For Those About to Contract...
As mentioned in the “Law Generally” section, contract law is the law controlling what contracts can and can’t say and how what is said in them is interpreted. Contract law will affect any kind of contract you enter into in the music industry, whether its your band contract, partnership agreement, songwriter’s agreement, management contract, publishing agreement, recording deal or distribution agreement - the list goes on!
But it’s worth clarifying exactly when a contract might exist, which often can be long before anyone goes to a lawyer to get a long, dull, complex, wordy contract drawn up.Verbal Contracts - You Said, I Said
At the simplest level, an agreement or contract can exist between two or more people as soon as “agreement” is reached. Simple as that. A “verbal contract” can be created if there is “agreement” on what will or will not happen between them and, in doing so, each person intends to create a legally binding relationship. A “verbal contract” will be as legal and binding on each party as a written contract, but obviously it will be a lot harder to remember exactly what was agreed down the track. It will also be a lot harder for one party to even prove there was an agreement if another party denies it.
For that reason, verbal contracts are best avoided, except where absolutely necessary. But don’t be scared, drawing up a written contract isn’t as daunting as it might sound.Written Contracts
Again, in simple terms, a written agreement can exist as soon as two or more people record their agreement in writing of some form, and signify their agreement to it - it could be a formal contract or the back of a set list! In most cases, a written signature would be required to prove this agreement. The main reason you would draw up a more formal agreement, either yourself or through a lawyer, is to make sure that all of the agreed terms are set out properly and clearly, which has two advantages. First, it means the parties agreeing to it are more likely to properly understand what is agreed, both so there’s no misunderstanding about the contract which might lead to problems later on and so they are each clear in their minds about what it is they now have to do. Second, it means that if there is a dispute or misunderstanding later, the written terms should solve it - there’s nothing worse than leaving out a key term of the agreement! If someone doesn’t do what the contract says they should do, the other person to the contract may be able to terminate the contract, or take action to recover loss suffered.
Of course, the main reason you would have a lawyer draw up your contract for you is to make sure all the issues are covered and both dealt with and expressed properly. It is always worth going to this extra effort (and expense!) if you have a lot at stake, and let’s face it, your future - and chance of success - in the music industry is a lot to risk!
Have a look at the “Managing” page in the Muso Stuff section for further persuasion.
Lastly, its always worth getting enough versions of the contract signed to give to each person signing it, or at least a photocopy of what was signed, and keep yours in a safe place, you never know when you might need it to resolve a dispute or just “check up”.Implied Contracts
Now just to confuse you, a binding contract can exist between two or more people even where there is no written agreement or document of any kind, nor a verbal deal. They are rare. In essence, it can occur when the parties, by their actions, act in a way which suggests there is an agreement between them or is consistent with the “trade or custom” in a certain area, or where the law considers it would be unfair if one person was able to escape from their obligations without redress. In a similar way, the law can often imply one or more clauses into an incomplete contract for similar reasons.
But look, this is all getting a bit too legal - stick with the rule that as soon as you start to agree anything significant or substantial with anyone, think about using a contract! If can work for safe sex, it can work for you, and your career in the music industry.What Use is a Contract?
It's a good question - what is the point of a contract, especially if someone breaches it?
Apart from the benefits stated above (namely that going to the effort of setting out and signing a written contract detailing what is agreed and who does what might make it more likely that each party to the contract knows exactly what is expected of them) as well as the likelihood that having it in writing, signed by them, may keep them honest, the main advantage of the contract is to clearly state what was agreed and what should happen, in the event of a dispute. It should put an end to your bickering and arguing!
But in the event that it doesn’t, the real value or point of a contract is to give any party to it the right to enforce the contract. In general terms, if one person breaches (or does not perform) their obligations in a contract, the other person can terminate the contract or sue them for the loss they might suffer as a result. This does mean you’ll ultimately have to go to court, or at least be willing to, in order to “persuade” the other person to fulfil their end of the deal, but that, unfortunately, is the way it all works. Let’s hope it never gets to that stage. A lot of angst can be avoided by a clear, well written contract.
An introduction to contracts (and a lot more good and very detailed thoughts on them) is available on the Legal Information section of the Arts Law Centre of Australia
Alright then, with all those general legal thoughts in mind, lets move on to the topics.
The Arts Law Centre of Australia has further information on contracts (as well as many of the legal areas we cover here in Legalease It, and which we link to throughout) so have a look at their "contracts" info sheets: