Many clauses in songwriter contracts are often lumped together at the end of the contract under the heading “Miscellaneous.” These clauses are common to most contracts, regardless of whether they pertain to music, and to that limited extent may be considered “standard.” Although they are seldom negotiated, they effect your rights and should always be evaluated and, if necessary, modified.
The issue of assignability has to do with whether either or all parties to an agreement can transfer their interest in the contract to someone else. Let’s assume you’ve signed a term songwriter contract with Big Hits Music Publishing. Big Hits is based in Nashville and places songs in the Top 40 Country Charts regularly. The contract calls for a modest advance, decent royalty splits, a 5 year term, and a reversion of copyrights back to you on any songs that don’t at least make it into the Top 100. With pride, you tell all your family and friends and sign off on a car note. Can Big Hits sell its interest in the contract to Small Potatoes Music Publishing, a company you’ve never heard of, operated out of Joe Blow’s 8 track studio in Selma? Can you sell your interest in the contract to a fellow songwriter who is down on his luck?
Generally, the songwriter should require that any assignment of the contract be subject to his or her prior written approval. Your bargain has been with Big Hits, not some other publisher. Big Hits will argue that it has bought your copyrights and, therefore, should be able to sell them to third parties if it wishes. But, you respond, the only reason you signed with Big Hits is its track record. You would never have risked signing on with an “unknown” publisher….unless, maybe there was a bigger advance.
A common compromise is for the songwriter to grant the publisher the right to assign the agreement to one of the publisher’s related companies, such as a parent or subsidiary, or as part of a sale of the publisher’s entire catalog, and so long as any such transfer is contingent on all the terms and conditions of your original contract remaining in effect. Any other transfers should be contingent on your prior written approval. The publisher will want language providing that your consent will not be unreasonably withheld, and that if you fail to object in writing to a proposed transfer within some short time of being notified, you will be deemed to have consented.
From time to time, parties to a contract wind up suing one another. The court is often asked to determine whether a party has breached some part of the contract. Occasionally, a court will rule that all or part of the contract is unenforceable. Maybe it is too vague. Maybe it is too one-sided. Maybe a part of the contract violates some obscure law that neither party knew about.
For example, your term songwriter agreement with Big Hits may prohibit you from writing songs for any other publisher in the United States for 10 years after your contract with Big Hits ends. A Texas court would probably hold such a “non-competition” clause to be unenforceable as an unreasonable restraint of trade. But does that mean that the entire contract would be void?
Severability clauses provide that if any portion of the agreement is held invalid, the other portions of the contract will not be affected, but will remain valid and enforceable according to their terms. It will be as though the offensive part of the contract had never existed. The rest of the contract stays in force.
CHOICE OF LAW
This brings us to choice of law paragraphs. In the above example, a Texas court would probably refuse to enforce a 10 year nationwide non-competition clause in a songwriter contract. But that will vary from state to state. The courts generally look to the reasonableness of the time and geographical prohibitions, as well as the public interest in free competition within the music publishing industry. It is a case by case approach, and what has been held “reasonable” in one state is often considered unreasonable and unenforceable in another. Another example is the California rule that injunctive relief is unavailable to enforce a personal service contract if the term exceeds 6 years. Texas has no such law prohibition.
Most questions of contract construction in songwriter agreements are questions of state law. Because the laws vary from state to state, the way your contract is interpreted, and the various meanings the courts will read into it may change depending on which state’s law is being used to interpret it. A New York court applying New York law will interpret your contract one way, while a Tennessee court applying Tennessee law may interpret it another way. A contract isn’t much good if you don’t know what it means, and if you don’t know which state’s law will be used to interpret the contract, you really can’t know what it means legally. The parties should agree in advance on which state’s laws will govern the interpretation of the contract, and should so specify in a choice of law paragraph. Parties generally want their home state’s law to govern, as that is the law with which their lawyer is familiar. Oh yes, the states also differ in the extent to which they will enforce these choice of law paragraphs.
Typically, you will have discussed your pending songwriter contract with a representative of the publisher before a draft of the contract is prepared. Perhaps you will have agreed on the major deal points, such as the term, advance, etc. What if the terms of the written contract differ from the oral representations made to you by the publisher’s representative? Once you sign the written contract, the written language will almost always control. The “parol” evidence rule excludes as inadmissible any evidence of prior oral agreements where the written language is plain and unambiguous.
When the parties have reduced their agreement to writing, and it is clear the parties intended the agreement to reflect their entire understanding, then unless there is some ambiguity in the written agreement, or some evidence of fraud, courts will look only to the “4 corners” of the written contract to determine the terms of the agreement. That is why you will almost always see a paragraph stating that “[T]his is the entire agreement of the parties.”
You may think you have agreed to one thing, but what the written contract says will almost always control, as if you had never had any informal oral understandings at all. The person who drafts the contract was probably not even a party to your conversations with the publisher. The publisher’s representative may agree to things or make promises to you that are outside his or her authority. You may just remember things differently. That’s why it is so important to have an experienced third party review contracts before you sign them.
Once a contract is signed and your working relationship with the publisher develops, you may both decide that certain parts of the original agreement need to be adjusted. To avoid disputes about subsequent oral modifications to a written contract, the contract will often include a requirement that any and all amendments and modifications to the contract be in writing, dated, and executed by all parties to the original contract. It’s not enough to agree on the phone that from here on out paragraph such and such won’t apply, or will be handled a different way. Get used to the idea that you are a professional and that your songwriter contracts control valuable property interests. Treat these like the serious business assets they are. Paper your trail. By that, I mean that every agreement, and every communication that modifies an agreement should be stated clearly in writing and signed by all sides to establish written evidence, or documentation, that some third party, like a judge, could put together to figure out exactly what your current arrangement is.
EXECUTION OF FURTHER DOCUMENTS
With songwriter and publisher contracts going on for so many pages, you would think they cover every conceivable issue. But lawyers drafting contracts are paid to be cautious, so they often include a safety net for unexpected contingencies and forgotten points. This safety net takes the form of a clause requiring you to execute any further agreements they may require at a later date. That’s pretty open-ended. My gut response is, “If you have anything you want us to sign, show it to us now and we’ll either agree to it or we won’t.” That’s not very realistic, though. If you are entering into an exclusive 5 year songwriting agreement for example, copyright assignments covering your future compositions will have to be executed and filed as you write the songs.
My “lawyer” approach is to limit the language of these clauses to what is realistically necessary. For example, the songwriter can specifically agree to execute future copyright assignments “as necessary to effectuate the terms of this agreement, in the form attached hereto as Exhibit ‘A’.” That way, we know ahead of time exactly what it is you will be asked to sign.
WHEN THE CONTRACT BECOMES BINDING
It is not uncommon to find language providing that the contract will not actually take effect until signed by the publisher’s authorized representative. This becomes a problem when the publisher sends you a contract, you sign it and send it back to the publisher, and then hear nothing more. You wait a few days, expecting to receive the modest advance you were promised, but nothing comes. Meanwhile, other publishers are wanting to make a deal with you. Are you free, or are you already spoken for?
One remedy is not to handle contract execution by mail. But with most music publishers being located outside Austin, that is not practical. There is some contractual language that can help. Specify that the contract is binding on neither party until all parties have signed and that the contract will be null and void and all offers considered withdrawn if the contract has not been fully executed on or before a certain date.
WAIVER OF RIGHTS
In previous articles, we’ve discussed the various rights and remedies each party has in the event the other party breaches the contract: an injunction, termination, etc. From time to time, though, one party will accidentally breach some technical requirement. The publisher may be one day late with a royalty payment (I wish!). Technically, you may have the right to sue or terminate, but you let it slide. Next time, the publisher is a month late. Again, you let it go. Are you giving up your rights to timely royalty payments by being a nice guy? When you finally run out of patience, will you be able to enforce your rights? A “waiver of rights” clause provides that neither party’s failure to exercise some power or right shall constitute a waiver, or relinquishment, of that right. This benefits both parties, because it fosters flexibility in extenuating circumstances, rather than necessitating a trip to the courthouse over every minor infraction.
“Force majeure” is a legal phrase used to describe an act of God or other natural disaster which delays or completely prevents a party’s performance of a contract. Generally, the fact that an earthquake or tornado prevents you from delivering a new song to your publisher, or prevents your publisher from shopping the song will not excuse the breach of contract. Therefore, lawyers have come up with aclause that expressly excuses such nonperformance. Some clauses attempt to list every conceivable disaster, including armed revolts, locusts and boll weevils, while others are more general and simply refer to “occurrences beyond the control of the parties.” Some clauses excuse the resulting nonperformance entirely, while others excuse a reasonable delay, (for up to 6 months, for example, unless the disaster is industry-wide.)
In most business relationships, there are instances when one party will need to contact the other. Contracts between the parties should specify these instances and provide a mechanism whereby these contacts take place. In the songwriter-publisher context, for example, the songwriter may be required to notify the publisher if he or she objects to a particular use of a song. The publisher may be required to notify the songwriter of its intent to exercise an option to renew a publishing contract for another year. I like to insert a provision requiring that if either party thinks the other is in breach of the contract, he or she must advise the offending party of the alleged breach and allow the offending party some reasonable time, perhaps 30 days, in which to cure or remedy the alleged breach before filing suit or terminating the contract. As you may have gathered from my previous articles, these contracts are complicated and it is not unusual for a party to innocently violate some minor technicality in the contract.
The issue then becomes how the parties “notify” one another. In the real world, you pick up the phone and speak. But in the legal world, memories get cloudy. The songwriter swears he told the publisher this particular thing at that particular time. The publisher remembers the conversation differently or not at all. For this reason, almost all contacts require that notices be in writing.
But that’s not the end of it. Where should notices be sent? Most contracts will contain each party’s current address and provide that notices be sent there or to such other addresses as the parties may designate from time to time. Even then, there may still be a problem with one party swearing she sent written notice, (and even having a copy of the letter as proof), and the other party swearing he never received it. A copy of a letter doesn’t prove it was mailed, much less received. For this reason, many contracts require that written notice be sent by certified mail, return receipt requested. (In order to accept the letter, the receiving party must sign for it on a green card, which the post office returns to you. The intended recipient can always refuse to accept the letter, but that is noted as well. If you suspect the other party will refuse to accept your certified letter, send a copy by regular mail at the same time. A court should then presume that you did all you could do to provide the other party with written notice.)
Don’t blame lawyers for these seemingly endless treatments of “simple” issues. Notice provisions probably started off simply enough, but as each party looks for a loophole to gain advantage over the other, (OK, maybe a lawyer found the loophole), lawyers are called upon to develop new language that will “keep that from happening again.” Reading recording and publishing contracts is in many ways like reviewing the history of the music industry. Each time one party feels taken advantage of, another phrase, clause, or paragraph is added to the next contract to “keep that from happening again.” Over time, these contracts begin to resemble overloaded Christmas trees, on which lawyers continue to hang one fancy ornament after another.
Speaking of fancy ornaments, here’s one I like to add: “A copy of any and all notices sent to [my client] must also be sent to Robert R. Carter, Jr. Attorney at Law, PO Box 1441, Austin, Texas 78767-1441.” (Let’s face it, if I have a paying client, I want to stay in the loop.) Seriously, if my client is on the road a lot, or is apt to forget to notify the other party of a change of address, misplace a notice in a bundle of incoming business mail, forget a deadline, or simply wants to avoid the delay of having to turn around and bring me a copy of the notice to review, it makes sense. Of course, then the other party’s lawyer wants to add a similar provision for their side, too. And the branches get heavier and heavier…
This is often the last paragraph. You agree and acknowledge that the document you are signing, even if it is only in a letter format, is an important legal document, and that you are aware of your right to seek counsel. This is put in the contract to help the publisher fend off any attempts you might later make to have the contract nullified because you “didn’t realize what you were signing.” Not having a lawyer is not grounds for rescinding a contract, in and of itself. But if the publisher can show that you were advised to get an attorney and you just chose not to, so much the better. Actually, the law presumes that you read the contracts that you sign. Take the warning at face value and go see an experienced entertainment attorney.
That just about exhausts my review of miscellaneous clauses, but not the collective imagination of my brothers and sisters in the bar. We’ll be thinking of more.