By Brian Taylor Goldstein, Esq. Dear Law and Disorder: We are a small classical music presenter. Several months ago, I booked an artist for a performance this fall. Recently, I received a phone call from the artist\u2019s manager asking for a deposit. Usually, we don\u2019t pay deposits, although, sometimes we will if it\u2019s an artist or manager with whom we have never worked before. However, we\u2019ve worked with this manager before and she\u2019s never asked for a deposit before. When I asked her about it, she said that she (the manager) was having a slow summer and that she needed the money to give her some cash flow to \u201ctide her over\u201d until the fall. She threatened to cancel if I didn\u2019t agree. Is this legal? As a general rule, I\u2019m a big fan of deposits. They provide artists with some \u201cleverage\u201d in the event of a cancellation and they provide presenters with some assurance that an artist has, in fact, been \u201cbooked.\u201d However, once all key terms have been negotiated and agreed upon, whether or not a written booking agreement has been signed, then a manager cannot retroactively \u201crequire\u201d a deposit. The requirement of a deposit is a key term which needs to be discussed, negotiated, and agreed upon at the outset of discussions. If the artist were to cancel because you refused to pay a deposit you never agreed to pay in the first place, then the artist would be in breach of the booking agreement. But that\u2019s not really the problem here. The problem is that the manager volunteered that she was asking for the deposit not for the benefit of the artist, but for the benefit of the manager herself. It would be different if the manager wanted the deposit to reserve airline tickets or advance costs to cover the artist\u2019s out-of-pocket expenses. However, according to you, that\u2019s not what the manager said. She said she wanted it to \u201ctide her over\u201d for the manager\u2019s own cash flow purposes. Based on that statement, and her subsequent threat to cancel if you refused to pay the deposit, the manager\u2019s actions are not only unethical and unprofessional, in my opinion, but, more importantly, highly illegal. Managers and agents are legally bound to act only on behalf of and in the best interest of their client (the artist) and not on behalf of themselves or anyone else. In legal terms, these obligations are called \u201cfiduciary duties.\u201d Managers and agents can take no actions which are not authorized by the artist and most certainly cannot treat the artist\u2019s money as if it were their own\u2014including asking for and using deposits to float themselves loans to cover their own cash flow needs. This is why, among other reasons, managers and agents are supposed to keep their own, personal operating accounts separate from their client\u2019s (artist\u2019s) accounts. This should not be confused with legitimate situations where managers and agents sometimes ask presenters to split an engagement fee into two payments and pay a commission fee directly to the manager or agent and the balance to the artist. While I find this to be an ill-advised and awkward business practice, it\u2019s neither illegal nor unethical. While I suppose its entirely possible that, in this case, the manager was acting with her artist\u2019s knowledge and authority, I seriously doubt it. This means that the manager was acting out of her own self-interest and not in the best interest of her artist, is in breach of her fiduciary duties, is no longer acting in her legal capacity as a representative of the artist, and, in the event of a cancellation, would be personally liable for the return of the deposit and any damages. Given the manager\u2019s self-admitted cash flow problems, that\u2019s probably a risk you don\u2019t want to take. I\u2019d like to think that the manager is acting out of a genuine confusion over the duties agents and managers owe to their artists. Sadly, this issue continues to confuse even experienced managers and agents who believe that their artists work for them and not the other way around. Regardless, in terms of red flags, this one is ten feet tall and on fire. Run away! __________________________________________________________________ For additional information and resources on this and other legal and business issues for the performing arts, visit ggartslaw.com To ask your own question, write to lawanddisorder@musicalamerica.org. All questions on any topic related to legal and business issues will be welcome.\u00a0However, please post only general questions or hypotheticals. GG Arts Law reserves the right to alter, edit or, amend questions to focus on specific issues or to avoid names, circumstances, or any information that could be used to identify or embarrass a specific individual or organization. All questions will be posted anonymously. __________________________________________________________________ THE OFFICIAL DISCLAIMER: THIS IS NOT LEGAL ADVICE! The purpose of this blog is to provide general advice and guidance, not legal advice. Please consult with an attorney familiar with your specific circumstances, facts, challenges, medications, psychiatric disorders, past-lives, karmic debt, and anything else that may impact your situation before drawing any conclusions, deciding upon a course of action, sending a nasty email, filing a lawsuit, or doing anything rash!<\/p>\n