Contracts

I’ll use this blog to outline what contracts exist within the Australian creative media context and give a brief run through of an example contract which I signed recently.

The creative industries are filled with big ideas which end up fizzling out as nothing more than that. However, some ideas progress into something more lucrative and contracts are a good way of establishing who gets what.

http://caglarlaw.com/contract-law/

So What Is A Contract?

According to the Arts Law Centre of Australia, a contract is a legally enforceable understanding between two or more parties. Within that understanding (the contract), is a set of exchangeable promises, whereby one party gives something in return for something else.

That something could be money, it could be services, it could even be rights. What a contract does then, is establish what “things” are getting exchanged and commits all parties to uphold the agreement. If any party infringes on this agreement, a court of law is able to prosecute the offending party and extract the value of the “thing” withheld.

It is important to note though, that an agreement is not necessarily a legally binding contract. There are four necessary elements to turn an agreement into a contract and, according to the Arts Law Centre, they are:

  • Offer: a clear offer by one party to another. If an offer is rejected, that offer automatically ends;
  • Acceptance: the other party must accept the whole offer without conditions. It’s worth noting that there can exist a negotiation or what is referred to as a “counter offer.” There can exist many offers and counter offers before an agreement is made.
  • Consideration: this is what both parties give to the other as the price for the other’s promises. The price does not have to be money. It can be some other “thing” and discussed before; and
  • Intention: the parties entering into the contract must intend to create legal relations.

There are many layers of nuance to contracts which I cannot possibly address here but I will give an overview of them. What I described above is the general concept of a contract, however there are many unique forms of contract which can apply to musicians.

For instance, there is a massive difference between enlisting a musicians services as “work for hire” versus entitling that musician to the profits of the music made; this is called signing a release form. To help better illustrate the point, I’ll create two contrasting scenarios:

Scenario 1

I have created an instrumental piece of music and would like to enlist the help of a friend to add vocals to it. My friend likes the music and agrees to work with me. Before we begin our collaboration, I make an offer to him. The offer states that no money will be exchanged for his services but he is entitled to 50% of all potential profits made through licensing and distribution of the song.

Scenario 2

I have created an instrumental piece of music and would like to enlist the help of a friend and add vocals to it. My friend likes the music and agrees to work with me. Before we begin our collaboration, I make him sign a release form. This release form states that I will pay him for his services at $20 per hour. After which, 100% of potential profits from licensing and distribution go to me.


There is a massive distinction here. In scenario 1, my friend is working for free but if the song goes on to chart around the world, we could both make a pretty penny. Of course it is also likely that nobody outside our group of friends ever hears the music and so it results in no monetary gain for either of us.

In scenario 2 however, I have agreed to pay my friend $20 per hour for his services. Lets say I recorded him in the studio for a total of 5 hours. At the end of the collaboration, he has made $100 regardless of the song’s success. However, if this song goes on to be a huge hit, he still only ever gets that initial $100 while I get all the money that comes from licensing etc.


During this trimester, I have contributed towards creating a Polish documentary. Before I could begin working within the team though, I had to sign a contract. The type of contract is similar to the contract from Scenario 2; whereby I agreed to offer my services as “work for hire” and I am entitled to none of the monetary gain resulting from the work produced.

Unfortunately, the rate at which I am paid is far less than the $20 per hour in Scenario 2 (I don’t get paid) but the concept of the contract is the same. There are of course additional clauses involved, including the types of services I am expected to provide, health and safety clauses etc, but the main point for the purpose of this blog, is the nature of my work — i.e. work for hire.

snapshot of the contract

References

AMCOS, A. (2017). Copyright. [online] Apraamcos.com.au. Available at: http://apraamcos.com.au/music-creators/copyright/ [Accessed 7 Dec. 2017].

Arts Law. (2017). Arts Law : Information Sheet : Contracts: Getting it right. [online] Available at: https://www.artslaw.com.au/info-sheets/info-sheet/contracts-an-introduction/#headingh21 [Accessed 7 Dec. 2017].

Farmelo, A. (2017). A Brief Introduction to Contracts for Freelance Engineers, Mixers and Producers. [online] Tapeop.com. Available at: https://tapeop.com/tutorials/73/intro-contracts/ [Accessed 7 Dec. 2017].

McDonald, H. (2017). What to Know Before You Sign a Contract with a Music Manager. [online] The Balance. Available at: https://www.thebalance.com/before-you-sign-a-music-manager-contract-2460382 [Accessed 7 Dec. 2017].

Vincent, J. and Louise, G. (2017). 10 Music Contracts. [ebook] Paris: United Nations Organization for Education, Science and Culture. Available at: http://www.unesco.org/fileadmin/MULTIMEDIA/HQ/CLT/diversity/pdf/WAPO/10Music_en.pdf [Accessed 7 Dec. 2017].