Copyright Laws: Verbal Contracts

Oral Copyright Contacts Sometimes End Up Here

Oral contracts do carry legal weight. Courts enforce them when they can. The problem they face is deciding which version of the verbal agreement to uphold. Copyright cases in this respect can prove very contentious. Undocumented claim and counterclaim wrestle for control of the reproduction of a creative work and the proceeds it generates. Memories are inexact and influenced by subsequent events. Written contracts have no such problems.

Features

A nod of the head, a handshake, a phone conversation, an e-mail, anything signally "mutual consent," establishes an oral contract. Before it is "legally binding," though, an offer must first be made, its terms and conditions agreed upon, and "mutual consideration" given and received. The latter typically involves an exchange of money for a good or service. In copyright law, this most often involves an advance against royalties upon delivery of a portion of an original manuscript.

Misconceptions

Just because an oral contract is legally binding does not necessarily mean each party's interests are fully protected. Any ensuing breech of contract lawsuit rests on very thin air. Lacking tangible evidence, the court, basically, must rule on the credibility of the contesting party's versions of the agreement. To avoid such "he said, she said" disputes, judges often arbitrate a settlement between plaintiff and defendant. More often than not, both parties come away disappointed but not empty-handed.

Prevention/Solution

Short of a signed, written agreement, precautions can and should be taken. Documentation of any kind gives credence to any subsequent legal claim a party makes. E-mails, memorandums, correspondence, pay stubs, outlines, chapter or script submissions, editor-annotated drafts, etc., prove a working relationship existed akin to the one offered and accepted. They also show you have been acting in good faith and living up to your end of the agreement. But, at best, an oral agreement is a rough outline of rights and responsibilities. To nip disagreements in the bud, exchange memorandums of understanding covering details of the business arrangement as they arise.

Warning

Even so, a court will never enforce an oral copyright agreement in cases where "statute of fraud" laws apply. Here nothing less than a legally valid, written contract will do. Absent one, a court will throw out any copyright infringement lawsuit brought against a third party. Similarly, it will dismiss any suit involving failure to deliver a manuscript, film or other copyrightable items within a year. The fact that the original timetable may have been patently unrealistic does not matter. Depending on the state, oral agreements to provide "creative" services may, however, be enforceable.

Considerations

A copyright assigns ownership and control of an original work to its creator. Whoever holds the copyright decides where, when and how the work will be reproduced and is monetarily compensated for its use. Given the stakes involved, is it prudent to enter into a hastily-formulated oral contract? Expediency has its virtues; oral contracts allow parties to focus totally on the work at hand. But a hastily formulated one rarely fleshes out what each party expects of the other when it turns into a marketable product.

References

• Can you collect on a verbal agreement?
• Copyright Law and Practice
• Verbal Contract Information

Resources

• Contract Law - An Introduction
• The Law & Verbal Agreements