If you run a successful model agency and act on behalf of your models to enter into agreements with other businesses, it is crucial to understand the legal requirements for your business. You need to ensure your relationship with your models and the businesses you work with are clearly outlined and understood. The appointment of an agent results in three important legal relationships between:
- the model and you as the agent;
- you and the third parties that you work with on behalf of the model; and
- the model and the third parties with whom you work with on behalf of the model
This article will set out the key legal considerations and documents you will need when running your modelling agency.
Agency Relationship Laws
When you are a modelling agent, you have an agency relationship over the models your manage. This means that you can enter into contracts that on their behalf. In New South Wales, there is specific legislation surrounding agency relationships.
NSW Legislation
The legislation in NSW seeks to apply certain standards to minimise unfair practices and exploitation within agency relationships. These laws include that you must:
- provide an ‘Information for Performers’ fact sheet to the model before they enter into a contract with you;
- set up a trust account for the model and not mix it with the agency’s funds;
- pay models immediately, or pay it into their trust account within 14 days after you receive the money;
- provide the model with financial statements;
- not charge a fee to the model for joining or auditioning to enter into a contract with your agency; and
- not charge the model over the maximum fees and percentages you can charge different situations. This is unless you sign an agreement with the model that describes the additional services you provide, and the extra charges they will cost.
Agent’s Obligations
You have legal obligations to your models that impose a high level of trust and responsibility over you. This is called a ‘fiduciary relationship’, and it places certain obligations on you, regardless of any contractual obligations that you may also have. The main obligations include duties:
- to fulfil agency – meaning you must carry out instructions and not go beyond or act contrary to those instructions;
- to act in person – meaning you must perform the agency in person and not delegate it to someone else unless this is specifically made clear in the agency agreement;
- of care, skill and diligence;
- to promote the principal’s interest – you are not permitted to further your own interests and must avoid conflicts of interest;
- of confidentiality – you must keep information the model provides confidential;
- not to profit secretly from the agency – for example, you cannot make your own undisclosed commission; and
- of proper management – you must keep proper accounts of all transactions.
Agency Agreement
The Agency Agreement will outline the obligations and responsibilities between you and the models. You should consider including the following terms in the agreement:
- term – how long the agreement will last and any options to renew it;
- scope of agency – whether you will be exclusive (where you are the only agent that model can have) or non-exclusive (where they can have multiple agents);
- territory – where can you act for the model, either in a particular state or all over Australia;
- payment – how your payment plan will work and how much commission you will take; and
- obligations of the model – you may want to ensure models do not directly work for brands, but that you are the link in their legal relationship.
Agreement With Third Party Businesses
As a modelling agency, you will need to have agreements with the third party businesses that you work with on the model’s behalf.
Within these contracts, you will need to consider the following important clauses:
The Scope of the Arrangement
Here, you need to consider multiple factors surrounding the scope of the model’s work with this third party, including whether:
- you will be providing models for a particular event, or if they also need to participate in promotional activities over a season; and
- the models will work in an ongoing arrangement or a once-off event.
Payment Options
You must outline whether your client will pay you:
- monthly;
- in instalments; or
- at the start or end of the event.
You should ensure payment is clearly set out in your agreement, so there is no dispute on fees or payments.
Intellectual Property, Confidentiality and Privacy
You will need to make sure it is clear that your intellectual property (IP) and confidential information is protected. You don’t want your client to disclose any confidential information to unauthorised parties.
Website Documents
If you have a website, you should also have a privacy policy that addresses personal information you collect on your website from third parties or models. It outlines how you can:
- use and disclose personal information; and
- store the information.
You should also have a terms of use document prepared that set out how visitors to your website can use it. It includes provisions about:
- prohibited conduct;
- copyright; and
- intellectual property.
It specifies that you own the photos, videos and articles about your models on your website. An IP clause prevents people from copying and using the content without your permission.
Business Structure
You will want to consider which business structure would best suit your model agency.
Key Takeaways
If you are planning on running a modelling agency, you must understand your responsibilities as an agent. Further, you must ensure:
- that you are following NSW legislative requirements if they apply to you;
- you have a clear agency agreement in place with your models; and
- you have an agreement in place with the third-party business when you act on the model’s behalf.
If you have any questions about opening a modelling agency, contact LegalVision’s business lawyers on 1300 544 755 or fill out the form on this page.
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