A recording contract is a type of legal document called a contract. A contract is a legally binding agreement between two or more parties. Contracts can be in written or oral form but are, in most cases, written and signed by all parties. There are many types of contracts including, but not limited to:
- Sales agreements;
- Real estate purchase contracts;
- Employment contracts;
- Confidentiality agreements;
- Finder’s agreements; and/or
- Insurance contracts.
The writing of the terms and details of a contract is known as drafting a contract. This is done to provide a detailed outline of the legal obligations of all parties, so the parties are aware of their duties towards one another. A contract can be drafted by any individual but an attorney can help draft a reliable and secure contract, especially in complex cases.
A recording contract is a specific type of contract involving music. It usually outlines the terms for recording artists. These types of contracts include topics such as:
- Song recording;
- Royalties; and/or
- Any other issue related to music production.
These types of recording contracts can also be known as a:
- Music contract;
- Music artist contract;
- Recording artist contract;
- Music recording contract;
- Artist recording contract;
- Record label contract; and/or
- Music label contract.
In many cases, the parties to a recording contract include the recording artist, usually a singer, musician, or a band, and a production company, usually a recording label. Recording contracts are very important for the success of the recording artist and the music production company.
In most cases, the recording label will have legal representation when entering into a contract with a recording artist. This makes it extremely important for the recording artist to also be represented by an entertainment law attorney who can review the contract and make sure it is fair and profitable for the recording artist.
In many cases, especially with new artists, the label may attempt to exercise a large amount of control over the songs produced. This can include the type of music recorded, the way the music sounds, the song lyrics, and/or album cover art. As an artist becomes more successful, they may be able to renegotiate contracts to terms more favorable to them.
What’s Contained in a Recording Contract?
A recording contract will be unique to each artist because each has different needs, capabilities, experience, and background. There are, however, fundamental elements contained in most recording contracts. These include certain information and agreements such as:
- An exclusivity agreement;
- Worldwide rights; and/or
- Payments for royalties.
An exclusivity agreement is contained in nearly all record contracts. This is similar to a non-compete clause. This is a clause that states the recording artist will not be permitted to record for any other production company for the duration of the contract. There can be exceptions such as a collaborative project with another artist from a different label. These projects, however, may require their own separate agreements.
The production company will exercise rights over the artist’s work worldwide. The rights to the artist’s services and work does not apply only in the country the contract was signed. This gives the record label rights no matter where the artist records or performs.
Payments for music royalties are distributed because the creator of a work is entitled to a percentage of gross or net profit and/or a fixed amount per sale or use of their work. Common examples of these payments occur when an artist is paid each time their song plays on the radio and/or when their song is used in a film.
Recording contracts should also include the following information:
- The name and contact information of the recording artist;
- The name and contact information of the record company;
- Agreement terms regarding appearances and live performances;
- Provisions regarding how the recording contract may be terminated;
- Terms regarding whether the artist’s work may be licensed to other parties; and/or
- Requirements for resolving legal disputes or breaches that arise out of the contract, such as requirements for mediation or arbitration of disputes.
How Long Does a Recording Contract Last?
The terms and duration of a recording contract will vary by situation and record label. A common practice may be to sign a contract for an initial period of 12 months for the making of a first album. This may be followed by option periods, often in 12 month increments, that allows the record label to extend the contract should they wish to do so. The artist will usually be required to produce a certain number of tracks, determined by a reasonable industry standard.
What are Important Factors to Consider when Negotiating a Record Contract?
There are many components to consider and negotiate when entering into a record contract. These may include, but are not limited to:
- What wages the artist can expect;
- Compensation for rehearsals, recording sessions, and/or extended tours;
- A per diem daily allowance for food;
- The option of a buy out if a concert promoter does not fulfill their contractual obligation to provide food and drinks backstage;
- The maintenance and protection of musical equipment when traveling, including travel cases;
- Sponsorships from musical equipment companies;
- The maintenance and protection of recording equipment in the recording studio;
- Covering costs for travel and lodging, as well as the type of accommodations that will be used;
- Reimbursement for the costs of special clothing; and/or
- A retainer to maintain income during times of temporary unemployment, such as a break in a tour schedule.
Who Owns the Artist’s Music?
An artist’s music, or song, can be referred to as a master, or the underlying rights to a song. A master recording is the original version of a song. The owner of the master has control over financial gains from the recordings. In many cases, record contracts are structured so the label, not the artist, owns the masters of all songs created during the contract duration. In return, an artist often receives an advance and a royalty percentage from any profits made from the songs.
What are Some Common Recording Contract Violations?
Any type of contract or agreement can be breached or violated, including recording contracts. These breaches or violations can create legal issues and may require litigation to resolve. These t[yes of remedies can include breaches and violations of a producer and artist contract, a music distribution contract, and a record label and artist contract.
Common recording contraction violations may include:
- An artist not receiving payment for songs record or album work done;
- Violation of an exclusivity agreement, or recording with a different record company;
- Copyright infringement, or using the artist’s work outside the agreement terms;
- Failing to pay the artist royalties to which they are entitled;
- Failing to record agreed-upon work; and/or
- Any other violation of the terms of the contract.
Are There Any Legal Remedies for a Recording Contract Violation?
There are remedies for the violation of a music recording agreement. A lawsuit may be filed as a result of a breach of violation of the contract. Entertainment law may provide remedies for the aggrieved party, or non-breaching party. In some cases, a monetary damages award may be available to the non-breaching party.
Should the recording artist breach the contract, damages may be available to the recording label. These may include lost profits, loss of business opportunities, and/or other losses that occurred as a result of the breach. In order to recover, the damages must be real, not imaginary, and must include a quantifiable dollar amount.
Should the recording company breach the contract, damages may be available to the recording artist. These may include monetary damages for unpaid work done, royalty losses, loss of business opportunities, damages as a result of copyright infringement, and any other loss that occurred as a result of the breach. In these cases, damages must be quantifiable in order to be approved by the court.
There may also be instances where other remedies apply. In cases where there is a copyright issue or violation of intellectual property, the violating party may be ordered to cease use of the protected work.
Should I Hire a Lawyer if I Have Recording Contract Issue?
Yes, it is extremely important to have the help of a contract lawyer if you have a recording contract issue. As noted above, an important first step is to have legal representation prior to signing the contract. Should an issue arise after the contract is signed, a lawyer will be able to help.
Having the proper contract terms in place can be the difference between success and failure for a recording artist or a recording label. Recording labels use attorneys to draft their contracts, so their rights are automatically reviewed and protected.
A contract lawyer can assist you if there is a violation or breach of your recording contract, whether you are the breaching or non-breaching party. A lawyer will assist in reviewing your case, determining the best steps to take, and representing you during court proceedings, if necessary.