large-scale projects such as AAA games or blockbuster films. They are also more convenient for the client, as big production studios like Warner Brothers or Skywalker Sounds often retain the sounds from previous projects as a form of future-proofing.

Non-exclusive agreements mean that the client is essentially leasing your work from you. You still own the rights to your work, and can re-use your content, which would be ideal for a freelancer that wants to retain their personal sound library. Non-exclusive agreements can also come in the form of timed exclusivity agreements whereby you enter an exclusive agreement for a set time period, after which you can reuse your work and make money off it again.

Profit sharing agreements are a form of exclusive agreements where instead of earning a flat fee or milestone payments from the job, you are earning a percentage of the profit that the client makes. These can be standalone agreements, or they can be used in conjunction with a traditional exclusive agreement.

Of course there are other elements to contract law such as terms, exclusion clauses and scope that come into play in a contract as well, however if you wish to learn more about those, then I suggest you read up on it on business.gov.au (if you are working in Australia such as myself) or the relevant governmental resource to your territory, as there are some geographical differences.

 

References

Moore, S. (2005). Truth about the Music Business: A Grassroots Business and Legal Guide. Boston, MA: Course Technology, Incorporated.

Thakkar, A. (2017). Game Industry Freelancing: 101 [Video Course]. Retrieved from https://game-industry-academy.mykajabi.com/products/game-industry-freelancing-101/categories/378680/posts/1206089

Types of contracts. (2016). Retrieved from https://www.business.gov.au/info/plan-and-start/start-your-business/independent-contractors/understanding-contracts/types-of-contracts

Advertisements