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Explanatory Notes
Design Agreement
This design agreement is intended for use by a graphic designer or artist who is commissioned to provide a design or artwork for a client. Whilst reasonably balanced, the agreement is prepared from the designer's point of view rather than that of the client. The agreement is made up of three separate documents – a Form of Agreement, Terms of Business and a Schedule which has job-specific details relating to the work. The document is designed for flexible use –the Terms of Business will be attached to the Form of Agreement when it is signed by the designer and client. The Terms of Business can also be used on their own without the Form of Agreement, and given to a potential client by the designer when being asked to tender for some work. The agreement is fairly straightforward and comments on specific clauses are dealt with below. FORM OF AGREEMENT This is the document to be signed by both parties. In addition to filling in the full names and address of each party, the fees and estimated completion date also need to be completed. Clearly, the Form of Agreement may need to be tailored to particular circumstances. When it is signed – and there should be two copies – one signed by each party - the Terms of Business and the Schedule with the job-specific details should be attached. TERMS OF BUSINESS 1. Definitions and Interpretation
This clause contains a few defined terms which are used throughout the agreement. The description of the artwork to be provided is to be included in a separate schedule which will form part of the agreement. 2. Services of the Designer
This briefly describes the work of the designer. If there is to be a deadline within which the design work is to be carried out, this can be inserted in the Schedule but our wording is designed to ensure that dates are estimated and not guaranteed. Generally, it is sensible in a relationship such as this for the designer and client to have a clear understanding before any contract is signed as to the scope of work that is required and the type of designs to be prepared. From the designer's point of view, there will usually be a fixed fee and the designer doesn't want to find that he/she is regularly being required to revise the designs to meet the client's requirements. Equally, from the client's perspective, he/she does not know whether or not the designs will be suitable until an initial draft is produced, but he/she needs to be happy with the choice of the designer at the start of the contract. The final paragraph 2.3 dealing with extra fees is intended to give the designer some protection against major changes to the brief. 3. Fees and Payment
There will usually be a lump sum fee, but that is not always the case. Occasionally the fee will be related to the time spent on the project and sometimes there will be a mixture – e.g. a fixed sum plus £X per hour/day if more than a budgeted amount of work has to be performed. Details relating to the fee will go into the Schedule. This section deals with the invoicing and payment terms. If the designer is registered for VAT, then a VAT Invoice or VAT receipt will need to be issued in respect of each payment. Under this section, the designer is entitled to claim interest on late payment. The interest rate in this clause is, in fact, lower than the rate which would apply if the agreement is made in England: the Late Payment of Commercial Debts (Interest) Act 1998 gives a party to a contract a right to claim interest at quite a high rate – currently around 8% p.a. above Bank of England base rate- even if there is nothing in the contract to this effect. A slightly lower interest rate is usually more commercially acceptable and the fact that such a clause is incorporated arguably makes it easier for a claim by the designer for late payment. The final paragraph 3.6 gives the designer the opportunity to charge for extra services. Where the designer has an hourly or daily rate, this will go into the Schedule. Otherwise, the designer should provide an estimate before starting on any extra work. Sometimes it may be worth having a statement in the Schedule to describe the expected time to be spent on the project by the designer - so any serious deviation from this caused by the client may trigger a claim for extra payment. 4. Cancellation
Designers may wish to delete this section altogether. However, it caters for the possibility of an initial design being prepared and the client then deciding not to proceed. In those circumstances, the cancellation clause will make it clear that the designer is entitled to be paid at least a portion of the original fee, even if the assignment does not go through to completion. Where a client does cancel, it is sensible to require, as here, that the artwork already handed over should be returned and to make it clear that the client does not have any right to use any of the designer's work unless the full fee is paid. 5. Intellectual Property.
There are two alternative sections – one of which should be deleted before these Terms are given to a client. Alternative A gives all ownership of copyright etc to the client, subject to him paying the fees due. Alternative B leaves the copyright with the designer and the client has a licence to use the artwork in his business.
Copyright. A designer will, in the absence of any agreement to the contrary, own the copyright in the artwork that he prepares. Where a design is being commissioned by a client for a particular purpose – e.g. the design of a logo for a company – the client will usually want to ensure that it owns the copyright and that the designer does not have any residual rights to use those designs somewhere else. In order to achieve this, a clause such as Alternative A is needed, under which copyright and any other intellectual property rights in the design transfer to the client. However, this transfer (or "assignment") will only take effect once the full price has been paid. This is clearly important from the designer's point of view. Occasionally, the designer will retain copyright in which case Alternative B should be used. An architect, for example, will usually want to retain copyright in his designs for a building and in that case the client will be given an irrevocable licence to use those designs for the purposes the building for which they were commissioned, but not for any other purpose. Moral Rights. Under European law relating to intellectual property, the "author" – i.e. in this case, the designer – has a right to be named as the author in any document which contains that work. For reasons already discussed in relation to copyright, it is usual for a client to have all rights in relation to the design without having to refer to the designer, and in order to achieve this legally, appropriate wording is required in Alternative A. In those circumstances where the designer wishes to assert his/her moral rights, e.g. the designer of the dust-jacket of a book would usually be identified in all published copies – the wording in the final paragraph of Alternative B may be used. Sometimes a designer may want to go further and say: "The Client shall ensure that the following notice will appear on every document which includes the Artwork: "The right of [name of Designer] to be identified as the author of [description of Artwork] has been asserted in accordance with the Copyright, Designs and Patent Act 1998. It is the responsibility of the Client to ensure that this obligation is imposed on any assignee or licensee of the Client." 6. Designer Warranties
It is not uncommon for a client to want a written assurance that the designs he is paying for are indeed the designs of the person selling them and not some third party. This section is intended to achieve this and to give the client comfort that no third party rights are being infringed. 7. Client Obligations
Under the first paragraph, the client is required to respond promptly to requests from the designer. Under the next two paragraphs, whilst not always considered necessary, it is no harm to establish the reasons why the designs are required and to obtain a provision that the client will not use the artwork for some illegal or pornographic purpose (but this clause would obviously not be appropriate if the designer is preparing illustrations for a pornographic magazine!). Where the copyright is transferred to the client, the designer will no longer have any rights – hence the wording which reserves for the designer the right to make use of the artwork in his publicity material. 8. Termination
If either party becomes insolvent or commits a material breach of the agreement then it is sensible to give the other party the right to terminate. 9. Confidentiality
It is usual to have a confidentiality clause so that any trade secrets or confidential information which either party receives as a result of their dealings is kept confidential and not made available to anyone else. 10. Assignment
The issue of assignment of copyright has already been dealt with. This Clause concerns the right of either party to transfer/assign any rights or obligations under the agreement to someone else. Since a Design Agreement trends to be somewhat personal in nature, assignment is prohibited by this clause. 11. Notices
It is usual to have a clause such as this, stating that notices must be given in writing and specifying the method of giving notice – in this case by hand, by fax or by post. 12. Law and Disputes
Hopefully no disputes will arise, but it is sensible to specify the law of the country which governs the agreement - usually that of the country which both parties are resident – and also to say how disputes will be resolved if they do arise. Here we have suggested the possibility of mediation or with recourse to the Court as the final option. For more on mediation see our free document Z140. For information on CEDR, look at their website – www.cedr.co.uk. Schedule
This should be written to suit the particular circumstances – some suggestions are set out here in italics. In addition to the brief, the Schedule may contain dates for delivery, details of any reimbursable expenses and hourly or daily rates that may apply.
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