Conclusion of contract

Clear agreements
Lengthy contracts are a nightmare for many artists and other people engaged in the cultural sector. However, formulating and specifying in writing the main rights and obligations of the contracting parties within the framework of a contract is worthwhile. This information includes the following, very briefly:

  • the exact names of the contracting parties (including addresses and, in the case of legal entities, the legal forms and agency relationships),
  • the precise description of the work or service to be delivered,
  • the (completion) period,
  • expenses and incidental costs,
  • insurance and transport issues,
  • possible copyright issues.

Here you will find a checklist (German, English version coming soon) with information for contract negotiations and or the free drafting of important contractual clauses in the international cultural sector, e.g. artist, guest performance, engagement, concert, service and coproduction contracts, etc. The checklist is neither exhaustive nor can it replace legal advice; it merely serves as a guide.


Verbally or in writing?
A contract comes into being when the contracting parties have reached an agreement with regard to the respective performance obligations, i.e. if there are two identical declarations of intent concerning the conclusion of the contract. The contracts concluded are not bound by any particular form. As is often the case in practice, they can be concluded verbally, for example by phone or over a handshake at the studio. No further written confirmation is required for the contract to be effective. However, if there are disruptions during the execution of the contract, for example, if deadlines are exceeded, payments are not received (on time), there are disagreements with regard to the fulfilment of the order etc., a written contract may be of great benefit, if not necessary. This is because anyone who refers to a contractual obligation on the part of the other party must also be able to provide proof of this obligation.

Example:
During a phone conversation, a sculptor agrees with a customer to create and sell a sculpture for 1,000 euros. After the sculptor has delivered the sculpture, the customer pays only half of the agreed sum because the work does not meet his expectations and has allegedly been delivered late.

The sculptor may be faced with a problem if he only has a verbal contract: While the contract between him and the customer is effective, it will be hard to prove that the work meets the agreed requirements and has been delivered on time if the customer disputes this. For this reason, it is not advisable to enter into verbal contracts without witnesses. Even a few points that are signed off on personally by both sides are preferable to ‘no contract at all’ in the case of a dispute.


Silence with respect to a ‘commercial letter of confirmation’
If the contracting parties enter into a verbal agreement and the contracting partner subsequently sends the artist a letter of confirmation, the artist should immediately object to any content that does not correspond to the preceding verbal agreement. Otherwise, the risk is that his/her silence could be interpreted as acceptance of the content of the confirmation letter. This principle, which was formerly established in commercial usage, is recognized in case law and applies to all self-employed entrepreneurs.


Applicable law and jurisdiction
In the case of a contract between contracting parties headquartered in different countries, it is important to agree on the applicable law and jurisdiction. This ensures clarity with regard to the applicable legal regulations. If, for example, it has been agreed that German law will apply, the rules of the German Civil Code (BGB) shall apply with respect to the conclusion of a contract, matters of form, rights and obligations, etc.
The same applies to the jurisdiction. As a rule, the contractual partner will be sued at the location of its headquarters, i.e. possibly abroad. However, there are exceptions and therefore it is useful to agree in writing and, if possible, outside of any general terms and conditions (GTC), on a place of jurisdiction (not a specific court). Such jurisdiction agreements apply to legal entities and thus come into play when an artist, a theatre company, or an artist collective enters into a contract as an independent company.


Termination of contract
Depending on the agreement, the contract shall end when the purpose of the contract is achieved, once the contract period has expired or if the contract is cancelled. It is especially important to establish appropriate regulations concerning the termination of the contract in the case of a long-term (e.g. service) contracts.

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