Music Business/Law Tips - "Breaking A Record Contract" (Final Part)

The downside to the contract dissolution methods discussed over the last few weeks is that when an artist enters into a legal battle with a record company, the resulting action can take years to settle and can often temporarily derail the artist's career because it takes the artist out of the public eye for a period of time. Knowing this, labels frequently use stalling tactics in such contract disputes because they understand that since an artist's career usually only lasts for a few years, time is on the label's side, and an artist involved in a protracted legal battle might get frustrated and discontinue the dispute.

The practitioner representing a new artist at the initial contract negotiation stage should consider building artist protections - such as monetary enhancements or an "out" clause - into the agreement which can be triggered by the artist having a hit record, or the label not fulfilling its end of the agreement, whichever is applicable. In the final analysis, although it might seem easy, "Breaking Up Is Hard To Do."

Ben McLane Esq
benmclane.com

Music Business/Law Tips - "Breaking a Record Contract" (Part 9)

A final tactic would be for an artist to simply walk away from a contract and leave it up to the label to stop the artist from recording elsewhere. This technique would normally only occur when a contract is extremely unfair, and when there are several arguable grounds for termination. In particular, the artists Boston and Donna Summer were successful in using this technique to break away from their respective recording contracts.

In the Boston case, although arguably the contract period between Epic and the band had elapsed by time, Boston went ahead and signed a new recording contract with MCA instead of waiting for a resolution of the term conclusion and other disputed issues. Epic thereafter moved for an injunction, but it was denied and MCA released Boston's next album. Similarly, in the Summer matter, although it appeared that her Casablanca contract had terminated because of a key man clause which went into effect when the president left the label, Summer signed a new recording contract with Geffen instead of waiting for of a resolution of the key man and other disputed issues. Casablanca thereafter moved for an injunction, but it was denied, and Geffen released the next Summer album. No doubt many artists have utilized this scorched earth approach based upon the practical consideration that, after a cost-benefit analysis, the label will opt not to seek legal relief.

[final part next time]

Ben McLane Esq
benmclane.com

Music Bjsiness/Law Tips - "Breaking A Record Contract" (Part 8)

A conflict of interest approach might hasten the termination of a recording agreement. At times in the music industry, because of the small number of specialized practitioners, instances occur when there might be a conflict of interest whereby one attorney will represent both the label and the artist in a contract negotiation. In such a case, an artist could postulate that he/she got a raw deal because the attorney was in bed with the label and hence the contract should be rescinded. This argument would be based on Professional Conduct Rule 3-310 which regulates avoiding the representation of adverse interests. In essence, this Rule states that an attorney shall not, without the "informed written consent of each client", represent more than one client in a manner in which the "interests of the clients potentially conflict." However, unless the contract is one of adhesion (i.e., take it or leave it/extremely one sided), it is doubtful that a court would invalidate a contract on this ground alone.

[part 9 next time]

Ben McLane Esq
benmclane.com