Anatomy of Entertainment Contracts (Pt. 2)

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Breach & Remedies:

A breach clause can be a separate clause or interspersed within other clauses. Make sure you make note of any language anywhere in the contract that discusses that a failure to do something, or doing something, results in negative consequences.

A remedies clause explains whether or not there is an opportunity to cure any particular breach before a party can take action against the other. It should explain how the offended party communicates to the other that a breach has occurred. This is typically in writing. If there is a means of rectifying the situation within a short amount of time, that would be explained within the remedies section, as well as any penalty attached, and how it affects the rest of the contract.

If the offended party seeks legal recourse against the other for the breach, this section would state what remedies the party could take (injunction, litigation and who pays attorneys’ fees , arbitration and who pays attorneys’ fees, etc.).  The remedies information relates to the jurisdiction of the contract, which is discussed below.

Termination:

A termination clause explains when and how the contract can be terminated between the parties. It typically also explains how the parties can reconcile any open-ended issues (bookkeeping, unpaid services, unpaid salary, etc.) upon termination.  If it doesn’t, ask.  

Assignment:

Assignments arise when one or both parties transfer their interests and/or rights and responsibilities in the contract to a third party or a successor. If the contract permits assignments, that needs to be spelled out. If not, that also needs to be spelled out. What notice the party has to give the other about a successor taking over their rights and responsibilities, and how that is communicated, should be explained in detail. Whether the non-assigning party has a period of time to terminate the contract with the successor party should also be clearly stated. If there is no reference to assignments in the contract do not assume it is permitted.

Jurisdiction:

Jurisdiction refers to what U.S. state or federal law governs the contract. If it’s an international contract, which country’s laws govern a contract have to be stated. If there is an earlier reference to remedies in the contract, any legal filings or actions regarding the remedies need to occur within the jurisdiction that governs the contract.

These topics are not all always required for every entertainment contract, and this is not an all-inclusive list of what needs to be in a particular contract.  But for contracts involving performance or transfer of rights or investments in projects, it should be a red flag if these clauses are not in the contract.  Entertainment is a business. You wouldn’t deposit money into a bank without knowing the terms and having a sense after reviewing the terms that your money will be safe.  Do not contract your talents and time, or invest in projects, without clearly knowing and understanding how you will benefit, that you will benefit in the way you expect to benefit, and that your risk will not exceed your benefit. Seek legal assistance so you can discern which contracts are in your best interest, and you are fully educated on the terms of the contract.  It is much easier, and cheaper, to walk away from a bad contract offer than to get out of a bad contract you are fully obligated to perform.