Regulations that you should observe in all contracts

A choice of law and jurisdiction agreement is particularly important if you and your contracting party are from different countries. It determines which law applies to the contract and which courts have jurisdiction in the event of a dispute. See the subchapter on cross-border contracts.

A contract should always contain a clear and unambiguous description of the services to be provided. This is important to avoid misunderstandings.

The type, scope, and quality of the services to be provided should therefore be precisely defined in the contract. In the field of performing arts, this also includes details such as the number of rehearsals required, or the number of performances.

The amount of remuneration, currency, and payment terms should always be specified in a contract. You should also clarify whether the remuneration is to be paid in instalments or as a total amount and whether a deposit is required. In addition, the contract should also stipulate whether the remuneration is subject to certain conditions.

It makes sense for the contract to specify whether the artist will receive a flat fee or an hourly rate for the provision of services.

The contract should also state whether the artist is liable for VAT and whether the agreed fee is a gross or net amount. See the chapter on taxes.

If the artist or cultural worker has to travel to another location to provide their services, transport, accommodation, and/or catering costs will be incurred. In addition to remuneration, the contract should therefore stipulate whether the client will cover these expenses.

The contract should also specify who will organise transport, accommodation, and catering. It is advisable to make provisions for a possible change to the reimbursement of costs if circumstances change (e.g. if the contractor cancels at short notice and cancellation costs for accommodation are incurred).

Please note: Clarification of the reimbursement of expenses is particularly important in cross-border activities.

The contract should stipulate the period within which a service is to be provided and whether certain dates and deadlines must be met. It may also be useful to include provisions for any delays in performance in the contract.

Example: Final submission of an artistic work, dates for rehearsals and performances, and fittings for the production of a fashion design.

Questions about taxes, customs duties, and social security are particularly prevalent in the case of cross-border contracts. In the event of cooperation with a party based abroad, the contracting parties should make clear arrangements as to who is responsible for the payment and level of (withholding) taxes and social security contributions.

Also see the section on taxes, customs duties, and social security in the subchapter on cross-border contracts.

Attention: If you are working across borders, you should find out in advance where and how you have to pay tax on your income, and where you are covered by social security. See the chapter on taxes and the chapter on social security.

If you and your contractual partner have concluded a contract, you should also agree how you can terminate the contract and whether it should be possible to withdraw from the contract. 

Attention: This also includes an agreement on the manner in which the contract is to be terminated (e.g. in writing), and whether notice periods must be observed.

The contract should also stipulate whether premature termination should trigger certain consequences for the terminating party. This could include the agreement of a contractual penalty, the payment of damages, or the return of payments already received. 

Provisions should also be made for cases of force majeure, and it should be clear how the parties wish to deal with them. To see how force majeure is dealt with in Austrian contract law, visit the relevant subchapter. 

The regulations on the termination of contracts also differ depending on whether the contract is for a fixed or indefinite term. Unless otherwise agreed, fixed-term contracts end when the agreed term expires. Open-ended contracts can be cancelled. The deadlines and exact modalities of cancellation should be agreed upon.

When artists conclude contracts, they typically contain provisions on the copyright utilisation of their works of art or artistic performances.

Example: You are an actor and sign an employment contract with a theatre. In the employment contract, there should be a provision as to whether you transfer the rights to use your acting performances to the theatre and, if so, what remuneration you will receive for them.

Example: You are selling a work of art. You and your contractual partner should clarify whether or not you are also transferring the exploitation rights to the artwork when you sell it.

The following points must be taken into account when regulating rights of use:

• Rights of use can be granted for a specific duration. The duration can be limited to a period of time (e.g. a few months, for a specific event) or the rights of use can be transferred until the end of the copyright protection period. At the end of this term of protection, originally protected works become "public domain" and can be used freely. In many countries, the copyright protection period for works of art is 70 years from the death of the author. The term of protection for artistic performances is usually shorter. See the chapter on copyright.

• Use can be territorially restricted (to certain countries) or authorised worldwide. 

• The contract should specify the ways in which the contractual partner is permitted to use the work of art. There are many ways to utilise artistic performances under copyright law. These include, for example, the reproduction of works of art (e.g. photocopying), the performance of a play, posting a work of art on the internet, and the adaptation of existing artwork (e.g. shortening of a play). See the chapter on copyright to familiarise yourself with the most important types of exploitation.

• Rights of use can be granted exclusively or non-exclusively. If the rights are granted on a non-exclusive basis, the artist may continue to commercially exploit the work of art themselves and authorise others to use it.

The legal systems of most countries contain regulations on how to deal with defective service provision (warranty/liability). However, the legal regulations on defective performance vary greatly from country to country. It may make sense for you and your contractual partner to make arrangements for dealing with warranty cases, taking the national law applicable to the contract into account. 

As artistic quality can only be assessed subjectively, it should not be covered by warranty claims.

Info: See the section on warranty/liability in Austrian contract law for the scope of warranty cases under Austrian law.

The contract should also clarify the extent to which the contracting party is liable to the other for culpably caused damage (e.g. one contracting party’s equipment is damaged during a performance).

If confidential information is exchanged as part of the collaboration, a confidentiality clause should be included. This should stipulate 

• which information is confidential,

• how it is to be treated, and

• which parties are covered by the confidentiality obligation (e.g. the employees of a company as well as the management).

It is often the case that the parties agree on keeping the amount of remuneration confidential.

The contract can also include other agreements that are relevant to the collaboration. However, all agreements should be formulated clearly and unambiguously in order to avoid misunderstandings.

In contracts with artists, for example, agreements could be made on press and marketing measures, and whether artists provide their own advertising material.