“Before You Sign That Dotted Line” Contracts 101
Often times artists come to us when they are in a bind. Either they have (1) given away more royalty rights than they wanted, (2) they want to fire someone and there is no clear-cut avenue to do so in their agreement or (3) they or another party has refused to satisfy an obligation of their contract. The question we always raise to ourselves is why didn’t the Artist simply get professional help before signing their names to that dotted line. Once a contract is signed you become obligated to perform it as it states! And this could be a costly mistake to perform or to correct. Whether you have already signed a music industry contract or you are contemplating on signing one right now, look over the following contract rules of contract.
As an independent artist you enter into a variety of contracts and agreements for your services over the course of your career. You start off with a Production and Studio Agreement, then on to a Manager’s Contract. If you are a part of a band then there are Band Agreements. Then you pray for the Recording Contract. If you are in high demand, you may need to retain a Booking Agent via Contract. The list goes on and on. Every move that you make, as you build your career in the music industry, is governed by a contract. That is why you need to know some contract rules of conduct.
Rule #1: Never sign a contract or agreement on-the-spot. No matter how good the deal sounds, it can wait a reasonable amount of time for you or an attorney, that specializes in that area of contracts (whether its entertainment, sports, business or real estate), to read over the terms of the deal before agreeing to them.
Rule #2: Never sign a contract or agreement that you do not understand. You are going to be held responsible for the terms of the agreement, so you need to know what is expected of you as well as what is to be expected from the other party. There may be contract language that you will not understand and that’s why it is beneficial for someone to review it who specializes in these types of contracts. It is ok for you to ask questions about your contract, when you fail to know exactly what your contract states, you open the door to breaching that contract.
Rule #3: If you are not completely satisfied with the terms of the contract, then attempt to negotiate certain terms in the contract. When negotiating, never use the other party’s attorney. You need someone who is looking out for your best interest.
Rule #4: If it’s a service contract (a contract that requires someone to do an act) that requires a large payment, never pay the full amount up front. You should be able to make a reasonable down payment. Then you can evaluate and make sure you receive the service promised, paying the balance in full once services have been completed. If the person has been into performing that service for some time (booking agents and managers), get references before you decide that you want this person representing you!
These rules could go on from now to infinity because every contract or agreement and situation is different. The four rules above will help you to get through those on-the-spot situations, buying you the time to consult with your manager and or attorney for guidance. Getting the proper help at the beginning of the contract phase can eliminate litigation and additional costs on the tail-end.
BONUS: While you’re at the studio, before leaving, write down an agreement on a simple sheet of paper that includes who did what (on music, lyrics and musical arrangement) and the percentage that each person contributed to the creation of the song. When it comes to royalties, your agreement (a contract) from that day will leave no confusion on who did what the day the song was created. You never know what you will create in the studio on any given day…it may be the next big HIT!
Written by: Angela D. Green, Esq and Laquita R. Stokes, Esq.
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