MusicDish e-Journal - December 15, 2017
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How To Escape From A Music Business Mess
The importance of including an "Escape Clause" in every music business contract that you intend to sign that lasts for a period of time
By Professor Pooch
(more articles from this author)
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Could you picture, as a creative person or entity such as an Artist, Band or Songwriter, being signed with a person or company who can't advance your career? Maybe, they're even one of those people who signs everyone they can who they think can succeed - and then sit back and do nothing -waiting for you to do it all on your own. But you can bet they'll be there when the money starts to come in.

The fact is, you will find that in most Contracts, it usually states what one side of the table must do - but not the other side! A good example is a Recording Contract, where, if you read between the lines, it never promises they will ever release the Music you've recorded - but you can bet it says what You must do!

Another example may be an Artist Management Contract where it will state what an Artist must do for their Manager and their career, but not what a Manager must do for their Artist - or it's very vague. It may say something like "the Manager will use reasonable effort…" And who is to decide what "reasonable" means?

These are just a few examples of quite a few Music Industry Contracts that vary in length for different amounts of time, whether it may be a Management Agreement for 5 years, a Recording Contract for a bunch of albums or "periods", or a Songwriter's Agreement, where the Publisher may own a song for life, or quite a few other types of contracts with varying lengths. There are even contracts that have no definite ending explicitly stated - and you're stuck for an insane length of time in a horrible situation - maybe even for life!

The point is, if there are "performance clauses" in your contract, where you have to perform tasks and duties that live up to their expectations, why can't you add performance clauses where they also have to live up to at least reasonable expectations.

To the point: You must have an escape plan - a way to escape from a bad situation - before it gets any worse!

That is, you should have what is usually known as an "Escape Clause" [sometimes known as a "Release Clause" or "Reversion Clause" - depending on the type contract]. And you should have one in any and every contract you're intending to sign that lasts for a period of time, so that in case the person or company you've signed with can't or doesn't do their job, you can legally break the contract - and escape!

In effect, an escape clause is a "performance clause" that insures that the person offering the contract performs their job - and performs it well.

A well, written escape clause contains these three elements:

1. A specific, reachable goal or goals that you wish to reach, and,
2. A specific time in which to reach that goal, or,
3. You can be released early from your contract if the goal isn't met in that specified time period - and all your rights revert back to you.

Here's a simply worded example of an escape clause:

"Manager promises that, if within 18 months of the signing date of the Agreement, Artist has not received a recording contract from a Record Company, then Artist may ask to be released from the contract".

Therefore, if it's a five year contract, for example, you have a chance to get out of it much earlier if the Manager doesn't do their job.

But, wait a minute! There's a major problem with that so-called "escape clause" I just gave you! As I stated, it must be specific! The way it's written above, your Manager's mom could start a record company (which is very easy to do), and you won't get to sign with that Indie or Major Label you always dreamed about! What it should say is (for example): "… a nationally recognized and internationally distributed Recording Company, such as…" - and list the Major or Indie Labels you'll accept.

Let's look at a Songwriting Agreement. A must is the "reversion clause" which should at least state something like, "if your Song is not commercially recorded and released through a legitimate, nationally recognized and distributed Recording Company within a certain period of time, [usually one year to 18 months], ownership and all rights to the Song, Revert back to you - that is, they become yours again.

Or with a Record Company it should state something like, "If your recording is not released nationally and internationally through normally recognized retail channels in physical and digital formats, within one year, you can ask to be released from your Agreement - and they must allow you to leave.

By the way, you can also ask for continuing goals to be reached at different specific time periods. And you should always make sure that, if you sign more than one contract with the same person or company, that if one contract ends - they all end at the same time!

To sum it up: No matter how great the person or contract seems, safeguard it by having a Music Business Contract Specialist, such as myself or an Entertainment Attorney, insert a well written "Escape" or "Release" clause. In plain language - an escape clause can save your ass!

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