Originally published as Chapter 13, in the book titled The Real Business of Photography , Allworth Press, NY ISBN 158115-350-3

Protecting Yourself
You can protect yourself in several ways when you are concerned about the creditworthiness of your prospect. Providing an estimate that contains one or more of several conditions is the key. Here are examples of language that can help you weed out bad payers and/or make your likelihood of being paid higher. I do not recommend using these conditional terms when you have faith in your prospect’s ability to pay. They can raise red flags in your prospect’s mind.

A “condition precedent” is a legal term that refers to a term or condition in an agreement, which precedes an occurrence to be governed by the term or condition. The principle is that if a party knowingly accepts a conditional statement before the assignment is begun, then the party cannot later claim not to be bound to comply. To establish a condition precedent you have to present it to the prospect before any work is done and in a timely enough fashion that the prospect could find another supplier. The best way to set a condition precedent is in the estimate and subsequent confirmation letters sent to the prospect. When terms and conditions are presented only on the client’s invoice they can be unenforceable because they are presented after the fact, that is, after the work is done and the client cannot back out. That is why estimates and confirmations are among the best legal assets that you can have. They represent the deal that was made before the job was begun, not after the job is done. Here are two clauses that help protect you in the event you are dealing with a possible credit risk.

Option 1
The rights to use the images supplied as part of this assignment do not transfer to any party until full payment of all money due is paid. Failure to make full payment means that any use of the images is a copyright infringement, which may be prosecuted under federal law.

This option is a warning to the prospect that you might turn what would normally be a collection claim into a copyright infringement claim. Keep in mind that prosecuting copyright infringement claims can only be done in federal court. It is expensive to bring a case in the federal courts, so you are unlikely to actually do it unless the fees and expenses are high enough to warrant it, and the use of the images is substantial enough to bring an award of damages sufficient to cover the costs of the suit, the money that went unpaid, and more.

Option 2
The rights to use the images supplied as part of this assignment do not transfer to any party until full payment of all money due is paid, therefore payment must be made upon delivery of the work commissioned under this agreement.

This option is a really a COD (cash on delivery) clause with a rationale attached for having it. It does not threaten a lawsuit. It threatens something much more immediately problematic, the prospect of not getting work they need to collect from their client. You can be assured that almost no one will ever accept this condition. So why offer it? You offer it because the prospect appears to have credit/payment problems, and you can offer to drop the clause for an advance on fees and expenses. If you use it, you cannot mince words when explaining why. You simply tell the prospect that you are concerned about their ability to pay, and you have to protect yourself by a COD policy or an advance. If your prospect professes to have a good credit record, ask them to demonstrate it by a credit report or references. If that is refused, you might not need this client. Chances are they won’t work with you anyway. Companies that consistently have trouble paying their bills don’t assign work to photographers who show the resolve to collect what is owed to them. The best thing you can do if you have that kind of prospect is walk away. Then go find a good prospect, that is, one who pays its bills.

(c) 2004 Richard Weisgrau [contact] [bio]