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Work made for hire agreement: How-to guide

Businesses spend considerable time and money developing new ideas and products. They often turn to employees to create new and innovative materials. After investing their time and money into their creation, those companies will want to ensure that they own the goods that are produced during his or her employment. A work-made-for-hire agreement can provide such assurance.

A well-drafted work-for-hire agreement:

  • Outlines each party’s rights and responsibilities and allows the parties to negotiate and determine what services and materials to be provided
  • Ensures both parties understand that ownership rights remain with the company.

The attached template can be a good starting point for your arrangement. To make it comprehensive, you and the author must discuss and agree on the terms of your agreement and settle questions about work parameters, payment, and responsibilities.

Once both parties expressly agree on the terms and have signed the form, each party can focus on its area of expertise: the company on the development of its business and the author on the tasks assigned.

Important points to consider for a work-made-for-hire agreement

Free work made for hire agreement template by LegalZoom. Create and download agreements for free!

Explanation of work-made-for-hire

Under federal copyright law, a work is protected by copyright from the time it is created in a “fixed form.”

Another way of saying this is that when a work is written down or recorded, it immediately becomes the property of its author, who is the sole person who can claim copyright. An exception to this rule is for specific categories of works called “works made for hire.” If something is a work made for hire, the employer or the commissioner of the item is considered its author and not the actual creator.

Situations when work-made-for-hire is valid

Generally speaking, work created by employees for employers is considered work made for hire. However, there is no exact standard for determining when a work is made for hire or even who will be regarded as an employee of a company. Getting a signed written agreement specifying that something is a work made for hire is a good idea to protect your company.

In some cases, you can enter a work-made-for-hire agreement with non-employees of your company, like independent contractors.

However, the work you commission must fall into one of nine limited categories:

  1. Contribution to a collective work
  2. Part of a motion picture or other audiovisual work
  3. Translation
  4. Supplementary work
  5. Compilation
  6. Instructional text
  7. Test
  8. Answer material for a test
  9. Atlas.

If the work produced does not fall into such works, the copyright owner becomes the company and not the author. 

Benefits of work-made-for-hire

Suppose you agree with an individual specifying that a work is made for hire. In that case, many states will infer a generalized employment relationship and require that you deduct taxes, pay workers’ compensation insurance, and provide other employer-employee benefits. This is true even if all other factors would generally make the relationship one between an independent contractor and the company. Review your state’s rules to know the consequences of entering into a work-made-for-hire agreement.

Reviews and revisions required

Allow each party to spend time reviewing the agreement. This will reduce the likelihood, or the efficacy, of a claim that a party did not understand any terms or how those might affect the document as a whole.

When both parties review the documents from different points of view, it ensures that all the points are included. Also, this avoids any assumptions that certain terms are agreed upon by the parties, even if not explicitly stated in the agreement.

Signatures from all parties to close the deal

Create two copies of the agreement, one for you and one for the other party, and get the written instrument signed. Depending on the nature of its terms, you may decide to have your agreement witnessed or notarized. This will limit later challenges to the validity of a party’s signature.

If your agreement is complicated, contact an attorney to help create a document that meets your requirements.

Key components in a work-made-for-hire agreement

Before sitting down to customize your agreement, decide your goals. The contract can contain any agreed-on terms but should, at a minimum, include a description of the author’s tasks, the amount to be paid, the terms of payment, deadlines for completion, and the end products expected (e.g., slides, photographs, CDs, articles, etc.). Clarify the terms and conditions of your agreement as a written instrument.

The following instructions will help you understand the terms of your agreement.

Introduction

In this first section, add the date when the agreement will become effective. Mention the parties involved, like the hiring party’s name (“company”) and the party providing the materials (“author.”) Instead of “author,” you can use terms like photographer, filmmaker, etc., that suit your arrangement better.

Recitals

This clause, also known as the “whereas” clause, defines the agreement in-depth and offers crucial background information about the parties. In this agreement, the recitals include a simple statement of your intent to enter into a work-made-for-hire arrangement. In the first paragraph of the recitals, describe in detail the work prepared by the author.

Materials; work for hire

This section describes the company’s appointment and the author’s acceptance of the appointment to create the materials. This section also emphasizes that any materials or valid work created will be considered property of the company (i.e., a “work made for hire”).

Delivery

This section sets forth the terms and conditions governing the author’s submission of the materials to the company.

  • Delivery date: Enter the date by which all materials must be delivered in final form. If you want to specify a particular employee (or department) at the company to whom the materials should be delivered, provide such details. 
  • Form of delivery: Allows you to specify the form that the delivery of the materials should take. This will depend on the type of work that is being undertaken.
  • Supplemental information: Sometimes, just providing the materials will not allow the company to use them. In those cases, the recipient will need supplemental information for its protection. This subsection addresses certain types of additional information that may be required. For example, if the commissioned materials are photographs or other images, the author will be responsible for obtaining model releases. The company would need such releases before an image could be used for trade or advertising, even if the pictures are of company employees.
  • Verification of materials: Here, the author must verify the truth of any facts in their work and keep records of that verification. 
  • Failure to deliver: This section explains the consequences if the author doesn’t finish the materials or turn them over on time, for example:
  • The company can choose to end the agreement without additional obligations, including any obligation to pay the author. The company can also decline to assign additional projects to the author.
  • The company can keep its rights to the materials and pay the author part of the original fee, reduced by the amount that the company thinks is reasonable given the defect or delay in delivery.
  • The hiring party can set a new date for delivery of the materials and decide to provide no extra fees for any additional work.

Ownership of the materials and derivative works

  • Work for hire: This section again emphasizes that the materials created under the agreement are works made for hire, and the company will, therefore, be considered the author of those materials. If, for any reason, the work created is said not to be a work made for hire, the author agrees to a copyright assignment to the company, thereby giving the ownership that was supposed to be given by creating a work made for hire.
  • Sole proprietor: This section indicates that the commissioning party is the company, and the copyright to the materials is with them.
  • Right to change: This section allows the company to edit or not edit, use, or not use the original work at its discretion. In other words, although the company has the right to use the author’s materials for their own purposes, they don’t have to do so. It is obtaining the exclusive rights and the ability to change it without the obligation of having to.
  • Moral rights: Moral rights” are certain intellectual property rights maintained in countries other than the United States. In some cases, these rights cannot be assigned. To the extent that the author has any such rights, they waive their right to enforce them against the company in those countries.
  • Authorial credit: This section permits the company to use the author’s name to attribute actual authorship of the materials if they choose to do so.

Payments

This section discusses what the author will receive in exchange for the materials they provide. Either the company will make a one-time full payment to the author when the materials are complete and received. The company can also construct a different payment schedule according to their arrangement.

No publicity

This clause permits the company to control the materials used and how the author can provide information about the agreement and other trade secrets to any third party.

Infringement

  • Notification of infringement: This section mentions that if the author discovers that a third party is using the materials without permission or finds out that the materials infringe on a third party’s work, they will notify the company immediately.
  • Cooperation: If a copyright infringement case is brought in the Supreme Court on behalf of or against the materials, this section promises that both parties will participate.

Author’s representations and warranties

This section details the author’s promises under the agreement. Essentially, they agree to enter the arrangement based on the conditions in this section. The author also agrees in this section that the materials they have prepared aren’t illegal by being defamatory, libelous, or violating another person’s copyright. If there are other promises you wish the author to make as a condition to entering into the agreement, add those in this section as well.

Third parties; taxes

This section mentions that the author can’t bind the company into agreements with third parties. This section also states that the author will pay taxes on any income earned due to the agreement. Review your state’s laws for additional information about the tax consequences of entering into this agreement.

Termination

This section explains how specific actions or events, including written notice or material breach, will cause the agreement to end before the services are completed or the end of the term, if any. Write the amount of notice a party must give of its intent to terminate or to notify the other of a breach.

Indemnification

This clause allocates responsibilities between the parties if problems arise in the future and protects the company from the financial consequences of the author’s negligent or intentional conduct.

Assignment

This section explains that the company may assign its obligations and interests without the author’s permission. However, the author can’t assign their interests under the agreement.

Governing law

This section allows the parties to choose the state laws used to interpret the document.

Severability

This section protects the terms of the agreement as a whole, even if one part is later invalidated. For example, if a state law is passed prohibiting choice-of-law clauses, it will not undo the entire agreement. Instead, only the section dealing with the choice of law would be invalidated, leaving the remainder of the agreement enforceable.

Counterparts; electronic signatures

This section clarifies that even if the parties sign the termination in different locations, physically or electronically, the separate pieces will be considered part of the same document. In a modern world where signing parties are often not in the same city—much less the same room—this provision ensures that business can be transacted efficiently without sacrificing the agreement’s validity.

Frequently asked questions

What’s a work-made-for-hire agreement?

Are you commissioning photos or hiring an author to ghostwrite your memoir? A work-made-for-hire agreement sorts out what the creative is expected to deliver, when, and how you'll need to credit and compensate them.

What details are required for a work-made-for-hire contract?

Here’s the information you'll need to have ready to complete your work-made-for-hire agreement:

  • Who's creating the work: Have their name and contact information ready
  • Who's paying to use the work: Have their name and contact information ready. This is probably you or the company you represent
  • How the work will be delivered: Know the format and delivery method
  • How payment and credit will work: Know how much the creator will be paid and if and how they will be credited
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