Understanding the law makes for better and more robust creative businesses. As soon as your creative project or service enters the wider world, and enters the wider world as part of commerce, law comes into play in a giant way. Many creative businesses with otherwise amazing offerings fail because of poor legal planning. Certain legal myths have taken hold and continue to cause problems for creative businesses. Let’s bust a few:

  • “We didn’t have a written contract, so my client doesn’t have to pay me.” Lots of variations on this one, but all of them rely on the assumption that a written agreement is a necessary component of getting paid for providing creative services. Don’t get me wrong – written agreements are crucial tools for success, but just because you don’t have one, doesn’t mean you can’t get paid. Various legal theories provide avenues for you to get the money that you are owed. Maybe there is evidence that you and your client intended to do business – perhaps an exchange of emails, or simply the fact that you produced a custom work for them would tend to indicate that money was meant to change hands and end up in your pocket.
  • “If I enforce my legal rights, I am being overly litigious.” Unfortunately, a meme has arisen in American culture that we are awash in frivolous lawsuits. I question whether this is true, but the result tends to be that many creative businesses hesitate to enforce their rights because they don’t want to feel like they are part of the problem. Others are afraid of being petty and others just don’t like conflict. Since creative businesses are built on intellectual property rights, proper enforcement is crucial to success in any creative endeavor. However, many large companies actually appear to bank on creators not asserting their rights, and for the most part, it’s not an unfounded assumption.
  • “It’s fair use.” Our copyright system is not perfect, nor will it ever be. For many Internet commentators, the solution to that imperfection appears to be an expansive view of fair use that has turned the actual “fair use doctrine” (as defined in 17 USC §107) into a sort of catch-all for minor violations of copyright law. The fair use doctrine is rather limited in scope, and serves as a somewhat unreliable defense to infringement. Therefore, it’s often a problem to rely upon it when using other people’s work as part of your own. Copyright owners can and do monitor the Internet for infringements of their works (and not just the big companies), and as a result creative businesses can be on the hook for sizable settlements if they slip up. That’s money that can be used to expand your business that will be going into someone else’s pocket – this can take the wind out of the sails of even the most promising endeavor.

There are plenty more legal myths like this one, but the overall point is that all of them have an impact on your creative business’ bottom line. And if your bottom line suffers, your business can quickly go from being a business to a costly hobby.

Want unlimited and ongoing access to attorneys to help your creative business succeed? We can help you understand the legal considerations and help you build a foundation on issues involving copyrights, trademarks, business operations and contracts to set up your business for success – consider checking out our Creators’ Legal Program for ongoing support on this and other issues.

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