Say you want to buy a DVD at Best Buy. You walk in, choose your DVD, walk to the checkout / cashier, pay for it, show the person at the door your reciept, and walk out. Perhaps you've seen the movie before. Perhaps you haven't. Either way you have a product that you may or may not be satisfied with. If you don't like it, keep your reciept and return it.
When a contractor for the games industry provides a service whether it is producing assets or providing consulting, this widely accepted method of purchasing something doesn't apply at all. You can provide a service and get paid in a few days, a few weeks, a few months, or possibly never.
A contract is usually drawn up outlining what is expected of the delivery and the service or assets, and those things are evaluated, typically in milestones. Whether it is an entire game or a single texture, there is no solid process for timely payment once something is accepted.
Funny, isn't it? Funny, scary, and ultimately wrong. When engaging a contractor, just as having a credit card or cash in your pocket, you have the money ready before something actually gets delivered. Once it is in your hands, money is delivered. If you don't like it, get your money back. Plain and simple.
The reason consumers accept this practice is because stores have security systems that go off if you leave without paying. Even in a McDonald's, before they give you the food you have to pay. You could I suppose jump behind the counter, hastily grab a Big Mac and jump out the window or run out the door, but that is called theft. McDonald's then will probably call the police and have you arrested.
The same thing doesn't happen with a big developer or publisher and a contractor, or even a small developer with a big contractor. Assets are delivered, and the contractor waits. And sometimes waits a lot. Where is the security? Where is the legislation that calls that theft?
Having asked this question of colleagues typically even if timely payment is built into a contract, the only way to enforce it is to take the client to court. A costly process that people don't even start thinking about because they can't afford it in the first place. There is in fact legislation in place for timely payment:
There is a federal prompt payment act but it only applies to contractors paid by federal agencies or departments.
Having read earlier today about the unionization of the game industry, I also find it interesting that we are seeing a repeat of a similar trend in the film industry, yet even unions that affect the game industry do not have the power to enforce timely payment.
I write this mainly as a topic of discussion with the hope that something positive can come out of that discussion. Respond with your tales of woe, enlightenment, or indifference!