Personal Service Contracts - John J. Tormey III
“This article is not intended to, and does not constitute, legal advice with respect to your particular situation and fact pattern. Do secure counsel promptly, if you see any legal issue looming on the horizon which may affect your career or your rights. What applies in one context, may not apply to the next one. Make sure that you seek individualized legal advice as to any important matter pertaining to your career or your rights generally”.
1. What Items Should Appear In A Personal Services Contract?
Personal services agreements can be fairly complex in terms of the issues that they present - yes, even if the total compensation payable thereunder is not too large. It would be beyond the scope of this article to set forth an exhaustive list of issues to spot. But some of the key issues for talent, in a personal services agreement in the entertainment world, are considered to be:
G. Worker Status.
There are actually quite a number of other issues to consider, in addition. The above list will certainly start the dialogue with any prospective hiring party, however.
2. What Should Be Avoided In A Personal Services Contract?
Again, it would be beyond the scope of this article to set forth an exhaustive list of all traps to avoid in personal service contracts. Indeed, there are probably at least as many traps, as there are in-house entertainment lawyers working at these hiring corporations! (and I say this with all due respect to my friends who work in-house, of course). But some of the more colossal mistakes that an artist could make might be as follows:
A. Taking the entirety of one’s compensation as contingent or “back-end”. The fact of the matter is, if the artist is a professional, or if the artist otherwise values his or her own skills and time, then the artist’s work product is valuable. The “buyer” of services and work product should be required to put at least some earnest money on the barrel, first. And, the artist should not commence services until those numbers first show up in the artist’s bank account, whatever the numbers are negotiated to be.
B. Leaving the Term, Territory, Media and Exclusivity provisions vague. Artists have found their careers paralyzed for huge amounts of time, due to mistakes like this. No non-lawyer should try to write or edit these clauses on his or her own. No one should blindly sign on to these clauses as offered, particularly if they are vague. (In other words, don’t try this at home. Get professional help, period).
C. Failing to limit the Term to a reasonable period of time. “Perpetuity”, if ever agreed to, is guaranteed to become one’s own private Hell. That Hell would be forever. Leaving the Term quantitatively vague is just about as bad a mistake as calling it “Perpetuity”. Life is too short and valuable to make open-ended and blank-check commitments to people.
3. How Can One Tell If A Contract Is One-Sided In The Hiring Party’s Favor?
The answer is, if the hiring party furnished it to an artist, then it is one-sided in the hiring party’s favor!
The hiring party is under no obligation to protect the artist’s interests in a legal document. (If upon receipt of the document, you snooze, then you lose).
And many entertainment lawyers can speak to this phenomenon, from personal experience. Many of us have drafted and reviewed hundreds or even thousands of contracts, many of which were personal service agreements. If polled, few entertainment lawyers can remember even one contract first offered by a hiring party to any talent clients, that was ever fair.
There is a reason why many in the entertainment industry refer to the first-offered form as the (euphemism) “F.U. Form”. Once an artist retains counsel to represent the artist, one of that lawyer’s first functions is to get the hiring party to cough up a real form in lieu of the “F.U. Form”, if not take over the drafting entirely.
And yes, signing any entertainment industry proposed personal services agreement, either: (A) on-the-spot, or (B) in the version exactly as first offered for signature with no edits made; usually turns out to be a mistake.
My law practice includes the fields of entertainment and publishing. If you have any questions about copyright law or any other legal issues which affect your career, and require representation, please contact me:
John J. Tormey III, PLLC