It’s all nice and good to be able to negotiate when there is a contract, a fancy piece of paper that an attorney’s been paid to stick “wheretofors” and “hereafters” all over. But what happens when you don’t have a written contract? What happens when it’s a conversation over coffee and a handshake?
- Is there a contract even if it’s not written? Maybe. A contract requires three things: an offer, an acceptance of that offer and consideration. No, not “pleases” or “thank yous.” In this context consideration means that one party is giving the other party something of value in exchange for their promise. When you buy a car, you offer to buy the car for a particular price, the seller accepts your offer and promises to sell the car to you for that price, and the money you give the seller is the consideration. If you’ve got those three things, you’ve got a contract.
- How do you negotiate something that’s not written out? You negotiate unwritten agreements all the time, you likely just don’t think of them that way. Last night choosing where to go to dinner with friends? That was a negotiation. You stated the things that were most important to you, time, type of food and area of town, and then used those parameters to figure out where to go. Do the same thing when hashing out an oral agreement with a business partner: explicitly state the things that are most important to you, rate, deadlines and payment terms, perhaps, and then use those things to help define the conversation.
- Resist the urge to take positions and tick off decisions along the way. An interest is “I want to eat” a position is “I want to eat dinner at 7pm.” Resist the urge to take positions when negotiating orally. Define your parameters of the negotiation with your interests, not your positions. This gives you more room to be creative when putting the deal together (it is easier to fulfill an interest than it is to meet a position). You also don’t want to agree to smaller things along the way during a negotiation. Everything you agree to during a negotiation is one more thing you cannot use creatively to make the deal better later on. For instance, if I agree early on that the due date for the project is the end of the month, that decision becomes a pivot point that everything else in the negotiation now revolves around. That might be OK if that thing is really really really really important to me, but otherwise it’s too restrictive to be helpful.
- After the handshake, and before you start working, say “thank you.” My friend Kohel Haver has an excellent suggestion for artists who regularly engage in handshake deals: send Thank You notes. And in that Thank You note summarize what you’ve agreed to. The whole reason we write out contracts is so we have some sense of what the parties were thinking when they made their agreement. A quick note summarizing what you’re going to do with one another is a fantastic way of recording what you were thinking at the time. Plus, if the other person notices something in the note that they didn’t think was part of your deal, they can talk to you now, before the work starts, rather than later when things are messy.
Speaking of Kohel, we’ll be teaching a workshop on contract law & negotiation for artists this Saturday at the Stumptown Comics Fest. The workshop starts at noon in the Idaho room and will last about two hours; the first hour is all about the joys of contracts, the second is focused on negotiation. If you are at all serious about making art your career, it promises to be two hours well spent.
Categories: Making Sense of Contracts