Concert • Record • Artist • Promotion • Since 1986

MUSIC INDUSTRY CONTRACTS

Contracts are the life-blood of the entertainment industry. This article addresses many of the dangers and misunderstandings about contracts within the music business. First, always get something in writing. Second, make sure you understand the contract you are presenting and the contract you are signing. These may seem obvious, but as discussed below, this advice is seldom followed.

Although you may come to agreement orally as to the general terms, you should always reduce the understanding to writing. There are many reasons why you should get it in writing. First, a writing serves to memorialize the understanding between the parties. As time goes by, the two parties might have different memories as to what constitutes their agreement. By getting it in writing, there are no disputes over the terms of the contract.

Second, written contracts are much more likely to be enforced by a court in the event of disagreement. Oral agreements are not always unenforceable, but a judge is much more likely to enforce the terms of a written agreement. Finally, there are some contracts which must be in writing. If it is not in writing, there is no contract. For all of these reasons, it is a good idea to get the contract in writing.

A contract need not be elaborate. It need not be drawn up by a lawyer. It does not have to be notarized. There are a few items which the contract must contain. First, you should write down what each part is going to do for the other. If it is a contract between a band and a film producer, the contract would start: Producer agrees to provide five hours of studio time and Band agrees to record one song. Next, it must contain what the parties are giving to each other. For those aspiring to be lawyers, this is called "consideration". A statement such as: Producer shall pay Band $1000 for all rights in the sound recording, should be sufficient. Finally, the document should be signed by both parties. As you can see, it does not take much to create a written contract.

The above example is very simplistic, but at least it is something in writing. There is no substitute for a complete contract between parties. However, I recognize that budget and time constraints may prevent some people from having a complete contract. There are many "form" books out there which contain "model" contracts in the music industry. Some are better than others. There is, however, a danger in using such forms. Many people don't know how the forms work. They find a form which says, "Management Contract" or "Record Contract", they photocopy it, and have an artist sign the agreement. It is crucial that you understand how the contract works before you use it. These are generic agreements and may not operate the way you expect. Before using any of these form agreements, learn how music contracts operate in general. Read about record contracts and management contracts then compare your form with what you have read. I have never encountered a form which did not need some modification and customization.

There are many pitfalls to using a form without knowing how the contract works. It always amazes me how many managers give a band a management contract to sign, then the band gives it to me to review, and when I negotiate with the manager, he/she doesn't even know how the contract operates. In addition, in representing the band, I have taken advantage of this lack of knowledge of the manager and included clauses that are very helpful to the band. The same holds true with independent record labels. If I am negotiating with someone who owns a label, I learn very quickly if the person knows how their contract operates. If they don't, I am able to include clauses that no major label would ever allow. This emphasizes the point, that if you are going to use a form, be sure to understand how it works.

As you can gather from my discussion above, each deal is different and each contract should be modified to fit the particular needs of the parties.