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Homework Check-In &

Introductions

Photo by David Flam via Flickr Creative Commons

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Negotiation

Content contributed by: The Arts & Business Council of Greater Boston

Negotiating & Contracts

Artists will learn:• Introduce you to the pros

and cons of different conflict styles

• Broaden your approaches to negotiation

• Introduce a “Principle”based negotiation

What will we learn?

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Line Exercise• Make two lines of people facing

each other. • Point to your person so you

know who whom to negotiate. • You get $1000 if you can

convince the other person to come to your side

• One minute• Go!

What does it mean to negotiate?

The dictionary: Merriam-Webster: to confer with another

so as to arrive at the settlement of some matter

Real life:

Do you look forward to it?

Does it have to be a formal event?

Have you done it today?

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Stereotypical Negotiation Success

• You won more than the other party•You got more money than they did

• You gave up less than the other party•You didn't get taken advantage of

• You convinced the other party that you are right

•This becomes the goal, but may not meet your needs

Avoiding

AvoidingPro:

Alleviates tension between parties

Buying time

Issues of low importance

Substance

Relationship

Example: Neighbor fails to return your tools.

high

highlow

Con:Doesn't’t strengthen relationship

No change

Give up control over decisions

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Accommodating

Accommodating

Relationship

Substance

Pro:

Stimulating good will (lots of friends)

Maintaining the peace

Example: You are making dinner plans for this weekend.

low

high

high

Con:

Resentment (being taken advantage of)

Rules not enforced

Competing

Pro:Unpopular decisions

Swift action / safety issues

Friendly competition

Con:Damage relationship

Little feedback

Parties lose interest not invested

Relationship

Substance Competing

Example: You are playing sports.

high

highlow

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CompromisingPro:Encouraging equal power and commitment

Reaching short-term solutions

Con:Unwanted concessions

Relationship’s potential isn’t realized

Relationship

Substance

CompromisingExample: You are shopping at an antiques bazaar.

high

highlow

Collaborating

Relationship

Substance

Pro:Encouraging commitment

Reaching creative, integrated solutions

Con:Necessary time commitment

Takes skill

Collaborating

Example: You are negotiating a licensing agreement.

low

high

high

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Competing

Thomas-Kilman Conflict Mode Instrument

Avoiding Accommodating

Collaborating

Compromising

Relationship

Substance

low

high

high

Break

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Interests vs. Positions

Apartment Rental Example

„I want an apartment on the 12th floor.‰

Interests vs. Positions

• Interests are the needs, goals and fears that prompt us to negotiate– Ego – how does it play a role in defining our

interests

• A substantive negotiation is made when both parties’ interests are satisfied

• Taking a position isnÊt the only way to meet your negotiation interests– Examples from your life of „Positions‰

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Needs-based NegotiationNegotiation Success

Redefined – New Goals:

• Both parties’ interests or needs are met

• Improves, strengthens, does not harm parties’relationship

• Resulting agreement is better than the Best Alternative to a Negotiated Agreement (BATNA)

Ingredients of an Effective Negotiation

Recipe:

• Your interests

• The other party’s interests

• Objective criteria - Example: Buying a car - Kelly Blue Book

• Your alternatives, if you were to walk away

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OptionsOn the table negotiationsCreative ways to meet needs

PreparationExample: Painting your house: preparation takes twice as long

CommunicationActively listen and confirm understanding during negotiationUsing email, phone, in-person

Ingredients of an Effective Negotiation

„Effective Negotiation‰Exercise

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Workshop your findings from the „Negotiation Prep‰ exercise.

• Your interests • Their Interests • Objective Criteria • Alternatives• Options • Preparation• Communication

Ingredients of an Effective Negotiation

Lunch!

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List all the parties that are included in a Public Art Project:

Ingredients of an Effective Negotiation:

Public Art

Possible Interests for Public Artists

• Preserve integrity

• Good publicity/future work

• Get credit

• No hassle

• No liability

• Proper maintenance of the work

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Possible Interests for Public Art Administrators/Funders

• Avoid problems

• No liability

• Done on time & on budget

• Less headaches

• Proper maintenance

• Use for promotional purposes

• Avoid damage to organization

Create a Map of Your Position

• Alternatives to negotiation – BATNA

• Make a list of important justifications or arguments in your favor

• Set a target outcome – Target Point (Best case scenario)

• Set a bottom line – Walk Away Point

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• Research in advance

• Active listening

• Maximize options

Tools for Better Communication

Lesson Five: Introduction to Contracts, Risk &

Budgets

Content contributed by: The Arts & Business Council of Great Boston

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Introduction to Contracts, Risk & Budgets

We will be learning About:

• Common vocabulary used in contracts

• Considerations for understanding contracts for public art

• How to identify potential personal and professional risk

• To introduce artists to intermediate budget creation and oversight

What will we learn?

What Is A Contract? • A contract is:

– an agreement between two or more parties to do something in exchange for something else.

• You have a contract if there is⁄

– An Offer

– An Acceptance

– Consideration

• It does not have to be formal

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Why Have a Contract? To protect yourself

– Make sure you get paid; make sure others fulfill their promises to you.

To protect the other party

– Make sure you fulfill your promises to others.

To demonstrate professionalism and reliability

– Show you are serious about your work.

To prevent unhappy surprises

– Prevent miscommunications and misunderstandings.

Written or Oral? A written contract is

preferable

Oral Contracts:

– An oral contract is binding, but hard to prove if a dispute arises.

Written Contracts:

– A written contract permanently captures the agreement of the parties.

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Informal Contracts • Even if you don’t sign a formal contract,

memorialize in writing your discussions and email them to the other party as a record of your conversation.

Informal Contracts (cont.)

At the very least, a court will view a confirmatory email as helpful evidence reflecting the mindset of the parties at the time of the agreement. A court might even accept a confirmatory email as a valid contract.

A confirmatory email is much stronger than mere oral statements or later recollections of the negotiation and terms of the agreement.

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“Can I⁄.” People often ask us:

“Can I do this in a contract?”

The answer is as long as the contract is between two adults of sound mind and is not for an illegal purpose, you can put it in a contract.

The real question to ask:

“Should I⁄?” or

“Is it standard industry practice to⁄?”

The answer is “it depends⁄$250 please.”

Representation Rights If you are in a group

or collaborative, all members should be clear about who can bind the group.

Have this agreement in writing prior to entering any contracts with third parties.

If possible, confer with all members of a group before signing a contract.

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Statute of Frauds

• Requires “essential terms” to be in writing.

• “Essential terms” are, at a minimum:– Identity of all parties involved

– Subject matter of contract

– Terms and conditions of agreement

– Consideration given and received

– Signature of all parties

Cancelling a Contract

When either party wants to cancel:

– How much notice is necessary?

– When is a party financially liable?

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Considerations for public art contracts

• Budget – can you complete the project with the allotted funds? 

• Insurance – read the application prior to submitting 

• Permits – Include in your budget and be aware of what is required

• Money is often paid in installments

VLA Guideline for When to Get A Lawyer

1. If the contract commits you to a real time commitment or more than $500.

2. If the contract in any way licenses or assigns the copyright in your work.

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Best PracticesHere are our “Best Tips” for a Successful Contract

Best PracticesREMEMBER⁄

Don’t lead with the contract • A contract or an agreement is the outcome of

meaningful discussions or a negotiation process

Don’t put a your contract on the shelf.• Refer back to it and take care to follow the guidelines,

deadlines, etc. in the contract.

Do the Math• Make sure the numerical figures in your contract add up

• Don’t forget to ask about how a contract may limit you moral rights

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Best Practices

REMEMBER⁄

Don’t be afraid to ask

• Make sure you understand the language of any contract that obligates you, and what you are required to do.

Be wary of:

• Being asked to assign way your rights

• Sublicense agreements

Contract should list a contact person

• Every contract, especially those with an agency or corporate client should list a contact person as an interface between the client and artist.

Break

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Professional Risk

• Financial Risk – debt, taxes, payroll,

• Bodily Risk to others – volunteers, artists, contractors, employees.

• Professional Liability – professional advice or service

• Marketing/PR – how is your brand perceived by others?

• Risk exposure – a term used to define the probability of risk

Personal Risk

• Burn-out• Injury• Government and police targeting• Job loss• Harm to body• What else?

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Budget Exercise

Image by Mr Thinktank via Flickr

Budget „Did you Consider‰

• Taxes?

• Insurance?

• Permits?

• Paying yourself?

• What else?

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Resources for budgeting

• Mint.com

• Art & Numbers by Elaine Grogan Luttrull

• C4’s Financial Literacy 101 Class

Final Thoughts• The relationship is more

important than the formal contract.

• Make sure you understand the language of any contract that obligates you, and what you are required to do.

• Ambiguous contracts are interpreted against the drafter.

• Courts do not like to look outside the “four corners” of a contract to ascertain the

parties’ mindsets.

Soooo…

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Homework