Contracts 101 For Entertainers and Others

Contracts 101 For Entertainers and Others

There are few words, such as “my lawyer” or “contractual obligation” that substantially increase heart rates, blood pressure and anxiety levels. This is particularly true for those engaged in the entertainment business, which is replete with war stories from bands that signed their away rights, for pennies, to numerous future albums, to unknowingly transferring copyrights, royalties and much more.

In today’s music era, these rights and derivative rights for such things as DVD’s, sync rights for film and TV, phone and computer apps, trademarks, and software games, bring in much more coin than the tune or a performance.

In fact, it’s the musician’s lifeblood, which is why a serious musician should learn about contracts with the same veraciousness as a cancer patient learns about alternative treatments.

That’s not to say you should be spouting out legalize like Julian Coryell spits out guitar notes, both take years of intensive study to learn and master. But just as easily as you can learn basic guitar chords, you can understand the basics of contracts. The basics will help with a booking at the local water hole, to the management contract to the ITunes or Spotify agreements.

Today’s lesson is to simply familiarize ones self with contractual verbiage just as the newbie guitar player learns about strings, frets, tuning and pics.

Contract Defined:

An agreement between two or more competent parties in which an offer is made and accepted, and each party benefits. The agreement can be formal, informal, written, oral or just plain understood. Some contracts are required to be in writing in order to be enforced. (2) An agreement between two or more parties which creates obligations to do or not do the specific things that are the subject of that agreement. Examples of a contract are a lease, a promissory note, or a rental agreement.

For a contract to be formed, there must be a meeting of the minds between or among the contracting parties. That’s a big reason why minors and the incapacitated get to void their contractual obligations.

Additionally, there needs to be an offer and acceptance between and among the parties. To a certain extent, that’s easy to spot in a signed agreement, but many times the parties do not state with specificity all the services expected of each of the parties. The nebulousness or generalness of a contract increases the chances for a dispute over performance of services.

That’s why oral contracts can be so dangerous – especially, when there is a great deal of money or other risk at stake. First, there’s the interpretation of whether a contract was formed – was there a clear offer and clear acceptance (“I will sell you my Les Paul for $5oo.” And “Yes,” I will buy it”). Or was it more nebulous, such as a wink of the eye, or a high-five without an oral response, or something similar. Was it 500 pesos or dollars? There are so many opportunities for misunderstanding.

Therefore, it’s always best, if possible, to write, with particularity, what each party is expected to do, and the timeline in which they are expected to finish their contractual duties. In some cases, there should be a penalty provision if they don’t complete their duties by a certain date, such as a building contractor, and the project lingers on forever.

For these reasons and many others, there is the Statutory of Frauds, which we stole from the Brits in the early 1600s. The aim was to minimize the potential for fraudulent activity, such as the person who claims you gave them your house, or the lost family member who claims he was the bastard child of Sammy Walton and seeks their share of the will, and a host of other areas ripe for fraud. Some states may require a written contract for goods valued at more than $500, to be married, for the transfer of rights in any real property, or to be listed as a guarantor for another’s debt.

Additionally, The subject matter of the contract must be for something new – not for something that was already provided, or for services already expected (police and fire assistance, etc.)

Lastly, the quality of the work or services provided can be based upon industry standards to determine whether someone performed appropriately. Then there are the common contracts for services, such as drycleaners, car washers and restaurants, whose services are not stated but expected based on industry standards.

Entertainment contracts can be simple or complex, from an artist representative agreement to a record deal, but unless you learn the contract basics, it all may end on a bad note.

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