No matter how artistic and transformative your work, your work commitments as a creative professional will require you to encounter contracts, agreements and other similar paper work. Contracts can be tricky and it’s always important to read and understand the terms you’re about to sign up for. To make things a little simpler, here’s an easy list of significant clauses or terms and what they actually mean:
With any contract, it’s always good to clarify one of the most fundamental questions concerning your professional engagement – how long does this agreement last and how can you get out of it?
Determining the duration of the contract’s operation is important because it affects whether the agreement and the work it talks about is going to benefit or burden you. As a rule of thumb, it’s generally a good idea to think about a time frame that is not too short or long. Instead of readily signing up for a period of say ten years, think about reducing the time period and then giving yourself the opportunity to renew the contract – that way if you didn’t have a great time working with the label, production or publishing house you have the option to stop and think, rather than remain bound to an entire decade of misery.
The other interesting thing about determining the time frame is that some contracts try to define it in terms of years while others try to fix it in terms of deliverables – say three albums or two feature-length films. Think about what works best for you before agreeing to what is proposed.
If you’re going to enter an agreement, you need to be aware of how to get out of it or how the other party is going to try and get out of it. A lot of agreements like to make long and elaborate termination clauses. The reasons for termination change and depend on the work involved – for instance, if you’re endorsing a product, then being seen with a competing brand is good enough grounds for termination according to some. Always spend time on reading and understanding the grounds for termination – if things go sour, these clauses are what might help you out of some possible financial and professional trouble.
3. Royalty clauses:
Royalty clauses are always viewed with a certain amount of stress and rightly so, as they are often considered the traditional income bringers in the music and film industries. Royalty payments, the schedules and the nitty-gritties are details that need serious scrutiny – scrutiny by someone who has experience with the rules of the industry. This is the kind of clause that ought to be discussed with someone in possession of specialised knowledge, whether it’s a colleague who is experienced in the industry or a lawyer/manager who is acquainted with handling royalties.
Depending on the medium, royalties can be divided into several categories that may include artist royalties, mechanical royalties (payments that accrue to you on the basis of your CD sales and downloads), and foreign royalties. These clauses need to be discussed with your manager, lawyer or business partner.
4. Key member clause:
This is a clause that you might see popping up in management contracts and recording agreements. Very simply, this clause implies that you, the artist, are willing to work with a management agency or are willing to enter into negotiations so long as a certain key individual (often the manager of your choice) is present and involved. Sometimes, key member clauses can also refer to a band member or a member of a production team who is elected by all to take a supervisory and representative role on behalf of the band or team in the event of discussions or negotiations.
Recoupment essentially implies reimbursements. The record label or studio you’re working with, might specify a clause with reference to recoupments. This usually means that until you cross a particular threshold, all the income you make shall be used to reimburse certain investment costs incurred by the studio or record label in the process of producing your work. This is an important clause to understand since recoupments, advances and royalties are what make up the money-component of your agreements.
6. Transferring rights and waiving moral rights:
When signing an agreement, always make sure you’ve read the clauses that mention transferring, assigning or selling the rights in your work. It is possible to negotiate an agreement where you continue to own the copyright over your work, but agree to rent or license particular rights to another party. It is important to always know how to distinguish the language between these two kinds of arrangements – if a clause says transfer, assign or sell then always think hard about whether this is what you really want to do with respect to your work. Moral rights are a slightly different breed of rights that attempt to protect your non-commercial interests as the creator of the work. An example of a moral right could be the right to integrity where you as the creator of the work have the ability to prevent a distortion or modification of the work, if it goes against the spirit in which you created it. For instance, sampling a song that was written as a spiritual song, in say, a rap song about sex and violence. Again, always think twice before you choose to waive these rights.
These are just a few of the contract clauses you need to be aware of when looking through your agreement. My advice is to always read your agreement thoroughly before signing it. If there’s a term, clause or provision that you do not understand, don’t hesitate to get the specialised legal help you need either from your manager, your lawyer or a trusted colleague. However, always remember that contracts are negotiable and that means that it’s up to you whether you want to make them scary or not.