Contracts are not just about what it is in the contract, but who you are actually in contract with! Let’s take a gander at “privity of contract” — trust me, this comes up way more than you’d think!
What is Privity of Contract and Why Does it Matter?
The fancy sounding term, Privity of Contract, simply refers to all parties who are subject to the contract. This doctrine is found within common law, meaning, it is defined by case law as opposed to statutory law. The phrase “Privity of Contract” actually comes from old case law in England.
In Tweedle v. Atkinson, 1 B&S 393, 121 ER 762 (1861), we have perhaps the first case in which this important doctrine is really fleshed out.
Example 1: The situation Tweedle arose as follows, (the names are made up):
A groom, we will call him Reginald, is marrying his future bride, we will call her Beatrice. In order to help the newlyweds start their new life, the fathers of the bride and groom enter into a contract with one another. The groom’s father, Beau, pledges to give the bride and groom $100.00, if Chauncey, the bride’s father, gives the couple $200.00. Beau fulfills his side of the bargain and gives the couple $100.00. Alas, Chauncey dies before the wedding and before he fulfilled his side of the contract.
Knowing about the contract, Reggie sues his father-in-law’s estate for the promised $200.00. When the issue came to trial, Reggie lost. Why? Because Reggie was not a party to Beau and Chauncey’s contract, he is a “third party beneficiary”. (The third party beneficiary contract did not exist at common-law at that time. 1861 was a long time ago.) As such, the court in England ruled that he could not sue the estate for $200.00 because no Privity of Contract existed between Reggie and Chauncey.
Now, the court did not address this, but who would have the right to sue Chauncey’s estate? Beau, because he fulfilled his part of the contract.
Example 2: Now, here is an easier real world example that applies to photographers. We will use the same names in this example:
Reggie and Beatrice are excited to hire you as their wedding photographer. As a gift to the bride and groom, Beatrice’s father, Chauncey, wants to pay you for your services. Reggie and Beatrice have already read your contract and signed it. Who is the client?
The answer is the bride and groom. You entered into a contract with the bride and groom to be the photographer at their wedding. Chauncey has nothing to do with this. Sure, he is providing payment in full for your services, but this does not make him your client.
If Chauncey says he wants all the photos to be black and white and the bride says otherwise, listen to the bride. Chauncey cannot sue you; only the bride and groom can. If something goes wrong on the wedding day, the bride and groom alone can sue you under the terms of the contract.
Bottom Line: The bride and groom should always be the ones signing your contract; they are considered your client regardless of who pays. Additionally, the fewer parties there are to a contract, the less legal exposure you have for your photography studio.
Third Party Beneficiary
We mentioned this above, but what does it really mean? A third party beneficiary is a party who is not part of the original contract, but who may have the right to sue under the contract. Court systems in the United States typically recognize a third party beneficiary as:
A person or party who is not an active part of the original contract, but who stands to benefit from the contract and that benefit is the main purpose of the contract.
Example 3: Refer to the party names in Example 2. Let us reverse the situation. You as the photographer have entered into a contract with Chauncey to photograph his daughter Beatrice’s wedding. You go to the wedding and bring along an assistant, Bob, who through a disastrous series of events, burns down your automobile, containing all the wedding photographs.
Can Beatrice and her husband Reggie sue you? Most likely yes. Chauncey made the contract with you to directly benefit Beatrice and Reggie. Therefore, Beatrice and Reggie are a direct third party beneficiary of the contract. Even though Beatrice and Reggie were not a party to the original contract, they still have the right to sue you under it.
Bottom Line: Only enter into a contract with the Bride and Groom. This limits the parties that can sue if some unfortunate occurrence happens during the event or session.
Additional reading: Couple signs. Dad pays. Who is my client?
Contracts Involving Minors
If you do high school senior pictures, this matter should concern you. Most states will not enforce any contract entered into with a minor. There are some exceptions, such as contracts for the necessities of life, e.g. food, water, shelter. However, most courts will rule that senior portraits, despite what the senior may think, are not a necessity for life.
So, how do you as a photographer protect yourself? Make sure that you enter into the contract with a parent or legal guardian of any senior who is under 18 years of age, not the senior.
Who then is your client? The client is the parent or legal guardian, whoever signs the contract. This is true even if the High School Senior is paying you with their own money.
It is also advisable that you have the parent or legal guardian sign a model release form on behalf of their minor child. Also, if the minor child turns 18 at any point during the time in which you are providing your services as a photographer, you should then get the newly minted adult to sign a model release form as well.
Bottom Line: Get the parent or legal guardian to sign the contract. If the minor turns 18 at any point during the time the contract is in effect, get the 18 year old to sign as well.
It goes without saying, knowing who your client is and is not is paramount when entering into a contract. The client is the party to who you owe legal obligations under your contract and who in turn can enforce those obligations against you (i.e. sue if something goes wrong). Your client is always the party who signs the contract, even if someone else pays on their behalf. Remember that a minor cannot be a valid party to a contract, so make sure to have the minor’s parent or legal guardian enter into the agreement instead.
Missed part 1? Read Contracts 101?