For outsourced creators and designers_Basic contract for business outsourcing + individual contract

[For outsourced creators and designers: Basic contract + individual contract]

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MBA Administrative Scrivener Okada Asahi Office Operated by Shopify,
A download sales site for contract templates (formats/templates).
Includes annotations and comments. Ready to use in WORD file format.
You can freely customize it on your side.
Customization in our office is also available with a separate quote.

Fees and costs for creating and customizing contracts
https://keiyaku.info/fee01.html

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*It is compressed in ZIP format. When you unzip it, you will find two files in the folder that appears.
(1) Basic Contract for Outsourced Creators and Designers.docx
(2) Sample Individual Contract for Outsourced Creators and Designers.docx

*This is a "basic contract for outsourcing work" that stipulates the basic and general conditions when outsourcing work to an outsourced creator/designer (Party B) on an ongoing basis.

→This can be applied when the outsourced creator/designer (Party B) is an individual or a corporation.

★The content is designed to cover both "work of a contract nature" and "work of a delegation nature."

→For information on contract work and quasi-agency contracts (performance-based and performance-proportion based), please refer to our firm's website, "Transaction design and contract creation in the design and creative industries."
https://keiyaku.info/design01.html

★This document stipulates how partners should handle the use of generated AI when carrying out this business.
→Article 3 (Handling of outsourcing and use of generating AI)

★The chapters are divided into Chapter 1 (General Provisions), Chapter 2 (Provisions Regarding Quasi-agency Contracts), Chapter 3 (Provisions Regarding Contracts for Work), and Chapter 4 (Special Provisions).

★The provisions of the basic contract are applied to all individual contracts. If there are any differences between the provisions of this contract and those of the individual contract, the provisions of the individual contract shall take precedence over the basic contract.

★The basic contract stipulates the payment method, intellectual property rights such as copyright, and handling of ownership of media, etc.

★We have also included a sample individual contract. Please use it as needed.

★【About the Freelance/Business-to-Business Transactions Fairness Act】
The Act on the Fairness of Transactions Involving Specified Contracted Business Operators (Act No. 25 of 2023) (Act on the Fairness of Transactions between Freelancers and Businesses) came into effect on November 1, 2024.

★Reference (our office website)
Mandatory Laws | Freelance and Business Transaction Fairness Law
https://keiyaku.info/dk03.html
Rules, regulations, and contracts applicable to outsourced designers and creators
http://keiyaku.info/design02.html
Transaction planning and contract creation for the design and creative industries
http://keiyaku.info/design01.html
Contract law for content business and related industries
https://keiyaku.info/contents02.html
IT/system transaction design, contract/terms of use creation
http://keiyaku.info/web02.html
Copyright Transfer Agreement
http://keiyaku.info/copy01.html
Business contract creation for sole proprietors (freelancers)
http://keiyaku.info/ukeoi03.html

★ Clauses included in the "Basic Contract for Outsourced Creators and Designers"
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Chapter 1 General Provisions

Article 1 (Purpose)
Section 1: Describes the purpose of this Agreement.
→It states that "Party A will continuously entrust Party B with the performance of this business, and as Party B accepts this contract, this Agreement will be concluded to determine the terms and conditions that will be commonly applied to individual transactions related to this business."

Section 2: The term "written document" used in this Agreement includes electronic records. (This corresponds to the electronic nature of contracts.)

Article 2 (complete agreement, basic contract nature)
Clause 1: It is confirmed that if there is any agreement between Party A and Party B made prior to this Agreement that is "inconsistent in content" with this Agreement, the content of this Agreement shall take precedence.
→ Even if a contract has previously been concluded between Party A and Party B, this contract will take precedence as a general rule.

Section 2: The provisions of the Basic Agreement shall be applied to all individual transaction agreements (individual agreements). If there are any differences between the provisions of this Agreement and those of the individual agreement, the provisions of the individual agreement shall take precedence over this Agreement.

Article 3: Individual contracts cannot be concluded verbally alone and must be in writing.

Article 3 (Handling of outsourcing and use of generating AI)
Clause 1: This contract stipulates that Party A will entrust Party B with the work (the Work) under the conditions set out in this contract, and Party B will accept the work.
→The scope of this work is general and includes both contract work and delegation.

Clause 2: The specific details of the work in question will be determined in an individual contract each time it is commissioned.

[Handling when using generative AI]

Section 3: The handling of the Generator AI when the Partner uses it in carrying out the Business shall be as set forth below and, in addition, shall be determined in an individual contract as necessary each time a contract is entrusted.
(1) The Partner shall obtain the Company's prior written consent regarding the use of the Generating AI.
(2) When using the Generation AI, the Partner shall not input any prohibited information specified by the Company.
(3) The Partner shall verify the authenticity and accuracy of the information output by the Generating AI to the extent reasonably possible.

Article 4 (Reconsignment)
This is the provision for when a partner subcontracts business to a third party.

★Paragraph 1 states, "Only with the prior consent of our company."

Article 5 (Compensation and Expenses)
Paragraph 1: The Company shall calculate the fees and expenses invoiced by the Partner on the last day of each month and pay the Partner by the earlier of the following due dates:
(1) The payment date for remuneration stipulated in Article 2-2 of the Act on Prevention of Delays in Payment of Subcontract Proceeds, etc. to Subcontractors
(2) The payment date for the remuneration stipulated in Article 4 of the Act on the Fairness of Transactions Relating to Specified Entrusted Business Operators (Act No. 25 of 2023)

→Article 2-2 of the Act on Prevention of Delays in Payment of Subcontract Proceeds, etc. to Subcontractors (Subcontract Act) stipulates that "the parent company shall set the payment due date within as short a period as possible but not exceeding 60 days from the date on which the parent company receives goods, information deliverables, etc. from the subcontractor." This is commonly referred to as the "60-day rule."

Article 4 of the Act on the Improvement of Transactions Involving Specified Contractors (Freelance-to-Business Transaction Improvement Act) also provides details on payment dates. It states that "Specified business operators must set a payment date within 60 days from the date of receipt of the service (or, in the case of outsourcing the provision of services, from the date of receipt of the services) and as short a period as possible. As an exception, in the case of subcontracting (when a Specified Business Operator that has received a subcontract from an original client recontracts all or part of the work to a Specified Contractor), the payment date for the recontracted work must be set within 30 days from the payment date of the original client, and as short a period as possible."

→Note: Please also refer to Section 4 of Article 12 (Disclaimers, etc.) and its annotations.

Paragraph 2: The Company shall pay the fees and expenses set forth in Paragraph 1 by bank transfer to the bank account designated by the Partner, unless otherwise specified in an Individual Agreement.

Clause 3: The amount of compensation and expenses, payment deadlines, payment methods, etc. for individual cases of this work will be determined in individual contracts as necessary.

Section 4: This provision clarifies that even after the contract based on these Terms and Conditions (this Agreement) is terminated, the Company is obligated to complete payment to the Partner for the consideration arising from individual cases of the Business.

Article 6 (Transfer of intellectual property rights related to deliverables, transfer of ownership of media, etc.)
This is the provision for transferring intellectual property related to the deliverables to Party A.
(The content is general purpose.)

★Clause 1: This provision stipulates that the intellectual property rights relating to the deliverables will be transferred to Party A regardless of whether the subcontractor (Party B) has completed the work to the end. (This is in Party A's favor.)

[Definition of intellectual property and intellectual property rights]
Here, the following is a general description:

Intellectual property: As defined in Article 2, Paragraph 1 of the Intellectual Property Basic Act, it refers to "inventions, devices, new plant varieties, designs, copyrighted works, and other products of human creative activity (including discovered or elucidated laws of nature or phenomena that have the potential for industrial applicability), trademarks, trade names, and other indications of goods or services used in business activities, as well as trade secrets and other technical or commercial information useful in business activities."

Intellectual property rights: As defined in Article 2, Paragraph 2 of the Intellectual Property Basic Act, "patent rights, utility model rights, breeder's rights, design rights, copyrights, trademark rights, and other rights established by law or rights related to interests protected by law in relation to intellectual property."

Paragraph 2: The intellectual property rights referred to in Paragraph 1 include, but are not limited to, the rights set forth in the following items (this is a general statement):
(1) Copyright (including the rights under Articles 21 to 28 of the Copyright Act).
(2) Patent rights and the right to obtain a patent.
(3) Utility model rights and the right to obtain utility model registration.
(4) Design rights and the right to obtain design registration.
(5) Trademark rights.
(6) Rights established by law or rights related to legally protected interests regarding "trade secrets" as defined in Article 2, Paragraph 6 of the Unfair Competition Prevention Act.

Clause 3: The subcontractor (Party B) stipulates that after transferring the copyright for the Deliverables to Party A, it will not exercise the moral rights of the author for the Deliverables, except as otherwise specified in an individual contract.

Section 4: In relation to the moral rights of authors, in order for Party A or Party A's client to commercialize the Deliverables in accordance with this Agreement, this section stipulates that "Party A or Party A's client may publish the Deliverables at any time of their choosing," "the name or trade name of the outsourced party (Party B) may or may not be displayed," and "the size, color, etc. of the Deliverables may be altered (within the scope deemed unavoidable)."

Clause 5: This clause stipulates that ownership of the media and documents storing or recording the deliverables and their copies delivered by the subcontractor (B) to Party A will be transferred from the subcontractor (B) to Party A upon payment at the time of Party A's confirmation pursuant to the provisions of Article 25 (Confirmation of Work Execution) or Party A's inspection pursuant to the provisions of Article 30 (Inspection and Acceptance).

★Article 6 also provides an alternative example for cases where ownership of intellectual property related to the deliverables is reserved to the subcontractor (Party B).

Article 7 (Changes to the contents of individual contracts)

Article 8 (Termination of Individual Contracts due to Unsuccessful Negotiations on Changes)
If the Company terminates an Individual Contract with respect to the uncompleted portion of an Individual Business, the Company shall pay the unpaid portion of the commission fee for the Individual Business that has been performed by the Partner up to the time of termination.

Article 9 (Disclosure of business details)
Article 1: The Partner may publish the Deliverables on a website or other media to be considered as the Partner's achievements, etc., only with the prior consent of the Company.

Article 10 (Notification obligation)
It stipulates the partners' obligation to notify us.

Article 11 (Compensation for damages)
The content of the agreement grants only our company the right to claim damages (in our favor).

★These terms and conditions do not include provisions regarding late payment penalties. (Basically, since we are the party that pays the partner the consideration and expenses, it is to our advantage not to include provisions regarding late payment penalties.)

★We also provide examples of provisions in Article 11 for limiting the scope of damages.

→ "Profit from performance" refers to the profit that would have been earned if the contract had been performed as per the contract.

→ "Profit from fulfillment" includes both "lost profits" and "expenses that would not have been incurred if the contract had been fulfilled."

→ "Lost profits"
For example, if a partner does not perform the work entrusted to them, this will be a default on the partner's part. In this case, the profits that we would have earned if the partner had performed the work are called lost profits.

→ "Expenses that would not have occurred if the performance had been carried out"
If we are forced to incur expenses because our partner has not fulfilled the contract, we have incurred expenses that would not have been incurred if the partner had fulfilled the contract.

It also includes an example of Article 11, which clearly states that compensation will be provided for all damages, including the profits from performance.

Article 12 (Disclaimers, etc.)
Disclaimer provisions.
Section 1: Provides for exemption from liability in the event of force majeure.

Section 4: These Terms and Conditions shall be effective to the extent that they do not contradict or conflict with the Act on Prevention of Delay in Payment of Subcontract Proceeds, etc. to Subcontractors (Act No. 120 of 1956) and the Act on Fairness of Transactions Relating to Specified Contracted Business Operators (Act No. 25 of 2023).
→The reason for including this provision is also to prevent the entire Terms and Conditions from being invalidated on the grounds that they violate this law.

Article 13 (Obligation to maintain confidentiality)
It stipulates the confidentiality obligations of partners.
→Only partners are required to maintain confidentiality. (This is advantageous to our company.)

Section 2: Provides that certain information that must be excluded from confidential information is not included in confidential information.

Paragraph 3: "The deliverables for which permission to make them public has been obtained from Party A pursuant to the provisions of Article 9" are excluded from confidential information unless otherwise specified in an individual contract.

Article 14 (Handling of Personal Information)

Article 15 (Prohibited acts)
It specifies prohibited acts for partners.

Article 16 (Prohibition of Direct Transactions, etc.)
The Partner shall not, without the prior consent of the Company, use any information learned in connection with the performance of these Terms and Conditions or any Individual Agreement to enter into any direct transactions with the Company's business partners under a service contract or similar contract, or engage in any sales activities aimed at such direct transactions.

Article 17 (Prohibition of Transfer of Rights and Obligations)
Under the Civil Code, claims are generally transferable except for non-transferable, personal claims. However, in light of the nature of the contract, the transfer of rights or obligations under these Terms and Conditions is prohibited.

Article 18 (Termination of Contract)
This clause stipulates the right to terminate the agreement and also provides for the right to claim damages. Under the Civil Code, the right to terminate arises when the other party fails to fulfill their contractual obligations (statutory right to terminate, Civil Code Articles 541 and 543). In addition to the statutory right to terminate, this clause stipulates that the agreement may be terminated without notice by adding grounds for termination in the agreement.

Article 19 (Measures after contract termination)

Article 20 (Exclusion of anti-social forces)

Article 21 (Transfer of status under these Terms and Conditions)
In the event that the Company transfers its business, the Company may transfer to the transferee its status under these Terms and Conditions, its rights and obligations under these Terms and Conditions, and the Partner's registration details and other personal information.

Article 22 (Severability)
It stipulates that "Even if any provision or part of any provision of these Terms and Conditions is determined to be invalid or unenforceable by law or regulation, such determination will not affect any other provisions, and the remaining parts of these Terms and Conditions will remain valid and enforceable."

Article 23 (Governing Law, Consultations, and Jurisdiction)

Chapter 2: Provisions regarding quasi-agency contracts

Article 24 (Report)
Clause 1: If the delivery of the Deliverables is included in the content of the Partner's Business in the Individual Contract, the Partner shall deliver the Deliverables in accordance with the delivery deadline, delivery location, and other conditions set forth in the Individual Contract.
→In addition to the performance percentage type, this provision also mentions cases where the contract is a quasi-agency contract based on performance completion.

Article 25 (Confirmation of business execution)
In the case of a quasi-agency contract, confirmation of business execution means confirmation that the business has been carried out in accordance with the duty of care of a prudent manager.

Article 26 (Response when a notice of breach of duty of care is received)

Article 27 (Technical support)

Article 28 (Liability for default - quasi-delegation)
Section 2: The period during which partners are liable for default is set at one year. This can be shortened by contract (for example, to six months). If shortened, it is in favor of the trustee (partner).

Chapter 3: Clauses regarding contracts

Article 29 (Delivery of deliverables)
This is a provision regarding the delivery of deliverables in a contract.

Article 30 (Inspection and acceptance)

Article 31 (Response in case of inspection failure)

Article 32 (Technical support)

Article 33 (Liability for non-conformity of contract - Contract)

[Liability for non-conformity with contracts]
This article stipulates the "liability for non-conformity of the contract" regarding the deliverables delivered by the trustee (partner) to the client (our company). If any discrepancy with the contents of the individual contract (non-conformity) is discovered within the specified period, the client (our company) can request the trustee (partner) to correct the non-conformity.
→The revised Civil Code, which came into effect in 2020, will no longer use the term "defect," and will instead use the expression "something that does not conform to the content of the contract."

Paragraph 2: Here, the period for which the partner is liable for non-conformity with the contract is set at one year. (Under the Civil Code, if the type or quality of the subject matter does not conform to the content of the contract, the partner must notify the partner within one year. This period can be shortened by contract (for example, to within six months). If the period is shortened, it is advantageous for the trustee (partner).

Relevant provisions of the Civil Code
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Civil Code Article 566 (Limitation on the Period of Warranty Regarding the Type or Quality of the Subject Matter)
If the seller delivers to the buyer something that does not conform to the content of the contract in terms of kind or quality, and the buyer does not notify the seller to that effect within one year from the time when the buyer became aware of the non-conformity, the buyer cannot claim completion of performance, a reduction of the purchase price, or damages, or cancel the contract on the grounds of non-conformity, unless the seller knew of the non-conformity at the time of delivery or was unaware of it due to gross negligence.
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★The following special clauses have been added. (Please delete them if not required.)

Chapter 4 Special Agreement

Article 34 (Performing business within facilities managed and operated by our company)

Article 35 (Use of PCs, etc. loaned by our company)

Article 36 (Use of external services and devices)

Article 37 (Safety and Health)
*This is a provision to comply with the "Act on the Improvement of Freelance and Business Transactions." (Please delete if unnecessary.)

Paragraph 1: Given that partners will be working individually, our company will take into consideration the safety of partners' lives, bodies, etc. in accordance with Article 5 of the Labor Contract Act. As "safety of life, bodies, etc." in Article 5 of the Labor Contract Act includes mental and physical health, this example of regulations also requires consideration for mental and physical health in accordance with this.

Furthermore, the Freelance Act requires companies to establish a system to respond to consultations from freelancers regarding various types of harassment (power harassment, sexual harassment, maternity harassment) committed against freelance partners, and to take the necessary measures to prevent and improve harassment (Article 14 of the Act). Therefore, after the Act comes into effect, it is possible that paragraph 1 will read, "...necessary measures shall be taken to prevent accidents and harassment."

Clause 2: This provision is based on the idea that, in order to establish a system of responsibility for on-site safety and health, it is desirable to identify the person in charge of managing staff safety and health and notify them in writing, etc. In this example provision, the safety and health manager is to be notified in writing, etc., but if the safety and health manager is identified at the contract stage, it is also possible to clearly state the name, etc.

Article 38 (Harassment Policy)
*This is a provision to comply with the "Act on the Improvement of Freelance and Business Transactions." (Please delete if unnecessary.)

*The following ordering businesses are obligated to "establish a system to prevent harassment" for freelancers.
●Businesses that outsource work to freelancers ●Employ employees ●Outsourcing work for a certain period or longer

Reference (our firm website): About mandatory laws | Freelance and Business Transaction Fairness Act
https://keiyaku.info/dk03.html

Specific anti-harassment measures include the following:
■ Formulating a policy regarding harassment ■ Establishing a consultation desk and person in charge and clearly indicating their contact details ■ Holding a seminar on harassment prevention before filming begins ■ Communicating the definition and examples of harassment in writing ■ Communicating the response flow in advance in writing when harassment occurs

There are also industry associations that provide and publish guidelines for anti-harassment measures.
We may also consider establishing our own guidelines for each film production site, referring to various publicly available guidelines and examples.

The Ministry of Health, Labour and Welfare provides specific examples of guidelines and information to raise awareness of workplace harassment prevention measures at the link below.

【reference】
"Example of a notice document regarding measures against sexual harassment"
From the Ministry of Health, Labor and Welfare and Prefectural Labor Bureau, "(For employers) Let's take measures against sexual harassment in the workplace!" (accessed January 5, 2024)
https://www.mhlw.go.jp/content/11900000/000333510.pdf

Ministry of Health, Labor and Welfare, Yamagata Labor Bureau | Employment Environment and Equality Office Harassment Countermeasures and Various Regulations Download (Download sample documents for harassment countermeasures against freelancers)
https://jsite.mhlw.go.jp/yamagata-roudoukyoku/roudoukyoku/gyoumu_naiyou/koyoukankyoukintousitu/kiteirei.html

Article 39 (Consideration for childcare and nursing care)
*This is a provision to comply with the "Act on the Improvement of Freelance and Business Transactions." (Please delete if unnecessary.)

Under the Freelance Workers Act, if the contracted work is to continue for a certain period of time or longer, the client is required to take appropriate measures to ensure that the freelancer is able to continue working while also balancing their work with childcare or nursing care responsibilities (Article 13 of the same Act).

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★ Clauses included in the "Sample Individual Contract for Outsourcing Creators and Designers"
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This is a sample individual contract regarding production for outsourced creators and designers (partners).
→This is a contract to entrust "work of a contract nature."
→The specific content of individual production-related work, compensation, and delivery date are specified, and everything else is governed by the basic terms and conditions.

This is a sample of an individual contract. Please use it if necessary.

Regarding individual contracts, Article 2, Paragraph 3 of the Basic Terms and Conditions stipulates the following: (Note that, according to Article 1, Paragraph 5 of the Basic Terms and Conditions, "written" includes electromagnetic records.)
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3. The individual contract under Paragraph 2 of this Article shall not be concluded orally alone, but shall be concluded in writing.
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Article 1 (Purpose, business outsourcing)
Section 1: This section stipulates that the Company will commission the Partner to produce illustrations, and the Partner will accept the commission.

Section 2: This section specifies the content of the illustration production work that we will entrust to our partners.
If necessary, we will attach an attachment containing sample illustrations. (Please delete this section if it is not necessary.)

Clause 5: The contract form of this individual contract shall be a "contract for work."

*Alternative example of Section 5: An alternative example of Section 5 is also provided in the case of an individual contract that is a "quasi-agency contract for the completion of results" in which the delivery of deliverables is included in the content of the work in question.

Article 2 (Compensation)
*The payment deadline is set at "within 60 days from the date of delivery" in accordance with Article 2-2 of the Act on Prevention of Delay in Payment of Subcontract Fees, etc. to Subcontractors (Subcontracting Act).

→Article 2-2 of the Act on Prevention of Delays in Payment of Subcontract Proceeds, etc. to Subcontractors (Subcontract Act) stipulates that "the parent company shall set the payment due date within as short a period as possible but not exceeding 60 days from the date on which the parent company receives goods, information deliverables, etc. from the subcontractor." This is commonly referred to as the "60-day rule."

★When creating a work and transferring its copyright, the "compensation" includes the following:
- Compensation for creative work/Compensation for the transfer of copyright → If the compensation includes compensation for the transfer of copyright, it may be preferable to clearly state the breakdown, such as "how much is the work fee (contract fee)" and "how much is the compensation for the transfer of copyright."
(If the contract is in writing, the amount of stamp duty that may be charged may change.)

Article 3 (Publication of Works)

Article 4 (Handling of matters not stipulated in the individual contract)

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* Includes annotations and comments. WORD file format, so you can customize it however you like.
★We also accept customization on our side (separate quote required).

Contract Creation e-Course by MBA Administrative Scrivener Okada Asahi Office
https://keiyaku.info