Contracts 101 for Artists

Contracts are legally binding agreements that occur in almost every aspect of our lives — both personal and professional. Below are helpful answers to fundamental questions of contract law that may concern and affect artists throughout their careers.

What is a Contract?

A contract is a legally binding agreement made by two or more parties. A contract must meet several requirements to be enforceable by a court of law. In New York, a contract is binding if there is offer and acceptance, consideration, an intent to be bound and mutual assent.

• Offer and Acceptance: There must be a clear or definite offer to contract (“Do you want to buy this painting?”) and an unqualified acceptance ("Yes! I do!”) in order for a contract to be enforceable.
• Consideration: Each party involved in the contract has to promise or provide something of value to the other. There is no enforceable contract without such an exchange.
• Intent to be bound: All parties involved in the contract must be "capable" of making a contract and intend to be bound by its terms. The parties must understand what they're doing and must intend to be bound by their agreement.
• Mutual assent: This is also sometimes referred to as a "meeting of the minds." Mutual assent signifies that the parties agree to the essential terms they are setting.

Is an oral agreement an enforceable contract?

A contract does not always have to be in writing to be enforceable in New York. If the requirements demanded by NY Law to create a contract (offer, acceptance, consideration, intent to be bound and mutual assent) are present, it does not matter that the terms were not set down on paper. Therefore, an oral agreement, which meets all of these requirements is an enforceable contract in New York. A contract may also be implied in fact from the facts, circumstances, and conduct of the parties—meaning, if the parties act like they have entered into a contract, a court will likely find a binding contract was created.

What are some common clauses in standard contracts?

There are some common languages and phrases that often appear in standard contracts. Some common boilerplate provisions in contracts to be aware of include:

• Attorneys' fees: In the event of a legal dispute, the party that loses must pay the winning party's legal fees.
• Arbitration: Any disputes about the contract must be resolved through arbitration proceedings, not in a lawsuit.
• Choice of law: In the event of a dispute, a choice of law provision determines which state's legal rules will be applied in the lawsuit.
• Jurisdiction: In the event of a dispute, a jurisdiction clause determines where (in which state and county) the lawsuit must be filed.
• Waiver: This permits the parties give up the right to sue for breach of a particular provision of the agreement.
• Statute of Limitations Clause: A statute of limitations clause changes the statute of limitations which applies to litigation relating to the subject matter of the contract. For example, the law may provide for a six year statute of limitations for litigations, but the parties can contractually agree to shorten that period, to eliminate the "discovery rule."
• Severability: This permits a court to take out an invalid provision and still keep the rest of the agreement intact.
• Integration: An integration clause says that the written contract represents the final agreement of the parties. Often, it explicitly states the any prior agreement or discussions of the agreement are replaced by the written contract and that any further modification to the contract must be in writing.
• Limitations on damages: This sets a cap or otherwise limits the types of damages that may be awarded in a contract dispute.
• Liquidated Damages Clause: Where it can be difficult to calculate actual damages, it may be appropriate to include a "liquidated damages clause" in a contract. The damages are "liquidated" in the sense that the contract sets forth a specific sum that will be paid as damages, whatever the actual amount of damages may be.
• Warranties: These are promises or assurances made by each party regarding various contract obligations.
• Indemnity: In an indemnity provision, one party guarantees that it will cover the costs of certain disputes brought by third parties (that is, people who are not parties to the agreement).
• Confidentiality: This guarantees that the parties will not disclose certain information.

This website includes information about legal issues and legal developments under New York Law. Such materials are for informational purposes only and may not reflect the most current legal developments. These informational materials are not intended, and should not be taken, as legal advice on any particular set of facts or circumstances. You should contact an attorney for advice on specific legal issues.

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Special thanks to Emily Wajert for contributing this article.