Help with reading a contract

[joosay]

Hello,

I have been talking with an agency that deals with red carpet events and other paparazzi-like celebrity photos. They e-mailed me a one-year contract to sign but I wanted someone else who is very familiar with contracts could take a look at it also just to make sure nothing is out of the ordinary.

I can email it to whoever would be willing to help me out.

Thanks!

[sapearl]

If it's that complex joosay - sounds like you may need an attorney to check it out, just to be on the safe side.

A couple things to look for though:
1) Who retains ownership of copyright - this gets into work for hire issues.
2) Will they allow you to display the work in your personal (print) portfolio?
3) Can you display the work in a blog, website, or online gallery?
4) Are there any restrictions for who you can work for - for a period of time - after the contract expires?

These things tend to be written in THEIR favor, looking for unsuspecting folks, people just starting out, etc. so they usually require a legal magnifying. Many of us here will be able to give you common sense speculation, but very often legal hairs are split that can only be resolved through use of an attorney.... in other words, somebody who REALLY knows what they are talking about. I am not an attorney. I am a photographer. - Stu

[joosay]

I realize this contract is badly written which I will point out to that person. I tried to make sense out of it. This is my first time dealing with a contract like this..

Here are some snippets:
I. xxxxxxx hereby appointments Distributor as an independent agent to sell, license and/or syndicate images Worldwide herinafter reffered to as Territory. xxxxxxx hereby appoints Distributor to sell, within validity of this agreement.

I'm not really sure if this restricts me from working for others.

III. Subject to the terms and conditions herefor, xxxxxxx hereby grants to Distributor the right to distribute the Products in the Territory. The rights granted under this clause:
A – are exclusive Distributor;
B – non-transferable;
C – The right to use and apply xxxxxxs trade name and Trademarks on the products, including the packaging, literature and catalogues.

Part A means when I provide them with the 'products' they are the only one that can use it?
Part C means they will credit me when it is published?

VIII. The Products involve valuable copyright, trade secret and other proprietary rights of xxxxxxx . xxxxxxxxx reserves all of its copyright, trade secret, and other proprietary rights in the products. No titles to ownership of any products, or the copyright, trademark, trade secret, and other proprietary rights to any, Products are transferred to Distributor under this agreement.

I retain ownership of copyright?

XII. This agreement shall be interpreted, construed and governed by the laws of the Netherlands. Any dispute, controverse or claim between the parties arising out of or related to this Agreement, or the breach, termination or invalidity hereof, shall be settled by adjudiction in the courts of the Netherlands and each party hereby consents to the jurisdiction to obtain injuctive or other relief in the event.

I'm not sure if this is 'normal.' It looks like a loophole of some sort but like I said, I've never dealt with these types of contracts before. What do you all think?

If it's that complex joosay - sounds like you may need an attorney to check it out, just to be on the safe side.

A couple things to look for though:
1) Who retains ownership of copyright - this gets into work for hire issues.
2) Will they allow you to display the work in your personal (print) portfolio?
3) Can you display the work in a blog, website, or online gallery?
4) Are there any restrictions for who you can work for - for a period of time - after the contract expires?

These things tend to be written in THEIR favor, looking for unsuspecting folks, people just starting out, etc. so they usually require a legal magnifying. Many of us here will be able to give you common sense speculation, but very often legal hairs are split that can only be resolved through use of an attorney.... in other words, somebody who REALLY knows what they are talking about. I am not an attorney. I am a photographer. - Stu

[noxcuses1]

No titles to ownership of any products, or the copyright, trademark, trade secret, and other proprietary rights to any, Products are transferred to Distributor under this agreement.


Huh? That's not even a sentence! :confused:

[sapearl]

It certainly is written primarily in their favor.

Where does it even say you get paid for your work - unless I missed that. It also appears that you transfer all rights, totally, to them. You certainly can't sell any of it yourself. I'm totally unclear if you can even display the work.

The more I reread this thing, the larger my headache grows.

And this paragraph: ":VIII. The Products involve valuable copyright, trade secret and other proprietary rights of xxxxxxx . xxxxxxxxx reserves all of its copyright, trade secret, and other proprietary rights in the products. No titles to ownership of any products, or the copyright, trademark, trade secret, and other proprietary rights to any, Products are transferred to Distributor under this agreement."

Now I'm really getting confused about who the distributor is. Lousy grammar, conflicting statements..... you need a legal person to look this over. I believe one or two of us here is also an attorney, but until such time as they weigh in, we are just giving you groundless opinions.

[joosay]

Distributor shall pay to xxxxxxx fifty percent (50%) of the product selling price as Royalties. Distributor shall provide xxxxxxx, by the 25th of each month, a sales report of all images sold during the previous month. Information regarding sales must include image number, rights granted. xxxxxxxx will provide a Royalty Invoice according to the sales report. Distributor shall remit payment via bank transfer at latest 30 (thirty) days after the money is collected.

That's the payment section. Should I just paste the whole thing? lol

I didn't see any where in the contract about being able to display the work in my own site/gallery/blog. Does that mean that I'm not restricted from doing so then?

[joosay]

It only states how much of a cut I get per images but how am I supposed to know how much it was worth to begin with?
There are tons of spelling errors and like noxcuses1 and yourself pointed out, hard to understand..

I've also worked with another agency that deals with the type of images and I never had to sign a contract. I showed watermarked, low-res images and they picked which ones they'd like to buy. They gave me a $xxx per image rate that we agreed upon before hand. They pay me that rate x # of images they wanted via paypal and I email them the pictures they wanted.

This one requires me to setup a personal FTP (which I don't really know how to do right now but I'm sure I can figure it out...).

Products shall be made available to Distributor via a personal FTP.

I'm not sure if I will know what images/how many images with this method. Any input would be appreciated regarding this.

[neilwood32]

Definately get a professional to look over the contract.

The legal advice you get here (while normally very good) is worth as much as you paid for it - nothing because we arent lawyers!

[Nightstalker]

Post it up and let us have a look.

I'm no lawyer but I was a Commercial Manager at a major Multi-National company and used to negotiate milti-million pond / dollar contracts on their behalf. I may be able add some clarity.

[joosay]

exclusive Distribution Agreement

This agreement is made and entered into on “12th of February 2010 by and between: Photographer xxxxxxxxx herinafter reffered to as xxxxxxxxx, and xxxxxx Syndication, having office at xxxxxxaddress here, in DEVENTER hereinafter referred to as “distributor”.
I. xxxxxxxx hereby appointments Distributor as an independent agent to sell, license and/or syndicate images Worldwide herinafter reffered to as Territory. xxxxxxxx hereby appoints Distributor to sell, within validity of this agreement.

II. This agreement is valid from 23th of February 2010, to the 23 th of February 2011 after both parties fully sign the agreement. At the end of the valid period, this agreement will be renewed automatically for period of one (1) year. If either party wishes to terminate this agreement, official written notice three (3) months prior to expiration date is required.

III. Subject to the terms and conditions herefor, xxxxxxxxx hereby grants to Distributor the right to distribute the Products in the Territory. The rights granted under this clause:
A – are exclusive Distributor;
B – non-transferable;
C – The right to use and apply xxxxxxxx's trade name and Trademarks on the products, including the packaging, literature and catalogues.
IV. Products shall be made available to Distributor via a personal FTP.

V. Distributor shall pay to xxxxxxxx fifty percent (50%) of the product selling price as Royalties. Distributor shall provide xxxxxxxxxx, by the 25th of each month, a sales report of all images sold during the previous month. Information regarding sales must include image number, rights granted. xxxxxxxx will provide a Royalty Invoice according to the sales report. Distributor shall remit payment via bank transfer at latest 30 (thirty) days after the money is collected.


VI. xxxxxxxxxx shall notify Distributor in advance of any changes in, or affecting the products, prices, terms, and conditions of sale. Distributor agrees to abide by these changes.

VII. Distributor shall be solely responsible for the payment of any and all taxes whether in the nature of sales, remittance, excise or other tax that is or may become due in connection with the sale of the Products under the terms of this agreement.

VIII. The Products involve valuable copyright, trade secret and other proprietary rights of xxxxxxxxx . xxxxxxxxxx reseves all of its copyright, trade secret, and other proprietary rights in the products. No titles to ownership of any products, or the copyright, trademark, trade secret, and other proprietary rights to any, Products are transferred to Distributor under this agreement.


IX. Distributor shall make every reasonable effort to ensure that the products are not used in an illegal way or without permission. If the products are found to be used illegally or without permission Distributor shall bring the matter to the attention of “ xxxxxxxx and make efforts, or assist xxxxxxxx in making efforts, to obtain compensation.

X. This Agreement may not be modified, amended or otherwise changed in any respect without the written agreement of both parties.

XI. This Agreement shall be binding upon distributor, xxxxxxxxxx and their respective heirs, executors, administrators and succesors.

XII. This agreement shall be interpreted, construed and governed by the laws of the Netherlands. Any dispute, controverse or claim between the parties arising out of or related to this Agreement, or the breach, termination or invalidity hereof, shall be settled by adjudiction in the courts of the Netherlands and each party hereby consents to the jurisdiction to obtain injuctive or other relief in the event.



Duly authorized to sign for and on behalf of:
xxxxxxx Syndication xxxxxmynamexx





______________________ ______________________
Managing Director Name Name & Position
Managing Director

[ssim]

Really, you honestly come to a forum to have a contract interpreted. If it is that important spend an hour with a lawyer or at least a para legal.

[joosay]

Hi Sheldon,

Thank you for your comment and advice.

[Nightstalker]

I. xxxxxxxx hereby appointments Distributor as an independent agent to sell, license and/or syndicate images Worldwide herinafter reffered to as Territory. xxxxxxxx hereby appoints Distributor to sell, within validity of this agreement.
OK – this is a simple appointment clause but they are looking to work WORLDWIDE which is a heck of a territory – are they able to fulfil this obligation, what worldwide capability do they possess? I can’t say that the wording is very good “xxxxxxxx hereby appoints Distributor to sell, within validity of this agreement.” Is basically a redundant clause as it just restates the earlier appointment.

II. This agreement is valid from 23th of February 2010, to the 23th of February 2011 after both parties fully sign the agreement. At the end of the valid period, this agreement will be renewed automatically for period of one (1) year. If either party wishes to terminate this agreement, official written notice three (3) months prior to expiration date is required.
OK – 12 month period with automatic extension for a further one year. I can’t remember the full details but any form of automatic renewal is considered bad for you as it strengthens the Distributors claim for compensation for loss of expected earnings if you terminate early. It was standard for us when appointing Agents / Distributors to have automatic termination and renewal only by mutual consent and re-signing.


III. Subject to the terms and conditions herefor, xxxxxxxxx hereby grants to Distributor the right to distribute the Products in the Territory. The rights granted under this clause:
A – are exclusive Distributor;
B – non-transferable;
C – The right to use and apply xxxxxxxx's trade name and Trademarks on the products, including the packaging, literature and catalogues.
So they are being appointed as Exclusive Distributor and do not have the rights to transfer this distributorship to anyone else – very kind of them.
Whuilst you retain Copyright I would argue that this clause means that you can only sell any photo's that you send to them through them. Obviously any photo's that you do not send to them I would argue that you could sell via other routes. I'm sure however that they will claim to be the Exclusive Distributor for all of your work.
As for crediting you, they have the rights to use your trademarks but they are not obliged to do so if they do not want to. Your work may or may not be credited to you and you lose any say in how they use your tradename and trademarks.

IV. Products shall be made available to Distributor via a personal FTP.
This is purely a logistical issue – FTP is easier, quicker and more reliable than supplying CD’s or emailing.

V. Distributor shall pay to xxxxxxxx fifty percent (50%) of the product selling price as Royalties. Distributor shall provide xxxxxxxxxx, by the 25th of each month, a sales report of all images sold during the previous month. Information regarding sales must include image number, rights granted. xxxxxxxx will provide a Royalty Invoice according to the sales report. Distributor shall remit payment via bank transfer at latest 30 (thirty) days after the money is collected.
This is more interesting. They will give you a sales report and then you will give them a detailed invoice and they will pay within 30 days of collecting the money. There are a few points to consider here :
1 – you are sharing the risk of non-payment with them – if they fail to collect any payments due then you will not be paid out. In such an event who will be responsible for chasing the payment through the courts and for the associated legal fees - my guess is it will be you or at best they will look to share the costs.
2 – what happens after the agreement is terminated? Say in month 6 they have licensed product on an annual basis and you terminate after 12 months – what happens when the license is up for renewal – will the client have your details or will they contact the agency? The licensing agreement is likely to be with the Distributor and so they will probably get the call - how they handle it thereafter is anyones guess.

VI. xxxxxxxxxx shall notify Distributor in advance of any changes in, or affecting the products, prices, terms, and conditions of sale. Distributor agrees to abide by these changes.

OK this is you telling them of changes – nothing to worry about here then.

VII. Distributor shall be solely responsible for the payment of any and all taxes whether in the nature of sales, remittance, excise or other tax that is or may become due in connection with the sale of the Products under the terms of this agreement.
They will pay their own taxes on what they sell – you will obviously be responsible for paying tax on the Royalties you receive.


VIII. The Products involve valuable copyright, trade secret and other proprietary rights of xxxxxxxxx . xxxxxxxxxx reseves all of its copyright, trade secret, and other proprietary rights in the products. No titles to ownership of any products, or the copyright, trademark, trade secret, and other proprietary rights to any, Products are transferred to Distributor under this agreement.
You retain copyright.



IX. Distributor shall make every reasonable effort to ensure that the products are not used in an illegal way or without permission. If the products are found to be used illegally or without permission Distributor shall bring the matter to the attention of “ xxxxxxxx and make efforts, or assist xxxxxxxx in making efforts, to obtain compensation.

They accept no responsibility if your photo’s are miss-used or are used without permission. They will simply tell you and “assist” you in seeking compensation. Basically if your photos are miss-used or are used without permission they will tell you and it is up to you to pursue the case. Don’t expect them to offer any tangible or financial assistance.

X. This Agreement may not be modified, amended or otherwise changed in any respect without the written agreement of both parties.
This is a standard cause.

XI. This Agreement shall be binding upon distributor, xxxxxxxxxx and their respective heirs, executors, administrators and succesors.
So if you die your family is tied into the agreement. Nice.

XII. This agreement shall be interpreted, construed and governed by the laws of the Netherlands. Any dispute, controverse or claim between the parties arising out of or related to this Agreement, or the breach, termination or invalidity hereof, shall be settled by adjudiction in the courts of the Netherlands and each party hereby consents to the jurisdiction to obtain injuctive or other relief in the event.
Badly written and I’m guessing a translation from its original language but basically if there are any problems either during the period of the agreement or after termination then you agree to the be this by a material breach of the agreement or by normal termination then you agree to put the matter before the courts.

--------------------------------
Now for the good bit - what they don't say:

I can't find anything on indemnity - whereby they will indemnify you (or vice versa) in the event of any claims being made against you.

Say for example that you take a photo of a young girl that is used in an AIDS campaign or to promote awareness or an eating dissorder, or worse still ends up on the cover of a porn DVD. Who will the claim be directed at / who is responsible - you the photographer or them the distributor. Who will end up in court?

All in all I would not consider it to be a good contract for you as it offers no guarantees of income, limits your ability to sell via other routes, has you sharing the risk of non-payment and it does not give you any protection in case of a law suit being filed against you.

Please don't take my ramblings as gospel as it's been a few years since I've done this in earnest but at least when you do talk to a lawyer it may give you a few points to start with.

[Tigran]

joosay -- I am a lawyer, and I would tell a client coming to me with this agreement NOT to sign. This contract seems to have been prepared by a non-lawyer -- ie looks like something that may have been pulled off the net and modified to suit their purpose. But they did a poor job of modifying it, which leaves open more questions than it answers. A well draft contract should not leave anything subject to different interpretations, and this one does.

For example -- you are granting them a worldwide territory. And in Section III -- Exclusive Distributor -- to me, that means that only they have the right to sell (ie "distribute") your pictures during the term of the agreement. I also question why they are named a "distributor", you said they deal in red carpet and other celebrity events. Are they hiring /sending you to shoot these events or are you sending them pictures of event you shoot? If the former I would only give them exclusive rights to events they send you to. If the latter, I would not give them an exclusive right to distribute your pictures.

The real problem here is if you grant them an exclusive right to sell your pictures (meaning during the term of the agreement not even you can sell pictures to anyone else) and they do not really market your photographs, you are stuck. There isn’t even a termination clause in case things are not working out and you want to terminate the agreement. The only termination provision is that you need to give notice at least 3 months before the end of the term (or the automatically renewed term) in the event you want to terminate the agreement.

Also, I don’t know where you live, but if there is a dispute between them and you, you will have to sue them in court in the Netherland under the laws of the Netherlands. The will be difficult and expensive for you.
In short, this agreement is a piece of junk. It looks like they pulled a products (ie goods sold in a store) type of agreement off the net and tried to change it to suit their needs, but they did a bad job of it. Photographs are copyrighted not trademarked or trade secrets – this was one clue for me. As has been pointed out, you should get an attorney (where you live) to help you get a proper form of agreement. Or find a better form that fits what you are trying to do – but do NOT give an exclusive, worldwide right to sell your photographs. The right should be an Non-exclusive right granted in a limited territory (or it can be worldwide as long as it’s non-exclusive and they have the chops to sell your pictures). Good luck.

[Karl Johnston]

This is how I read it, though I'm not a lawyer and I suggest you contact someone who is....for any legally binding whatever
in fact, I'll edit this...I won't try to in case it comes back to me.
Though I echo SSIM; take the time to go visit with a legal aid or someone to decode this for you, takes 10 minutes and you have the piece of mind that it was done properly.

[joosay]

Tigran - I really appreciate you taking all that time to break down and interpret each section. I haven't signed it and I don't think I will if it stays this way.

The reason why I went here for help is because I'm just starting out with photography. I can't afford to pay for a lawyer right now. Hell, I'm still dreaming of having my own studio... So Tigran, again, thank you!

[Tigran]

No problem -- I don't know where you live, but you may be able to get help from a law school in your area. Many law schools have clinic programs where law students assist with legal needs (and are supervised by a professor) all for free. My law school in NY, St. John's Law School, has several programs -- including one to help with contract review, etc.

[joosay]

I'm actually in NYC and live in Queens which is where St John's is. I looked at their clinical programs but I didn't see one that fit my situation. Should I just contact one of the faculty members and inquire?

[Tigran]

Send me an email with your contact information and I will find out who you need to contact at the law school.

[Alikat]

joosay -- I am a lawyer, and I would tell a client coming to me with this agreement NOT to sign. This contract seems to have been prepared by a non-lawyer -- ie looks like something that may have been pulled off the net and modified to suit their purpose. But they did a poor job of modifying it, which leaves open more questions than it answers. A well draft contract should not leave anything subject to different interpretations, and this one does.

For example -- you are granting them a worldwide territory. And in Section III -- Exclusive Distributor -- to me, that means that only they have the right to sell (ie "distribute") your pictures during the term of the agreement. I also question why they are named a "distributor", you said they deal in red carpet and other celebrity events. Are they hiring /sending you to shoot these events or are you sending them pictures of event you shoot? If the former I would only give them exclusive rights to events they send you to. If the latter, I would not give them an exclusive right to distribute your pictures.

The real problem here is if you grant them an exclusive right to sell your pictures (meaning during the term of the agreement not even you can sell pictures to anyone else) and they do not really market your photographs, you are stuck. There isn’t even a termination clause in case things are not working out and you want to terminate the agreement. The only termination provision is that you need to give notice at least 3 months before the end of the term (or the automatically renewed term) in the event you want to terminate the agreement.

Also, I don’t know where you live, but if there is a dispute between them and you, you will have to sue them in court in the Netherland under the laws of the Netherlands. The will be difficult and expensive for you.
In short, this agreement is a piece of junk. It looks like they pulled a products (ie goods sold in a store) type of agreement off the net and tried to change it to suit their needs, but they did a bad job of it. Photographs are copyrighted not trademarked or trade secrets – this was one clue for me. As has been pointed out, you should get an attorney (where you live) to help you get a proper form of agreement. Or find a better form that fits what you are trying to do – but do NOT give an exclusive, worldwide right to sell your photographs. The right should be an Non-exclusive right granted in a limited territory (or it can be worldwide as long as it’s non-exclusive and they have the chops to sell your pictures). Good luck.

^^^here! here!^^^
I am a paralegal and read contracts everyday all day for a living and couldn't have written it better. I negotiated license agreements for a university for 7 years prior to my current position and would never have allowed a student, professor, or anyone else to sign this document. Its a piece of junk.