The Art of Contract: Artist & Brand Collaborations

Reko Rennie’s custom art works commissioned by Heineken® 0.0 for the F1® Australian Grand Prix. All images by Bill Murray courtesy of Heineken and Getty Sport.

In this series of contract-themed articles, Director and Founder of Guest Work Agency, Alana Kushnir, shares useful tips on the types of contracts which regularly arise in the art industry. From artist and brand collaborations to public art commissions, here are some suggestions for you to consider before signing on the dotted line.

Suggestion 1: Explain the Design Approval Process

When working on a new or adapted design for a brand collaboration, it’s essential to explain the approval process for both the artist and the brand. For example, once the artist submits the design, can the brand request changes be made? If so, do any suggested modifications need to remain consistent with the original brief provided to the artist? How many modification requests can the brand make? One, two or as many as they like? Explaining the design approval process in the contract not only helps both parties understand their rights and obligations from a legal perspective, it also provides guidance in managing everyone’s expectations in the process of undertaking the collaboration.

Suggestion 2: Modify the Scope of Permissions to Suit

An essential component of an artist and brand collaboration is the rights that the artist gives to the brand to utilise their design. In legal speak, this involves the granting of an ‘assignment’ or a ‘licence’ of intellectual property rights in the design.

An assignment involves the actual transfer of ownership of the design’s intellectual property rights to the brand. A licence involves the artist retaining ownership of the intellectual property rights in the design, and grants the brand permission to exercise those rights.

Often, the granting of a licence, rather than an assignment, is enough for a brand to be able to do what they plan to with the design. The key here is ensuring that the scope of the licence is not overly broad or narrow, but just right. Some questions to consider include: will the design appear on one product line only, or across products for an entire seasonal campaign? Will the use of the design be exclusive to that brand, or can the artist use it in other contexts, such as an artwork they then sell via a gallery? Also keep in mind that the scope of permissions granted should be factored into the payment that the artist receives. The broader the scope of permissions granted to the brand, the higher the artist fees.

Suggestion 3: Exclusivity is Not Always OK

One component of artist and brand collaborations that has its origins in the marketing world is the concept of exclusivity. Exclusivity is an important incentive and business strategy for brands when collaborating with artists. This can translate in the contract as an obligation on the artist to not work with, or not promote other brands in similar categories of goods or services over a certain period.

But are all claims to exclusivity, ok? When is it acceptable to push back? Many jurisdictions, including Australia, have laws which regulate what are known in legal speak as ‘restraint of trade’ clauses. The economic rationale behind the regulation of such clauses is that restricting competition goes against the public good.

In general, whether a ‘restraint of trade’ is legally enforceable depends on factors such as how reasonable the restraint is, factoring in how long the restraint is in place, how geographically broad it is and whether it is standard business practice in the relevant industry and the bargaining strengths of the parties. While an expectation of some exclusivity is generally common in art and brand collaborations, whether a ‘restraint of trade’ clause is legally enforceable in a particular contract is the type of question Guest Work Agency strongly recommends seeking legal advice on.

Suggestion 4: Consider an Artist’s Many Talents

Nowadays, many brands expect an artist they are collaborating with to play a role in the advertising and promotion of their project. This role might include having the artist attend the launch of their project, participate in interviews with the press or promote the project across their social media platforms. These types of arrangements are more commonly seen in influencer agreements. They reflect the desire of brands to create authentic story-telling experiences.

It is essential that artists understand that these types of requests are not trivial for brands, but rather, are important commitments that add value to the project. This, in turn means that the added value should equate to higher artist fees. Similar to defining the design approval process in the contract, outlining artist talent artist obligations not only helps both parties understand their rights from a legal perspective, but also assists in managing everyone’s expectations in terms of what the collaboration process will involve in practice.

Suggestion 5: Understand the Different Forms of Payment

Ah the big one: the fees. How long is a piece of string, you might ask? Given the varying nature of artist and brand collaborations, calculating a reasonable payment for the artist can be exceptionally difficult. This is not a case of one-size fits all.

That being said, what should always be considered as part of the calculation process are the different types of payments that can be made. For example, will the artist be paid a one-off, flat fee? Will they be paid by way of royalties? Or might they be paid both an advance as well as royalties? If royalties are desired, it is important to ensure that the contract clearly articulates how royalties will be calculated, such as whether the percentage is based on total sales or number of units produced, net or gross, and if those amounts are to be determined before or after tax.

Another type of payment that tends to be treated as an afterthought is ‘in-kind’ products and services. Consider for example, if the design is applied to a product - will the artist receive that product? How many quantities of that product will they receive? If the project involves an event, will the artist receive tickets to the event, and how many? While in-kind payments don’t (and sometimes shouldn’t) have to be made instead of a flat fee or royalties, they can carry their own value for the artist.

Think of the value of the product being added to the artist’s archive for example. As our Archives and Collections Manager, Laura Brandon, suggests: ‘the artwork itself is not the artist’s only valuable commodity. The story and ongoing documentation of how an artwork is envisaged and realised is fundamental to an artist’s practice.’

Entering into an artist and brand collaboration and want to make sure you’re protecting yourself? Check out our legal and advisory services we provide and contact us for assistance.

The contents of this article are of a general nature only. They are not and should not be used as legal advice.