Producing and editing a masterwork of recorded music is obviously a specialized art form. But so is the entertainment lawyer’s act of drafting clauses, contracts, and contractual language generally. How might the art of the entertainment attorney’s legal drafting a clause or contract affect the musician, composer, songwriter, producer or other artist as a practical matter? Many artists think they will be “home free”, just as soon as they are furnished a draft proposed record contract to sign from the label’s entertainment attorney, red rock entertainment testimonials and then toss the proposed contract over to their own entertainment lawyer for what they hope will be a rubber-stamp review on all clauses. They are wrong. And those of you who have ever received a label’s “first form” proposed contract are chuckling, right about now.
Just because a U.S. record label forwards an artist its “standard form” proposed contract, does not mean that one should sign the draft contract blindly, or ask one’s entertainment lawyer to rubber-stamp the proposed agreement before signing it blindly. A number of label forms still used today are quite hackneyed, and have been adopted as full text or individual clauses in whole or in part from contract form-books or the contract “boilerplate” of other or prior labels. From the entertainment attorney’s perspective, a number of label recording clauses and contracts actually read as if they were written in haste – just like Nigel Tufnel scrawled an 18-inch Stonehenge monument on a napkin in Rob Reiner’s “This Is Spinal Tap”. And if you are a musician, motion picture fan, or other entertainment lawyer, I bet you know what happened to Tap as a result of that scrawl.
It stands to reason that an artist and his or her entertainment lawyer should carefully review all draft clauses, contracts, and other forms forwarded to the artist for signature, prior to ever signing on to them. Through negotiation, through the entertainment attorney, the artist may be able to interpose more precise and even-handed language in the contract ultimately signed, where appropriate. Inequities and unfair clauses aren’t the only things that need to be removed by one’s entertainment lawyer from a first draft proposed contract. Ambiguities must also be removed, before the contract can be signed as one.
For the artist or the artist’s entertainment attorney to leave an ambiguity or inequitable clause in a signed contract, would be merely to leave a potential bad problem for a later day – particularly in the context of a signed recording contract which could tie up an artist’s exclusive services for many years. And remember, as an entertainment lawyer with any longitudinal data on this item will tell you, the artistic “life-span” of most artists is quite short – meaning that an artist could tie up his or her whole career with one bad contract, one bad signing, or even just one bad clause. Usually these bad contract signings occur before the artist seeks the advice and counsel of an entertainment attorney.
One seemingly-inexhaustible type of ambiguity that arises in clauses in entertainment contracts, is in the specific context of what I and other entertainment lawyers refer to as a contract “performance clause”. A non-specific commitment in a contract to perform, usually turns out to be unenforceable. Consider the following:
Contract Clause #1: “Label shall use best efforts to market and publicize the Album in the Territory”.
Contract Clause #2: “The Album, as
delivered to Label by Artist, shall be produced and edited using only first-class facilities and equipment for sound recording and all other activities relating to the Album”.
One shouldn’t use either clause in a contract. One shouldn’t agree to either clause as written. One should negotiate contractual edits to these clauses through one’s entertainment lawyer, prior to signature. Both clauses set forth proposed contractual performance obligations which are, at best, ambiguous. Why? Well, with regard to Contract Clause #1, reasonable minds, including those of the entertainment attorneys on each side of the transaction, can differ as to what “best efforts” really means, what the clause really means if different, or what the two parties to the contract intended “best efforts” to mean at the time (if anything). Reasonable minds, including those of the entertainment lawyers on each side of the negotiation, can also differ as to what constitutes a “first-class” facility as it is “described” in Contract Clause #2. If these contractual clauses were ever scrutinized by judge or jury under the hot lights of a U.S. litigation, the clauses might well be stricken as void for vagueness and unenforceable, and judicially read right out of the corresponding contract itself. In the view of this particular New York entertainment attorney, yes, the clauses really are that bad.
Consider Contract Clause #1, the “best efforts” clause, from the entertainment lawyer’s perspective. How would the artist really go about enforcing that contractual clause as against a U.S. label, as a practical matter? The answer is, the artist probably wouldn’t, at end of day. If there ever were a contract dispute between the artist and label over money or the marketing expenditure, for example, this “best efforts” clause would turn into the artist’s veritable Achilles Heel in the contract, and the artist’s entertainment attorney might not be able to help the artist out of it as a practical matter:
Artist: “You breached the ‘best efforts’ clause in the contract!”
Label: “No! I tried! I tried! I really did!”
You get the idea.
Why should an artist leave a label with that kind of contractual “escape-hatch” in a clause? The entertainment lawyer’s answer is, “no reason at all”. There is absolutely no reason for the artist to put his or her career at risk by agreeing to a vague or lukewarm contractual marketing commitment clause, if the marketing of the Album is
perceived to be an essential part of the deal by and for the artist. It often is. It would be the artist’s career at stake. If the marketing spend throughout the contract’s Term diminishes over time, so too could the artist’s public recognition and career as a result. And the equities should be on the artist’s side, in a contractual negotiation conducted between entertainment attorneys over this item.
Assuming that the label is willing to commit to a contractual marketing spend clause at all, then, the artist-side entertainment lawyer argues, the artist should be entitled to know in advance how his or her career would be protected by the label’s expenditure of marketing dollars. Indeed, asks the entertainment attorney, “Why else is the artist signing this deal other than an advance, marketing spend, and tour support?”. The questions may be phrased a bit differently nowadays, in the current age of the contract now known as the “360 deal”. The clauses may evolve, or devolve, but the equitable arguments remain principally the same.
The point is, it is not just performers that should be held to performance clauses in contracts. Companies can be asked by entertainment lawyers to subscribe to performance clauses in contracts, too. In the context of a performance clause – such as a record label’s contractual obligation to market and publicize an album – it is incumbent upon the artist, and the artist’s entertainment attorney if any, to be very specific in the clause itself about what is contractually required of the record company. It should never be left to a subsequent verbal side conversation. In other words, working with his or her entertainment lawyer, the artist should write out a “laundry-list” clause setting forth each of the discrete things that the artist wants the label to do. As but a partial example:
Contract Clause #3: “To market and publicize the Album in the Territory, you, Label, will spend no less than ‘x’ U.S. dollars on advertising for the Album during the following time period: ____________”; or even,
Contract Clause #4: “To market and publicize the Album in the Territory, you, Label, will hire the ___________ P.R. firm in New York, New York, and you will cause no less than ‘y’ U.S. dollars to be expended for publicity for and directly relating to the Album (and no other property or material) during the following time period: _____________”.
Compare Clauses #3 and #4, to Contract Clause #1 earlier above, and then ask yourself or your own entertainment attorney: Which are more hortatory? Which are more precise?
As for Contract Clause #2 and its vague unexplained definition of “first-class facilities and equipment” – why not have one’s entertainment lawyer instead just include in the contract a laundry-list clause of the names of five professional recording studios in the relevant city, that both parties, label and artist, prospectively agree constitute “first-class” for definitional purposes? This is supposed to be a contract, after all, the entertainment attorney opines. “Don’t leave your definitions, and therefore definitional problems, for a later document or a later day, unless you truly want to make a personal financial commitment to keeping more litigators awash in business debating bad clauses and bad contracts before the courts”.