Music Law: Contract Basics

Deborah Gonzalez

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Entertainment Lawyer

Contributor Level 11

Posted over 3 years ago. 2 helpful votes

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1

What is a contract?

An agreement between two or more parties in which an offer is made and accepted and each party benefits. The parties must be competent when they enter this agreement -- such as being above a certain age; and the agreement must be binding and enforceable in a court of law or in arbitration -- so for example, it cannot be for an illegal activity. A contract can be written or oral, and as formal or as simple as the parties want. Some contracts have been known to have been written on bar napkins and upheld as valid -- though it is not recommended.

2

What issues are covered in a contract?

The contract's purpose is to lay out in a clear and concise manner what each party has agreed to. Terms, or specific issues in a contract, can cover a variety of topics. For music contracts the most popular clauses focus on: Exclusivity of the artists for a recording or publishing label; Recording and release requirements; Artists' Royalties; Recording Costs and Funds; Publishing Rights; Tour Support; Video/Digital/Technology Rights; Copyright Ownership and Use of Masters; Compensation and timing of payments; Performance Parameters; Incidentals/Riders; and others.

3

What kinds of contracts are used in the music industry?

The music industry makes use of an array of contracts depending on the parties and the specific issue involved. Some examples include: Management Contracts, such as Agent/Manager or Producer/Artist Agreements; Copyright Assignments and Ownership, such as a "Split Sheet;"Membership Agreements to Performance Rights Organizations; Labor Agreements; Performance/Concert/Touring Contracts; Songwriter Contracts & Royalties; Licensing Contracts for Recordings for TV/Film, Video Games, etc.; Foreign Distribution Agreements; and more.

4

What is the value of an attorney to draft or review your contact(s)?

Why spend money on an attorney when standard contract templates are available in books, cd's and online for little or no-cost? An attorney has been specially trained to draft and negotiate contracts that protect the interests of their clients. Consider the money you spend as an investment in your long-term music and entertainment career. But heed this word of caution -- make sure you select an entertainment lawyer who has experience in the industry. A bankruptcy lawyer may know how to read a contract, but he/she will not know the entertainment language, customs and practices, little details that can have significant financial impact. Make sure to review credentials. Speak with other musicians who have used the attorney's services. Meet the attorney in person to get a feel about them, their expertise, and their style. This is especially important if they are going to represent you and/or your band as your career takes off.

5

Last Clause

Make sure you have a contract -- it protects your most important creative asset -- your talent. Read the entire contract -- read the fine print. Then read it again. If you do not understand anything do not sign. Have the contract reviewed by a professional and ask them the questions. Make sure you understand your responsibilities, as well as the benefits due you, before signing. Remember once you've signed you've lost the greatest leverage you had to negotiate for a better deal.

Additional Resources

Definition of Contract: http://www.lectlaw.com/def/c123.htm MusicBiz Academy: Performance Contracts: http://www.musicbizacademy.com/articles/perfcontracts.htm

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