A contract is a general agreement between two or more parties that is legally enforceable. Specifically, a recording contract is a type of contract regarding music, and often pertains to the terms for recording artists. They are used to work out terms such as payment, recording of songs, royalties, and other important issues related to artists in the music industry.
In most cases, the parties to a recording contract are the recording artist (usually a singer or musician, or a band), and a music production company (such as a recording label). Recording contracts are extremely important for the success of both the artist and the company.
Most record companies will have have legal representation when forming a recording contract with an artist. Thus, for the artist, it’s extremely important that they also be represented by an entertainment lawyer, who can help review the contract and ensure that it’s fair and profitable for the artist.
Recording contracts will be different from artist to artist, as each artist will have different needs, capabilities, experience, and backgrounds. However, most recording contracts will contain certain information and agreements. These may include:
- Exclusivity Agreement: In nearly all record contracts, you will be signing an exclusivity agreement, similar to a non-compete clause. This means that you will generally not be able to record for anybody else for however long your contract lasts. There may be exceptions in certain cases (for instance, if you are to do a collaborative project with another artist from another label; these may require an entirely separate agreement);
- Worldwide Rights: The record company will have general rights to your services and works throughout the world, not just the country you signed in; and
- Royalty Payments: Music royalties are a percentage of gross or net profit or a fixed amount per sale or use to which a creator of a work is entitled. A common example of this is where the artist gets some payment each time their work is played on the radio or when it is used in film, etc.
Music recording contracts should also include other important pieces of information, including:
- Names and contact information of the artist and the record company;
- Details involving production and recording processes;
- Agreements covering appearances and live performances;
- Provisions regarding termination of the recording contract;
- Whether the work may be licensed out to other parties; and
- Preferences for resolving legal disputes over contract breaches (for instance, whether the parties may file a lawsuit, or if they must submit to arbitration or mediation).
As with any type of contract or agreement, music recording contracts can be breached or violated. These can create legal difficulties and may require legal action to resolve them. Some common recording contract violations include:
- Non-payment for songs recorded or album work
- Recording with another record company (i.e., violation of the exclusivity agreement);
- Issues with copyright infringement (i.e., using the musical works outside of what the artist agreed to);
- Failure to pay the artist royalties when they are entitled to it;
- Failure to record the agreed-upon work; and
- Various other types of contract violations.
These types of violations can be serious and may require legal action to settle the dispute.
In many instances, a lawsuit may be filed in connection with a recording contract violation. Music laws may provide various remedies for the non-breaching party. In most cases, a monetary damages award may be paid from the breaching party to the non-breaching party.
If the music artist broke the contract, the damages might cover losses for the recording company including lost profits, loss of business opportunities, and other damages. The damages must be real, not imaginary, and must be quantifiable into a dollar amount.
If the recording company broke the contract, the damages may cover losses experienced by the recording artist. This can include damages for unpaid payment amounts, royalty losses, loss of business opportunities, damages caused by copyright infringement, and other losses. Again, the damages must be quantifiable in order for the court to approve them.
In some cases, other remedies might apply. For instance, if there is a copyright issue or other intellectual property violations, the court may order the violating party to stop using the protected works.
Having the right recording contract terms in place can make all the difference for an artist or recording company. You may need to hire a contract lawyer in your area if you need any type of legal assistance in connection with a music recording contract.
Most music labels have contracts created by their attorneys, so it is important to have your own representative to review the terms and ensure that they’re fair. In the event of any type of legal conflict or dispute, your attorney can represent you in a court of law.