Anatomy of Entertainment Contracts (Pt. 2)
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Breach & Remedies:
A breach clause can be a separate clause or interspersed within other clauses. Make sure you make note of any language anywhere in the contract that discusses that a failure to do something, or doing something, results in negative consequences.
A remedies clause explains whether or not there is an opportunity to cure any particular breach before a party can take action against the other. It should explain how the offended party communicates to the other that a breach has occurred. This is typically in writing. If there is a means of rectifying the situation within a short amount of time, that would be explained within the remedies section, as well as any penalty attached, and how it affects the rest of the contract.
If the offended party seeks legal recourse against the other for the breach, this section would state what remedies the party could take (injunction, litigation and who pays attorneys’ fees , arbitration and who pays attorneys’ fees, etc.). The remedies information relates to the jurisdiction of the contract, which is discussed below.
Termination:
A termination clause explains when and how the contract can be terminated between the parties. It typically also explains how the parties can reconcile any open-ended issues (bookkeeping, unpaid services, unpaid salary, etc.) upon termination. If it doesn’t, ask.
Assignment:
Assignments arise when one or both parties transfer their interests and/or rights and responsibilities in the contract to a third party or a successor. If the contract permits assignments, that needs to be spelled out. If not, that also needs to be spelled out. What notice the party has to give the other about a successor taking over their rights and responsibilities, and how that is communicated, should be explained in detail. Whether the non-assigning party has a period of time to terminate the contract with the successor party should also be clearly stated. If there is no reference to assignments in the contract do not assume it is permitted.
Jurisdiction:
Jurisdiction refers to what U.S. state or federal law governs the contract. If it’s an international contract, which country’s laws govern a contract have to be stated. If there is an earlier reference to remedies in the contract, any legal filings or actions regarding the remedies need to occur within the jurisdiction that governs the contract.
These topics are not all always required for every entertainment contract, and this is not an all-inclusive list of what needs to be in a particular contract. But for contracts involving performance or transfer of rights or investments in projects, it should be a red flag if these clauses are not in the contract. Entertainment is a business. You wouldn’t deposit money into a bank without knowing the terms and having a sense after reviewing the terms that your money will be safe. Do not contract your talents and time, or invest in projects, without clearly knowing and understanding how you will benefit, that you will benefit in the way you expect to benefit, and that your risk will not exceed your benefit. Seek legal assistance so you can discern which contracts are in your best interest, and you are fully educated on the terms of the contract. It is much easier, and cheaper, to walk away from a bad contract offer than to get out of a bad contract you are fully obligated to perform.
Anatomy of Entertainment Contracts (Pt. 1)
Photograph by Amina Atar https://unsplash.com/@minaslens.
Most entertainment contracts have the same clauses but are detailed to fit the particular circumstances of the agreement. This post focuses on which clauses in a contract that you as a talent signing an entertainment contract should pay particular attention to. Not all clauses discussed in this post, and in the follow up post, are necessary for every entertainment contract. However for entertainment contracts for performance of a talent, or creative product/project, in exchange for pay, these clauses should be in the agreement, and should be a red flag if they are not. This is Part 1 of 2 posts.
Introductory Clause :
The introductory clause should of course state who the parties are that agreeing. This should include the names, stage name/pen name, addresses, title of the project/event/product/service, date of effectiveness, and time period of the contract (from when to when).
Consideration :
The consideration clause spells out what you will be doing or giving to the other party, in exchange for what the other party will be doing or giving you. This section can include milestones, payment distribution, percentage per item sold or downloaded, etc. All agreements for compensation, transfer of interest in a property, etc., no matter how small, need to be included in the contract, otherwise it can be easily disputed as to whether they were ever part of the contract. If you are entitled to any additional payment distribution after the completion of your obligation, this may be included in this clause or in a separate clause.
Representation & Warranties :
The representation and warranties clause states that the parties are actually able to perform the skills, obligations and/or responsibilities they have represented themselves as having for purposes of the agreement, and for a successful completion of the contract. Sometimes this clause is included with an indemnification clause.
Indemnification :
The indemnification clause explains what exposure a party has under the agreement to liability for a claim that arises between the parties, or from a 3rd party action. Often one party is indemnifying the other party from certain types of 3rd party claims that arise during the course of the agreement.
*Check out my next blog post for Part 2 of Anatomy of Entertainment Contracts. As with all posts on this blog, this is general information and not legal advice. Consult with an entertainment attorney to review your specific situation.
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