This article is written by Akshay Jaulkar, pursuing Diploma in Advanced Contract Drafting, Negotiation, and Dispute Resolution from LawSikho. The article has been edited by Ruchika Mohapatra (Associate, LawSikho) and Dipshi Swara (Senior Associate, LawSikho).
Like any other industry, the modelling industry also needs robust and well-defined agreements to create a win-win situation for both the Model and the Modeling Agency.
In any situation, it is crucial that the parties involved are satisfied with the agreements between them which later yields better output and meets client requirements. Most Modeling Agencies works as an aggregator of profiles suitable for the fashion, film, advertising, and marketing industry.
Those models who are well established can hire managers and/or lawyers to get the agreement reviewed, but what about those who are struggling to get any work and are completely naive to the complexities of the modelling world? Chances are either they might get exploited due to zero or very limited knowledge of the legal aspects of the contracts or may get trapped into a vicious cycle of dissatisfaction.
Some might overlook or simply neglect the agreement out of happiness, desperation or as a sigh of relief that they finally have a chance to show their talent to the world. Another factor for such desperation is that most of the models earn until they reach the age of up to 40 years which means they have a very limited time in the modelling industry to reach and climb up the ladder in order to achieve success, money and fame.
As compared to an agency, models are more vulnerable and therefore, it is necessary for a model to know for which project their portfolio will be used, duration of the agreement, remuneration that will be paid, agency’s commission, whether the agency possess all the necessary licenses to perform such works, the governing law and the terms for termination of the agreement etc.
Types of modelling agreements
Typically, there are 4 types of modelling agreements.
- Mother agency agreement,
- Exclusive agreement,
- Non-exclusive agreement,
- One time agreement.
Let us take a quick look into each of the aforementioned agreement types.
Mother agency agreement
This type of agreement is usually suitable for a newcomer. Mother agency is the agency where the model is signed first and that will provide opportunities to the new models due to their well-established contacts. Such agencies promote their models either directly for the client or to other agencies and in return seek commission (typically 5-10%) from the model’s income. Since there might be layers of the agencies while the model actually performs for the client, for a model, it is essential to negotiate and agree upon a better structure of commission with the mother agency.
Such agreements put a restriction on the models and obligate them to perform exclusively for agency nominated brands or markets. These agreements are more common for fashion and editorial models. Though the model can work with several agencies at the same time but are restricted to work in one market for one brand. Usually, under such agreements, the models get paid better due to the exclusivity that they must maintain.
Such agreements are more common for commercial models. They are free to work with many agencies at once. Many models prefer to work in such agreements as it offers flexibility. The model may not receive hands-on experience of the agency in the long term, but due to several opportunities, the model may earn better and may even save on the commission to be paid to the agencies.
One time agreement
As the name suggests, these agreements are made with the modelling agency only for one project. Such an agreement clearly mentions what project the portfolio will be used for. Typically, the model is restricted to work with similar brands until the completion of the project.
Essential clauses in a modelling contract
To safeguard the interests of the model and the modelling agency, the following are the few clauses that shall essentially form the part of the agreement:
Obligations of the model and the agency
Obligations of the parties shall be clearly defined to avoid disputes that may arise due to assumptions made by one party for another or vice versa. Such a clause defines the precise responsibility and accountability of each party.
Along with the general information, a model has to give a lot of personal information such as body measurements, marital status, photos, videos etc. while entering into an agreement with an agency. The rightful use of an individual’s data is the ultimate responsibility of the agency. Misuse or misplacing such significant data may lead to unforeseeable problems for the model and therefore, terms related to confidentiality and its breach shall be clearly mentioned.
Term of the agreement
For how long the model and the agency has to deliver their obligations under the agreement is defined under this clause.
Remuneration and commission/payment terms
Whether a newcomer model or a well-established model, the amount that will be earned by the model generally depends on what percentage of the model’s income will be charged by the agency as commission. In general, the top modelling agencies charge up to 20% of the model’s earnings.
In the case of mother agency agreements, there can be involvement of several other agencies, in such case, the commission percentage shall be well negotiated.
Representation and warranties
A model shall warrant that the agency can use his/ her portfolio for providing opportunities whereas the agency shall warrant that it shall make the rightful, and legal use of the model’s data. In addition, the agency shall warrant that it possesses all the required licenses, permits, approvals and further, possesses established contacts in the industry to perform as a modelling agency.
Such a clause will protect the models from the consequences if they unknowingly enter into an agreement with a fake agency.
Termination and consequences
Termination and its consequences, in the event of default and in the event of force majeure shall be properly drafted. It is to be noted and negotiated that the termination rights shall be equal for the model and the agency and further, the model shall be properly compensated, in the event of termination.
Liquidated damages or limitation of liability
In general, the liability of both parties shall not exceed 100% of the agreement value. However, in the event of fraud, misrepresentation, spreading fraudulent information, gross negligence, personal or bodily injury, the liability shall not be limited.
With the inclusion of this clause, both the parties indemnify, save, defend, hold harmless each other against the claims, actions, demands, judgements, costs, expenses, losses and damages that may arise while performing obligations under the agreement. It is the best way to transfer the risk between the parties. This clause also helps to protect the parties against any indirect or consequential damages from the third parties.
Governing law and dispute resolution
In the event of any default, if any party wants to take legal action against the other, it is better to already mention such an arrangement in the agreement or otherwise, the dispute may even start for deciding where to resolve the dispute. The agencies and models are spread around the world so therefore it becomes necessary to agree upon a law that will govern the agreement, the procedure for the dispute resolution, the jurisdiction under which the agreement shall be interpreted etc.
Consequences of breach of a modelling agreement
In the event of a material breach of any of the obligations under a modelling agreement, generally, a warning notice is given to the defaulting party to rectify within the specific time period. After which the settlement may be done with compensation against the claim made, or by seeking injunctive relief from the court and at last by terminating the agreement.
For a model, especially for a newcomer, it is advisable to hire an agency that is established and known for transparency in the market, even if they charge more or take a major cut from the model’s remuneration, but by doing so the Model will always be in safe hands and protected. A model can choose under which type of agreement he/she is willing to work, according to its suitability, however, the operative and typical clauses of the agreement shall be carefully reviewed, well negotiated and properly drafted.
For the modelling agency, having a well-drafted agreement will save a lot of time and prevent avoidable disputes. Since mostly the models are not from a legal background it is advised to use a simple and lucid language for the agreement, if possible, a copy can also be made in the native language of the model. A well-drafted agreement will further improve the modelling agency’s image in the market as a reputed and transparent agency. In short, a win-win situation for all the parties involved can be achieved.
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