Last month we tackled a general overview of why you need contracts in video production. That included what sorts of protections they afford you, your clients and you vendors (both crew and talent). As you might imagine, contracts are only useful when they are drafted, signed and executed BEFORE the start of pre-production.
Starting a job without a contract in place, as I discussed at length last time, is a mistake. Thinking that you’ll be able to bring a contract into the mix once the project is mid-stream is also misguided. The goal of any contract is to anticipate, to the best of your ability, as many of the contingencies, conflicts and expectations from both parties that a client/producer relationship creates.
So what types of contracts do you need? That depends on the project, as certain jobs call for more documentation than others. Let’s start with the one contract that you should literally have in place for every project: The Standard Production Contract.
Standard Production Contract (Contract of Engagement)
At its most basic level, a contract of engagement is a written agreement to perform services in exchange for compensation. A good contract of engagement lays out the parties involved (client and producer), the engagement's purpose and what both sides expect. For the client, this includes their expected services and end deliverables. For the producer, this outlines the monetary compensation for those services, and most importantly, the timeline for payment.
Let me take this opportunity, once again, to mention the importance of agreeing on the flow of money beforehand. You should have a deposit (50% is standard) and a signed contract in hand before any work starts. On the back end, you should collect the balance payment before handing over any deliverables.
The great thing about a contract is that it gives you leverage to manage these expectations. If the contract clearly states that the full balance is required before transmitting deliverables to the client, then there's no surprise when you expect payment before they get their completed video(s). As I also said in my last post, this is sometimes easier said than done. The larger the client, the less likely you are to be able to enforce these terms.
Let’s be honest, doing business with a Fortune 500 company is an exciting opportunity. Moreover, there are plenty of competitors out there who’d love to jump in and take that business from you. This information isn’t lost on the client. They know you’ll put up with quite a bit for the privilege of working with them. At the end of the day, its all a cost-benefit analysis. You take the cash flow hit if the opportunity is worth it. Contract negotiation at the outset ensures that you at least know when you’ll get paid. That way, you can plan accordingly. Nobody likes agreeing to NET90 terms. But when you start bagging big clients, you’ll have to hold your nose and swallow them from time to time.
Statement of Work (SOW)
Sometimes a Contract of Engagement is enough to cover all the bases. Though, with corporate clients, in particular, there is often the need for an additional Statement of Work, or “SOW” document. These are job specific and will clearly define the scope of the project. A good SOW will list the services that will be provided, the dates the services will be performed, who specifically will perform them, the deliverables, the delivery timing of said deliverables, and the payment schedule. As you can see, there’s a fair bit of overlap between and SOW and Contract of Engagement. However, in some cases, both are necessary.
A note for producers: it’s not a bad idea to angle for a “failure to complete” clause in the SOW, the Contract of Engagement, or both. This essentially answers the question “what happens if the client doesn’t complete the project.” This can happen for a variety of reasons, from a change in their needs to the company going out of business before completion.
There are a lot of variables at play here, but they all protect you. For example, what happens if you complete 90% of the work but only receive a 50% deposit? Do you get paid for your completed work? Do you deliver the partially completed project? Who owns the media if the client doesn’t pay the final invoice? Obviously you can go pretty down the rabbit hole with different scenarios. An SOW also protects you from a client asking for more than was agreed upon (aka “scope creep”) as it clearly defines what’s agreed.
Master Service Agreement (MSA)
If you’re going to be doing multiple projects over an extended period for a single client, a Master Service Agreement, or “MSA”, can be useful for defining how that long term relationship will work.
Talent releases ensure your client has the right to use the footage of the actresses and actors the appear on screen in the finished video. They may also stipulate that you (the producer) can use their footage in promotional pieces (like your demo reel) and that the talent will not receive any sort of royalties or residuals (a “full buyout”).
What that last bit means is that once you pay talent for the gig, their footage can be aired an unlimited number of times and be re-edited or repurposed without them getting additional payment. Royalties are a whole other conversation and there are plenty of situations where they are appropriate, but for simplicities sake I’m just covering the most common situation, which is a full buyout.
Talent releases protect both parties and you should keep them on file PERMANENTLY. I can’t tell you how many times I’ve had someone request releases for a project that is years old. File them and keep them, they are important. They’re also a great record of the contact information of all of your talent.
We have recently added language to our releases about invoicing. To any actors or actresses out there reading this, please remember that invoicing after a project is your (or your agent’s) responsibility. Not sending us an invoice means you not getting paid on time. It pains me to even have to say this, but also remember that your invoice should include your preferred mailing address. If we don’t know where to send the check, it’s going to sit in the outbox. We’re way too busy to chase you down for your info. We want to pay you, and to pay you quickly. Help us out and meet us halfway! But I digress…
While talent releases are for (obviously) talent, deal memos are for crew. We typically only use deal memos for large commercial productions or when we are hiring local crew when shooting on location in another city or country. The deal memo is basically a smaller version of the Basic Production Contract, but between the producer and an individual vendor (for example, your Key Grip). The information is similar to the above in that it lays out the expectations from both sides. This includes the vendor's payment timetable and whose insurance covers them when they are on set, among other things.
If you’re a freelancer reading this, I’d say a deal memo is a good move any time you’re working with a new production entity or working out of town. Once you have established a relationship and trust they aren’t as crucial, but they certainly don’t hurt. As with all contracts, the more you have in writing beforehand, the less you have to argue about if and when there’s a conflict.
Non-Disclosure Agreement (NDA)
This can come from either side depending on the situation. A non-disclosure agreement, or “NDA”, is a document that prevents one party from disclosing information publicly and provides for legal recourse for the other party if that privileged information is disclosed in violation of the contract. Often a client will want you to sign an NDA if you’re working with an unreleased product or showing a patented or otherwise secret process.
You may have vendors sign an NDA because you yourself (or your company) is under an NDA with the main client, or you may even want your client to sign one if you’re using a new piece of technology or process that your competition might not know about. NDA’s are fairly straightforward. If one or both parties don’t want sensitive data to get out, they’re a good way to control the flow of information.
Do you have questions about contracts for video production that you’d like to see answered? Have a legal war story you’d like to share? Hit me up in the comments below, I’d love to hear from you!
As always, thanks for reading!