A contract is a binding agreement between two or more parties. In order for an agreement to be binding, there must be a few important features that are required for all contracts. In addition to the key elements of a contract, some contracts must be written in order to be effective (such as an assignment of copyright). However, it is sometimes possible to form a contract verbally, without putting anything into writing.
Verbal contracts can present a variety of risks and concerns:
- Generally speaking there is no physical evidence of the contract, and so it is up to the parties to demonstrate that the contract has been formed
- Because the contract is not written, there is no agreed-upon contractual language and so there is a much higher chance that the parties may disagree on the terms of their agreement
- Both of the above concerns can present significant issues if any party has to try to enforce the agreement, as courts are generally hesitant to apply legal consequences without written evidence of agreement between the parties
- In certain cases there may be other people who require you to prove that you have a contract (such as if you are trying to sell an artistic work that include any commissioned elements). If a third party requires you to have a contract in place then you may not be able to rely on a verbal agreement, and could have to prepare written terms after-the-fact
Artists should be careful about entering into or relying upon verbal contracts. The more important an agreement is, the greater the importance that the parties enter into a written agreement that clearly sets out the terms. Unwritten contracts come with significant uncertainty and risk, and leave open the potential for issues to arise down the line.