Picture this: An aspiring actor named Chad hires you to take his headshots. You take them, edit them, and a few days later, send them on, but when Chad receives them, he hates them. He can’t point to any specific flaw; he just doesn’t like them. He refuses to pay. Your jaw drops for a moment, then you call your lawyer, who looks at the contract you gave your client to sign, then sighs. He points to a line: “If customer is not fully satisfied, photographer will give a full refund.”
What your lawyer has pointed to is called a satisfaction clause, a provision in a contract that gives one party a subjective choice of whether to perform. Chad contracted with you to perform work and yet, because he did not like the result, your contract does not oblige him to pay you.
Sometimes satisfaction clauses make sense and are necessary. When a contractor, for example, is hired to build a house, it makes sense that the buyer would want to decide whether that house meets his or her standards. A house is typically judged on its workmanship—what the courts would call “operative fitness or mechanical utility” (Wolff v. Smith, 25 N.E. 2d 399, (Ill. App. 1940).
On the other hand, a photograph—or a painting, sculpture or novel—can only be judged on its aesthetics, or what courts would call “fancy, taste, sensibility or judgment.” And when a contract specifies that only one person—namely, the customer—has the right to judge the work only based on “personal taste, sensibility, judgment or convenience” (Silvestri v. Optus Software, Inc. 175 NJ 113, N.J. 2003), then that one party has, in effect, the choice of whether to perform (in other words, pay you). No one else in the entire world can tell Chad whether he likes the pictures, and because your contract requires you to give him pictures that satisfy him, no court could force him to pay.
Satisfaction clauses are dangerous because they are enforceable (although, as a matter of contract, satisfaction clauses are governed by state law, which may vary). As the court in Silvestri v. Optus Software put it, “Satisfaction contracts [involving personal taste] are interpreted on a subjective basis, with satisfaction dependent on the personal, honest evaluation of the party to be satisfied.”
There are, of course, defenses should you find yourself with a Chad of your own, the biggest being the fuzzy line between a satisfaction clause and an illusory promise. An illusory promise is a contract that courts will refuse to enforce, because it only binds one party. The classic example is, “Give me that merchandise, and I’ll give you ten dollars if I feel like it.” If the statement were simply, “Give me this and I’ll pay you ten dollars,” then it would be an enforceable contract. But the addition of “if I feel like it” gives total discretion to one party, and it yanks this statement right out of Contractland and lands it squarely in the sleepy hamlet of Illusory Promise.
It’s not hard to see similarities between an illusory promise and a satisfaction clause for an artistic work, and it’s actually difficult to see a distinction. When Chad has the right to say that he doesn’t like the headshots and only he can determine whether he is in good faith satisfied with the way his headshots look, then he gets to pay if he feels like it. The distinction is as subtle as Chad’s “good faith” in his assertion of dislike; if he says he doesn’t like the shots because he doesn’t want to pay, then he lacks good faith and the court could force him to pay. But who could tell the difference? Only Chad knows the depths of Chad’s mind.
A good way to approach the issue and head off potential Chads at the pass is to include the opposite of a satisfaction clause, which is called a non-satisfaction clause or an aesthetic disclaimer. An aesthetic disclaimer states that the customer is aware of the artist’s personal style and portfolio and waives any right to refuse payment on the basis of dissatisfaction with the end result. This is a powerful and widely used provision among artists and creative professionals, but always beware that it has its limits. If you advertise products of a certain level of quality, competence and craft but deliver products that are amateurish and sloppy, your non-satisfaction clause will not protect you from fraud claims.
Another way to approach customer satisfaction is to include in your contract a revisions schedule rather than a satisfaction clause. A revisions schedule simply details what happens if the customer isn’t happy, and usually states that if the customer has specific complaints, the professional is allowed two to three chances to fix them (it is important to limit how many chances you get, or else the customer can keep you in a neverending loop of revisions). After that, if Chad still isn’t satisfied, he can get a partial refund but must still compensate you for your time.
Aaron M. Arce Stark is a lawyer for artists and entrepreneurs. Learn more about his law firm, Arce Stark Law LLC, at arcestarklaw.com.
This article is for informational purposes only. Contact a lawyer for legal advice.
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