An American Editor

September 2, 2010

Getting Paid: Things for a Freelancer to Think About

Recently, freelancers have been discussing, yet again, being stiffed by clients and how to deal with it. Along with expressions of sympathy from colleagues, several concrete suggestions were given. It isn’t necessary to repeat those suggestions, which were largely based on having a contract, here; rather, I think we should explore more fundamental concepts.

Some editors require a contract for every project; others do not. The primary distinction between the two groups is who is the client  — that is, the former group tends to work directly with authors and individuals, the latter group tends to work with established publishers.

Editors see the contract as a guarantor of payment, until they learn otherwise. Written contracts are useful only if you are prepared to enforce them; otherwise, a handshake is equally as good as a written contract. In truth, the handshake may be even better because the person who will honor the handshake is the person who wouldn’t breach the contract.

But let’s accept that a written contract is a panacea to the ill of having a client try to evade payment (or an editor not do what was he/she was hired for). The question becomes, what should be in the contract?

Usually what is missing is what I consider to be the most important clause of all: the clause that determines the dispute resolution venue, that is, where any dispute that arises must be settled and how it must be settled.

Ever look at the terms and conditions of your credit cards? How about of your mortgage or auto finance loan? Every lender includes these “venue” clauses and we should learn from the specialists. Your contract can include arbitration terms or straight-to-court terms. If arbitration terms are included, think about who you want to arbitrate. Remember that for it to be enforceable, the arbitrator must be independent — it can’t be your best friend, your business partner, your personal attorney.

I prefer the straight-to-court approach, but I don’t want to travel, so I make the venue — on those rare occasions when I use a contract — my local court, in my county, and specifically not the small claims court. In addition, I make sure that the contract states that it is being entered into in my hometown and that my sole place of business is my hometown. This is important for establishing the court’s jurisdiction.

The clause might read something like this:

This contract is entered into in Poughkeepsie, Dutchess County, New York, which is the sole place of business of Freelance Editorial Services, the “editor”.

Any legal action brought to enforce or terminate this contract or any term of this contract must be brought in the Supreme Court of the State of New York located in Poughkeepsie, Dutchess County, New York, which the parties to this contract agree is the proper venue and the court that has jurisdiction over any dispute regarding this contract.

I also include a clause that requires the other party to be responsible for my legal fees and costs should I prevail in any action brought by any party to the agreement to enforce or break the agreement. Importantly, I also include a clause that makes my state law the law that governs the contract. Imagine having to defend your contract based on the laws of another state or country.

Another important clause is the one that sets up service of process for any action brought under the contract. This is especially important for those who deal with nonresidents. No contract is worth anything if it can’t be enforced and it can’t be enforced if a court can’t get jurisdiction over the person. Consequently, I include a clause that says that service of process will be effective if it is served by the usual court-ordered process on the party at the address below the party’s signature and, in the event that such service is unsuccessful,  on the secretary of state for the State of New York as agent for the party.

OK, that covers getting us to court. But is there something else that should be done? Definitely. No matter how you slice it or dice it, the best clause to have in your contract is the copyright clause.

The copyright clause says that the parties agree that you own a copyright interest in the edited version of the manuscript until you are paid in full for your work. Once you are paid in full, your interest automatically expires but until that time, the author agrees that his work cannot be published in any form that includes any of your work and that should it be published, you must be listed as coauthor and are entitled to 100% of any revenues generated, as well as damages of not less than $xxxx for publishing without your consent.

This clause can be your most potent clause, whether in negotiation with the author for payment or in a lawsuit.

These are things to think about. Adding these clauses can protect you, but can also make it difficult to get clients. I am still a firm believer that a written contract is only good for the honest; the dishonest won’t abide by it no matter what. But balm for the soul, which is what a contract is, is sometimes more important than whether it will be effective.

PS: Don’t just write this contract yourself. Hire an attorney to draft a form contract for you. Your specialty is editing, not law; hire the specialist to do the specialist’s work. Just tell the attorney what you want.

PPS: Don’t be surprised if an attorney says, for example, the copyright law doesn’t say you have an interest. The reality is a contract can contain any terms the parties agree to; whether a court will enforce those terms can only be determined by a court when challenged, so put the clause in anyway. Until the U.S. Supreme Court rules definitively and clearly on a matter, all else is conjecture.

6 Comments »

  1. To have and have not:

    “Recently, freelancers been discussing . . .”

    But seriously: the contract serves another, equally important, function besides confirming the agreed-upon price and jurisdictional venue. The contract spells out what the client agrees to pay for and what the editor (or in my case, designer) agrees to deliver for the agreed price, and it establishes a schedule and the responsibilities of each party.

    I have not been stiffed on payment yet.

    I did had one client who merely wanted me to give his stationery (using a logo of his own design) a make over. After several go-rounds at a local coffee-shop with no firm results (lots of technical hurdles involving suitable vector images in a Word template), he emailed me that he thought I as being unprofessional. Oops. Wrong word. End of job. I just walked away from it. I didn’t want to go to the trouble of collecting a couple of hundred dollars from a jerk.

    Several times, I have had to tell my client that they had changed the work scope and I would have to charge more (unexpected substantive changes in late rounds, requests for more that the agreed-upon number of sample layouts, etc.)

    For me, the contract or memorandum of understanding is important as much because it specifies the details of the job as for the final cost I will charge.

    Like

    Comment by Michael Brady — September 2, 2010 @ 8:08 am | Reply

    • Thanks, Michael, for pointing out my blunder (I’ve corrected it). I had originally written something else then changed it this morning (at 1:30 a.m. when I couldn’t sleep) and made the clear error. But, alas, no good deed should go unpunished🙂 — you wrote: “I did had one client. . . .” Can we just agree that even editors need editors?🙂

      Like

      Comment by americaneditor — September 2, 2010 @ 11:41 am | Reply

      • G**d*** subversive fingers. I too did the same thing, I edited the earlier wording and missed something. The stuff you do when you read and edit on-screen.

        Like

        Comment by Michael Brady — September 2, 2010 @ 1:31 pm | Reply

  2. This is a great article that all freelancers should read. I just took the plunge 6 months ago and jumped into copywriting and I couldn’t be happier! The internet is the freelancer’s dream!

    Susan J.

    Like

    Comment by Paid To Write — September 3, 2010 @ 2:12 pm | Reply

  3. Have you ever had to take a client to court with this type of contract in hand? (Being nosey, yes.)

    Like

    Comment by 4ndyman — September 3, 2010 @ 5:11 pm | Reply

    • Yes and no. Yes, in my previous life as an attorney, which is how I learned of the importance of these clauses. No in my life as a freelance editor. First, I rarely (twice in 26 years of freelance editing) work with individual authors; I tend to work with publishing companies. Second, in recent years I did have a payment dispute with a major publisher. The dispute wasn’t over how much or whether it was owed, it was over how long they were going to take to pay. When I didn’t get paid within 30 days, I sent a second invoice with a $25 rebilling fee (a notice of the fee appears on everyone of my invoices and has for 25 years). That stirred a call from the production manager (PM) with whom I had been dealing and who had been unresponsive to my inquiries about payment. She informed me that the publisher doesn’t pay late charges and pays freelancers 90 to 120 days after the invoice is submitted and that PMs had 30 days from their receipt of invoices in which to submit them. This was the first I had heard of this and certainly was not agreeable to me.

      Consequently, I sent a notice by e-mail and by certified mail advising the publisher of my copyright interest and telling them that I do not authorize the publication of or any use of my edited files. If they have already published the books, they are to warehouse them at their expense and not distribute or sell them, and if they have distributed or sold any copies, they are to place 100% of the proceeds into an escrow account of which I am the beneficiary pending further discussions. They are also to notify the original authors of my copyright interest and to advise the authors that my interest can be released upon payment in full of the outstanding debt.

      That got an immediate response telling me that I had no interest to claim and thus they intended to ignore my demands and that I would be paid in due course. I responded that if they were smart they would contact their attorneys before doing something so foolish, and I guess it got passed up the chain because within a couple of hours I had a telephone call from their attorney.

      The attorney reiterated that I had no copyright interest. I asked if he was prepared to take that to court and risk losing because that is exactly what will happen (i.e., it would go to court and they would risk losing, not that it was definite that they would lose). Had he thought about the ramifications should the company lose? What is now a nebulous area of copyright law could be settled in my favor and this would upset every publishing applecart. I asked if it wasn’t smarter to simply cut me a check for what the publisher admits it owes me and is going to pay anyway than to perhaps set a bad precedent and rack up a lot of expense to do so. (And I reminded the attorney of his ethical duty to his client in that regard.) We had some more conversation, about another 5 minutes worth, but the bottom line result was that they sent me a check by FedEx overnight in full payment, including the late fee.

      And, no, I have never worked for that company again, even though they have called me.

      So, my answer is yes and no.

      Your real question, I think, is whether these clauses truly have meaning and are enforceable. The answer is yes. Parties cannot give a court jurisdiction it wouldn’t already have, for example, as I have no contact with Texas, I can’t give a court in Texas jurisdiction over a dispute between myself and a person from Alaska who also has no contact with Texas. But among the courts that could exercise jurisdiction, the parties to a contract can agree to name one the proper place to bring an action. The same is true of other types of clauses, such as which law governs. Courts will look within the 4 corners of the contract before looking elsewhere. This is why, for example, the RIAA was able to choose a friendly venue to file its lawsuits for music sharing, at least in teh beginning, because of the terms of the license “agreement.” The bottom line is that you and your client can agree to anything and it si binding until a court of competent jurisdiction says otherwise, so why not protect yourself?

      Like

      Comment by americaneditor — September 4, 2010 @ 4:21 am | Reply


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