Can client sue me?

[Mark Suszko]

“No contract was ever signed“. Is there any paper or electronic trail for this job at all? A conversation that covers the deliverables, delivery date, and the payment?

IANAL, but you have several things going on here, and I have to address all of them.

The very first is, going by what you posted, you can’t prove you even had a contract. A verbal agreement that can’t be proven, doesn’t exist. The good news on that is, if there is no contract, there is also no clause in the non-existent contract about whom you can or cannot talk to about anything.

A contract that a judge will accept in a court consists of three things: An offer, an acceptance, and “consideration“, which is a fancy name for money exchanged (as little as a dollar) to “seal the deal”. Without consideration, the contract doesn’t represent a complete “meeting of the minds”. The offer states what is to be exchanged. The acceptance confirms you both have the same understanding of those requirements, and a willingness to go forward, (IN WRITING) and then it’s still not a contract until money changes hands, even a little.

(I actually learned this a few months before my situation happened, by watching an episode of “The Paper Chase”, so my legal advice came via John Houseman and not a J.D., but it was accurate, as far as it went, …and the judge agreed.

This is how I won a small claims case against a client who used my video and then stiffed me on residuals, claiming we had no enforceable contract. I was able to prove with a paper trail that we’d negotiated in good faith to deliver a product, that we did in fact deliver it, and he accepted and used it and sold it, and that he’d made initial payments, but then stopped paying us while still making and selling more copies of our work, without telling us. (The dubbing facility owner was a friend, and told me and my partner how many more copies were being made without the client notifying us).

What rights do you have as the videomaker?

The rule of thumb in the US tends to be: in the absence of a written agreement, your video is considered a Work For Hire. That means, the customer pays you one time and owns everything you made, and can use it any way they like, as long as they like, with no further obligation to pay. The IP is their property. They are generally not also entitled to your raw footage, or the EDLs and templates you created, but at the same time, you can’t re-sell those things to someone else without the original client’s permission, so, kind of a stalemate.

<font face=”inherit”>That you handed over any product before getting any money is something I hope you have learned to never do again. That work product, and their deadline, is your best and often only leverage. If they insist on looking at a copy for approvals before payment, you give them a watermarked version that they can’t just use commercially, to prove you made the product. Typically, I ask for a third down to start a job, a third halfway thru the process at the first rough cut, usually, and the final third upon completion and in exchange for delivery. Only then do they get a clean, non-watermarked copy of the video. That up-front payment gets you the </font>contractual<font face=”inherit”> “consideration” you need to prove to a judge.</font>

<font face=”inherit”>
</font>

<font face=”inherit”>(A digression: Some folks here will take the risk to deliver and wait for payment, because a common tactic of big companies is to say they always take thirty to sixty days to cut a check. They usually have extenuating circumstances or a special relationship with such a client, so </font>they<font face=”inherit”> trust them… or, they are just so desperate for the money, and ongoing </font>business<font face=”inherit”>, they’ll knuckle under, pray, and wait to be paid… Personally, I will not take a job on those terms, but some might. What they are doing is giving out a free loan without charging interest. My answer to: “bill us and wait” is “I am not a bank. If you need thirty days to pay me, start the paperwork now, for x amount, and I’ll come back with the video in a month, expecting the check.”)</font>

<font face=”inherit”>
</font>

<font face=”inherit”>Next, you say the guy you worked for has not paid you, but has forwarded on your work to someone who has ostensibly paid -him-. Do you have proof you did this work at all? Original master files, that kind of thing? This will be important in court to establish </font>original<font face=”inherit”> authorship.</font>

<font face=”inherit”>
</font>

<font face=”inherit”>My non-lawyer opinion is, unless you signed some kind of NDA (and NDA’s are not always enforceable anyway), you can contact anybody on the planet you want to, if they’re willing to take your call. But getting the final, actual end-user to pay you, instead of the middle-man, is going to be an uphill climb. Which starts with you issuing them a DMCA cease and desist order, telling them you own the footage they are using and you have not been paid for it. I’m guessing you don’t have the time and money to actually take this to court, so they could ignore you. But you might get lucky if they think it’s easier to pay you off than create some Public Relations scandal. Of course, after you do this, you will be good as dead to that company, as well as the middleman, and anybody he tells about you.</font>

<font face=”inherit”>
</font>

<font face=”inherit”>Not to pile on, I do feel bad for you, but your case history is basically a roadmap for the very worst way to conduct your business: You didn’t get even a simple deal memo on paper or email, describing the scope of the work, the deliverables, the payment schedule and amount… You handed off files that were not protected against piracy, and you didn’t get any money up front, not even a token down payment. At this point, you basically gave a guy something “on spec”, in exchange for… nothing.</font>

<font face=”inherit”>
</font>

<font face=”inherit”>I’d say go ahead and call the big company guy and explain you are a sub-contractor who made the work product and have not been paid. Maybe you get lucky, but I </font>wouldn’t<font face=”inherit”> bet my car on it. There is nothing more you can do about the middleman, and do not give him another thing, y</font>our relationship is burned. Do not contact him except thru a lawyer.

“…threatening to sue me if I contact their client…”<font face=”inherit”>
</font>

<font face=”inherit”>As to that, anybody can sue anyone for anything, doesn’t matter if they can win or not. They often do it as a bullying tactic, knowing you can’t afford the fight, even if you are in the right.</font>

<font face=”inherit”>The amount of money you expected to get is likely not as much as what you would have to pay in lawyer fees and court costs. But you can talk to a lawyer on the phone, get an initial consult, for between fifty and three-four hundred bucks. Depends on the stakes. And the quality of the lawyer. The last time I needed a lawyer’s professional advice last year, they were a top person in their field, and it cost me 200 bucks for thirty minutes, but considering the stakes, it was worth it.</font>

<font face=”inherit”>Good luck, do let us know what happens. I’ll give you one more piece of free advice for your next negotiation. If the client ever says anything like: “If you can give us a price break on this first one, you can make it up on all the subsequent ones we will send your way, you’ll get all our future business…. Smile, pick up your stuff, and GTFO of that room without saying another word. Because that has always been a scam phrase. Always.</font>