Posts Tagged ‘Contracts’

Understanding Legalese

Thursday, May 28th, 2015

By Brian Taylor Goldstein, Esq.   

Dear Law and Disorder:

Every time someone sends us a contract, its always a lengthy document with lots of legalese that no one understands. Is there anything wrong with having a simple, one page agreement that everyone can easily understand and will sign?

A lot of people mistake “legalese” for language and terms they either don’t understand or haven’t considered. They see words on a page and immediately assume they can’t possible understand them.

This is legalese:

The party of the first part, which party has previously and hereinafter shall continue to be referred to as the Presenting Party, in and for the mutual obligations, conveyances, and other considerations contained herein, the sufficiency of which are hereby acknowledged, does for itself and on behalf of its officers, directors, employees, agents, and assigns (hereinafter the “Presenting Parties”), which the Presenting Party does herein attest, warrant, and represent that it has the authority so to represent and bind under the terms of this agreement, does herein and hereby concur, agree, and consent to prohibit, prevent, proscribe and preclude, so the best of its reasonable ability, the degree and extent of such “reasonability” to be determined herein as the term “reasonable” is defined in this Agreement hereunder, the recording and/or memorialization through any and all visual and/or audio and/or audio-visual means and methodologies now existing or hereinafter discovered, invented, or devised, including, but not limited to photography, analog and digital sound recordings, videotaping, screen captures, and any other human or machine-readable medium, the performance of the party of the second part, which party has previously and hereinafter shall continue to be referred to as the Performing Party, including, but not limited to, the performance or any portion of the performance of the Performing Party, including, but not limited to, excerpts, samplings, moments, movements, scenes, rehearsals, outtakes, or other manifestations of the performance or any portion of the performance of the Performing Party, for any purposes of any kind or nature, including, but not limited to…well, you get the idea.   

 This is not:

The Presenter agrees to prevent any unauthorized broadcasting, photographing, recording, or any other transmission or reproduction of any performance(s) or residency activity of the Artist, or any part thereof, by any means or media now known or hereafter invented, including, but not limited to audio, visual, or audio-visual means, and including any “archival” recordings, unless the express prior written consent of the Artist has been obtained.

The difference is that the first example uses unnecessary verbiage, poor grammar, and confusing structure. The second example just has a lot of detail. Don’t confuse “legalese” with “detail.” Whereas you don’t want legalese, you do want detail. Why? Because the whole point of a written document memorializing the terms of an agreement (also known as a “written contract”) is to convey information—not just to have a piece of paper that everyone signs.

Too many people want contracts that are “simple” and “brief” so that the parties will sign them, but that’s pointless. Merely having a signed contract does not mean that an engagement won’t get canceled, that commissions will get paid, artists won’t leave, or that any number of nasty things won’t happen to you. Signed contracts are not self-enforcing. If a dispute arises that cannot otherwise be resolved, the only way to enforce the terms of a contract is with a lawsuit. Lawsuits, as you know, achieve nothing other than making trial lawyers ecstatically happy and wealthy. No one in the performing arts can afford that, either personally or professionally. You don’t want to wait until a dispute arises to find out that you and the other party had vastly different assumptions about what was and was not expected and allowed. Instead, you want to make sure that everyone understands all of the aspects of a project or engagement at the outset and, hopefully, can discuss and evaluate the risks, challenges, advantages, obligations, and expectations of the relationship before they agree to it. In other words, you use a contract to educate, not to enforce.

What determines the length of a contract is the complexity of the project or engagement itself. An agreement for a single artist to perform a single recital is going to be shorter than an agreement for an orchestra to perform a world tour. Similarly, an assignment or transfer of all rights is going to be less complex than a recording agreement or an agreement to re-orchestrate an existing work.

Our industry is blessed with amazingly creative and dynamic professionals who are second to none when it comes to creating imaginative collaborations and engaging performances. However, they become slightly less than stellar when it comes to understanding the business and legal arrangements necessary to effectuate these plans. It’s one thing to discuss dates, repertoire, scheduling, and fees. It’s quite another to consider all of the various details, challenges, and misunderstandings that might come into play: will music or other copyrighted materials need to be licensed? If so, whose responsibility is this? Can either party cancel? Under what circumstances? What if someone gets sick or there is a fire at the venue? Who bears the loss of expenses cannot be recovered? Who is responsible if an artist is injured? Who is responsible for someone in the audience gets hurt? Who is responsible if an artist or crew member damages property of the venue? Who is responsible if someone from the venue damages property of the artist or show? Will visas be required for any artist? Whose responsibility is this? Is the engagement fee to be paid in dollars, pound sterling, euros, or other currency? Which exchange rate will apply? Who is responsible for taxes? Are deposits non-refundable?

This is where a contract comes into play. Yes, it takes time to create and read all of this detail. However, a detailed contract can be filled with all sorts of interesting and mutually beneficial revelations. For example, when recently negotiating the terms of an engagement for one of our own artists, I presented our engagement contract to the presenter—which contains a clause, much like the one above, prohibiting any recordings, including archival recordings. The presenter wanted to make an archival recording and assumed, incorrectly, that these were always permitted. We were able to find a workable solution and adjusted the contract accordingly. We also discovered that while the presenter had not factored in meals and transportation into the budget, we had misunderstood when the presenter actually wanted the artist to arrive. We were able to adjust all of these issues, none of which would have been discovered had we not taken the time to think through all of the various details. In the end, it didn’t matter whether or not the contract was even signed because going through the process itself allowed the presenter and I to discuss all of the details. The contract served its purpose.

In short, a more detailed contract that makes people stop and say “wait, I didn’t agree to that” or “what exactly do you mean by this?” is far better than an artificially simplistic one that everyone signs now and then squabbles about later whilst lashing out such cherished and time-worn drivel as “but that’s industry standard” or “that’s the way its always done.”

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For additional information and resources on this and otherGG_logo_for-facebook legal, project management, 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, management, and business issues will be welcome. However, 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 and/or posthumously.

__________________________________________________________________

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!

 

 

The Damaging Truth About Cancellation Damages

Thursday, March 12th, 2015

By Brian Taylor Goldstein, Esq.   

Dear Law and Disorder:

A presenter wants to breach our engagement contract by cancelling. Our cancellation clause says that, in the event of cancellation, we get 50% of the engagement fee or actual damages. They are offering 50%, but at this stage want the full fee.

If you have an engagement contract that has a cancellation clause, and a presenter cancels, then the presenter is not breaching your contract. A contract breach only occurs when someone fails to do something the contract requires (such as pay a deposit) or does something the contract does not permit (such as record a performance). In this case, if your contract has a cancellation clause, then you have given the presenter the right to cancel. So long as the presenter complies with the terms of your cancellation clause, then they are not in breach. They are merely exercising the right you gave them to cancel. If you don’t want them to cancel, don’t give them the right to do so.

According to your cancellation clause, if a presenter elects to cancel, they have to pay you either 50% of the engagement fee or actual damages. However, your actual damages may or may not be the full engagement fee. To determine whether or not you are entitled to the full engagement fee, you first have to calculate your “actual damages.” Actual damages are simply that: your actual out-of-pocket losses from the cancellation of that particular engagement. No more. No less. Calculating “actual damages” involves taking the full engagement fee and subtracting any costs or amounts you saved or did not incur as a result of not having to perform.

In some instances, the “full engagement fee” might include the performance fee as well as other costs, such as the value of travel and/or hotel that the presenter was covering. However, for the sake of simplicity, let’s assume that the full engagement fee was $5000, of which you needed $2000 to cover costs such as travel and equipment, leaving $3000 for profit. If by cancelling, you did not have to incur the travel and equipment costs, that means you saved $2000, and your “actual damages” are $3000. You would only be entitled to the full fee of $5000 if the engagement were cancelled too late for you to save or recoup any of your costs.

However, “actual damages” can never exceed the total value of the full engagement fee. As we all know, sometimes a single cancellation in a larger tour can also have residual implications. What if you were counting on the travel and hotel from a larger presenter to “underwrite” the costs of a smaller engagement fee from another presenter or run-out? If the larger engagement gets cancelled, that may necessitate the cancellation of the smaller one as well, or even the entire tour. Sadly, those losses are not “actual damages.” That’s just called bad planning.

Just because you were counting on something to make an entire tour break even, does make the loss “actual damages.” If the loss of a single engagement will trigger a domino effect, such as the cancellation of the entire tour, then, in addition to “actual damages”, you have suffered “consequential damages.” I know, that doesn’t make sense, but lawyers came up with these concepts hundreds of years ago and contracts still use the same broken terminology. This is the risk inherent in using contractual language you copy from someone else or don’t fully understand. You may inadvertently be using language that makes sense to you, but has a different legal meaning. The solution is simple: use English and be specific—even if it means (perish the thought!) using more words. For example, rather than write “we get 50% or actual damages” write what you mean:

If you cancel the contract, we get either a minimum of 50% of the engagement fee or all of the damages we actual incur as a result of the cancellation, including the cancellation of other engagements and/or any additional costs we must incur for travel, hotel, or other tour expenses, whichever is greater.

Wordier? Yes. Clearer? Indeed. An even clearer solution? Specify at the outset that the engagement is non-cancellable.

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For additional information and resources on this and otherGG_logo_for-facebook legal, project management, 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, management, and business issues will be welcome. However, 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 and/or posthumously.

__________________________________________________________________

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!

 

 

 

 

The Divine Right To Cancel

Thursday, February 12th, 2015

By Brian Taylor Goldstein, Esq.   

We were in the process of booking one of our singers with an orchestra, when we encountered the following Force Majeure clause in the orchestra’s contract: “If, as a result of any event beyond the control of the Orchestra, including, but not limited to, war, national calamity, strike, labor relations, lack of funds, poor ticket sales, or other Acts of God or force majeure of any kind or nature, Orchestra determines it necessary to suspend, cancel, or terminate the giving of any of the performances specified herein, then the Orchestra, in its sole discretion, shall have the right to do so by giving notice to the Artist. Upon such notice, the Orchestra and Artist shall be relieved from any further obligations under this Agreement without any liability of either party to the other for any damages arising from such suspension, cancelation, or termination.” We asked if they would strike the reference to “lack of funds” and “poor ticket sales”, but we were told that their contracts must be approved by their board of directors and, as such, nothing can be changed. Have you encountered this before? Do you have any advice on how to respond?   

Telling someone that a contract cannot be changed because their board of directors says it can’t be changed is the equivalent of a parent telling a child “because I said so.” As I am frequently reminded when faced with the manifest irrationalities of my own parents: do not engage and back away.

I actually don’t doubt that the orchestra’s board of directors did, in fact, suggest and recommend such language. It’s just the type of thing a poorly formed board of wealthy corporate donors with no actual arts experience would come up with. (It brings to mind an occasion when I was called in to consult with a board of directors who was insisting that no season could be planned or programmed unless the artistic director was willing to guarantee exactly how many tickets would be sold to each performance!) Regardless, such language is absurd and quite frankly, insulting and unprofessional.

It is absurd because, as I have previously written, a force majeure clause is supposed to be limited to events truly beyond anyone’s control: floods, snowstorms, terrorist attacks, etc. Ticket sales and funding are not determined either by serendipity or the intervention of divine energies (though I often suspect many strategic plans are based on such notions.) I find it insulting and unprofessional because the orchestra’s board of directors is trying to obfuscate a cancellation provision under the pretext of a force majeure clause. By defining force majeure to include “lack of funds” and “poor ticket sales” the orchestra is attempting to give itself the luxury of being able to cancel at any time for any reason with no liability or consequence. Contractually, this would render the Agreement terminable at will by the orchestra and, thus, meaningless for the Artist.

As a compromise, I would propose amending the force majeure clause and adding to the agreement a proper cancellation clause whereby, if the Orchestra felt that it needed to cancel due to “lack of funds” or “poor ticket sales” then they would have the right to do so by paying a specific, pre-determined cancellation fee. If the orchestra refuses such a reasonable alternative, then I would simply thank the orchestra for its time and walk away.

I realize, of course, that, in practical terms, artists are not always in a position to walk away. Just like good art always requires risk, occasionally this applies to deals and negotiations as well. Perhaps the artist is young and needs engagements. Or perhaps the engagement presents an artistic or resume-building opportunity to the artist. Those might be reasonable reasons to take a risk. However, such risky transactions must be entered into with eyes wide open as opposed to wide shut. As the artist’s manager, it falls to you to make sure the artist understands the risks and that both of you understand that, should the orchestra avail itself of its contractually unfettered right to cancel, you will accept that and, whilst reserving the right to swoon, sway, and cry foul, resist the temptation to threaten a frivolous lawsuit.

_________________________________________________________________

For additional information and resources on this and otherGG_logo_for-facebook 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. However, 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 and/or posthumously.

__________________________________________________________________

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!

 

“Leave Here and You Die!” Unenforceable Non-Compete Agreements

Thursday, November 13th, 2014

By Brian Taylor Goldstein, Esq.   

Dear Law and Disorder:

The management company where I work has asked me to sign a non-compete agreement saying that, if I ever quit or am fired, I would be prohibited from working as a manager or agent anywhere in the world for one year after I leave. The owner also contends that the names and addresses of all venues belong to him and that I cannot contact any presenters or venue where I booked an artist for him. Do I have to sign this? Is this reasonable?  

You never have to sign anything. Can an employer require an employee to sign a non-compete or be fired? Under certain circumstances, yes. Are the terms you describe reasonable? Hardly. More importantly, even if you signed it, I doubt very much that such an agreement would be enforceable.  

In most instances, parties can use a contract to negotiate and agree to just about anything: how and when artists are paid, how commission are calculated, how rights are transferred or licensed, who files and pays for visa petitions, how royalties are calculated, whether the artist gets still or sparkling water in the dressing room, liability, insurance, benefits, salaries—the list is practically endless. However, there are certain instances—albeit rare—when a contractual term will be rendered void or unenforceable. Such instances include:

(1) When a contract either requires a party to do something which would be illegal or refrain from doing something which they have a legal obligation to do.

(2) When a contract term violates an existing law or policy which courts have decided cannot be altered.

Contracts are governed by state laws. In this case, most state laws (particularly the State of New York) will not enforce a non-compete agreement which a judge determines to be “unreasonable” or “over-reaching”—even if the parties agree to it. Reams and reams of case law have determined that prohibiting an ex-employee from working with current clients of the employer is reasonable, but only for a reasonable amount of time—such as a year or two (sometimes longer depending upon the specific circumstances.) However, unless an ex-employee was also the CEO or President of the company, prohibiting an ex-employer from being able to work in the industry in which they earn a living is considered inherently un-reasonable and never enforceable. Simply put, no employer ever has the right to force an ex-employee to move to a different state, change careers, or be rendered unemployable. If the situation were otherwise, too many employers could use the threat of termination to induce or force employees to sign unreasonable non-compete agreements.

As far protecting the confidential or propriety information of an employer, a court will enforce such an agreement provided the information was confidential or proprietary to begin with. Under the Law of Agency, when someone represents someone else, all information belongs to the person they represent. With regard to the arts and entertainment field, any information pertaining to an artist—engagement agreements, the names and contact information of any venues or presenters a manager or agent has contacted on behalf of the artist, the terms of any engagements under negotiation or discussion, etc—all belong to the artist, not the artist’s manager or agent. Moreover, names and addresses are never “proprietary.” The term “proprietary” refers to something unique created or invented by an employer and specific to that employer—such as the colonel’s secret chicken recipe, internal operating procedures or budgets, mark ups, etc. Simply because a manager or agent writes down the name and address of a venue does not make it proprietary. To be sure, an employee, much less an ex-employee, is never permitted to take the physical property or download the files of an employer. However, if something such as names and addresses can be found elsewhere—such as on the internet, in a published list, or is otherwise publically available—then you are free to compile your own list of such information.

As for not being able to book or contact any venues or presenters where you booked artists for a former employer, once again, whether or not this would be enforceable would depend on the “reasonability” of the restriction. If were are talking about a prohibition against contacting particular venues in a particular region for a reasonable period of time, that would probably be enforceable. However, if enforcement of such a restriction would prohibit you from being able to book any artists at any venues in the United States or world-wide that would never be enforceable.

It’s frustrating enough when an artist leaves a roster—its even more so when a trusted employee quits and takes an artist with them. In a highly competitive and risky business, its understandable that artist managements and agencies are looking for ways to protect their interests and livelihoods. However, draconian contracts, strong arm tactics, and paranoia, though frequently embraced, are never appropriate or productive solutions.

Just because an agreement may be unenforceable does not mean you should sign it anyway. An angry and emotional ex-employer may still try to enforce it, requiring you to spend legal fees and court costs getting a judge to throw it out of court. You never want to enter into any agreement knowing at the outset that it will lead to a lawsuit—even if it’s a lawsuit you believe you will win. Certainly, if you are ever asked to sign such an agreement as a condition of employment, run away. However, if your current employer is insisting that you either sign or face unemployment, and a calm discussion offering reasonable restrictions and alternatives falls on deaf ears, you may have no choice but to run the red light and tear up the ticket later.

__________________________________________________________________

For additional information and resources on this and otherGG_logo_for-facebook 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. However, 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 and/or posthumously.

__________________________________________________________________

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!

 

 

 

 

Whose Lawsuit Is It Anyway?

Thursday, October 30th, 2014

By Brian Taylor Goldstein, Esq.   

Dear Law and Disorder:

I’m dealing with a presenter who wants to cancel two weeks out due to poor ticket sales. While it’s not a huge engagement fee, my artist has already contracted its performers and paid out expenses for the date as its part of a bigger tour. I have a cancelation clause in my contract and I’ve explained what canceling would mean and that the presenter will be on the hook. However, he still wants to cancel. Its been a rough year and I can’t afford legal counsel. Do you have any suggestions?

At least the presenter is not trying to claim that poor ticket sales constitutes an act of God. While I am familiar with many organizations whose strategic plans require some degree of divine intervention to stay operational, God rarely takes an interest in ticket sales.

If you have a cancellation clause in your contract, then that will govern the legal remedies for the situation. Contractually, the presenter either has the option of either proceeding with the engagement or cancelling and abiding by the terms of the cancellation clause (which, I am hoping, spells out how much the artist is owed in the event of cancellation). If the presenter elects to cancel, but refuses to honour the terms of the cancellation clause, that would constitute a breach of contract…which really just gives the artist the right to sue the presenter, obtain a judgment, and, hopefully, collect the judgment. Whether or not attorney fees, interest, or court costs would also be part of the judgment depends on the terms of your contract as a judge has no authority to awards such costs unless the contract requires them. However, regardless of the terms of your contract, a lawsuit should always be the last resort under any circumstances.

Have you tried discussing with the presenter any solutions for increasing ticket sales or promoting the performance? Does your artist’s shows typically sell at the last minute? Has the artist ever performed in this market before? Don’t presume the presenter knows its own market or how to sell your artist in that market better than you do. You may have ideas for selling tickets that the presenter has not considered.

Is the person you are dealing with the final decision maker in the organization? If not, don’t hesitate to go over their head. Don’t threaten—just do it! If the presenter is a non-profit organization, then even the president or executive director reports to the board of directors. Contact the board president or an officer of the board. Often board members are far less cavalier about breaching contracts than an organization’s administrative staff. Its very possible that the board doesn’t even know about the situation as many presidents and CEOs are quite proficient at keeping their boards on a need-to-know basis.

If the presenter refuses to honour the cancellation clause, resist the urge to scream, threaten anyone’s reputation, or toilet paper the venue. While tempting, those options rarely work and will almost always make the situation worse. Ultimately, the decision as to whether or not to file a lawsuit, along with costs and expenses of filing the lawsuit, belong to your artist, not to you. Regardless of whether or not you signed the contract, if the contract is between the presenter and your artist, then all legal claims belong to the artist and only the artist can file a lawsuit and appear in court. You should not be paying or incurring any legal fees out of your own pocket. Unless you, too, are operating as a charitable institution, if the artist wants to pursue a lawsuit, that is their cost burden to bear, not yours.

__________________________________________________________________

For additional information and resources on this and otherGG_logo_for-facebook 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. However, 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 and/or posthumously.

__________________________________________________________________

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!

 

Is Ethics Only In The Eye Of The Beholder?

Thursday, July 17th, 2014

By Brian Taylor Goldstein, Esq.   

Dear Law and Disorder:

An artist we have been representing for over 10 years just told us that he is leaving our roster and will be joining the roster of another management company. We didn’t have a written agreement, but we’ve never needed one as we’ve always believed that if you act ethically and professionally, others will do the same. While we think the artist is making a mistake, we are not interested in arguing his right to leave and want to make the transition amiable. The artist has agreed to honor our commissions for the dates we have booked. However, the question has come up as to whether we are obligated to give the artist all of the leads and contacts we have been pursuing on his behalf that have not been booked yet. That doesn’t seem fair. We have been working on some presenters for years, have invested a lot of time, and consider that to be our proprietary information. If we turn all of that over to his new manager, that’s just going to be a gift to the new manager who will follow up on all of our work and take the commissions. Are there any laws about this? If I am legally required to turn over all of my work, is there a way I can still refuse unless the artist agrees to pay me? 

I’m glad to hear that you are “not interested in arguing his right to leave” as, without a written contract, there is nothing to argue. The artist has the right to leave whenever he wants. As for the issue of the artist’s right to the leads and contacts you have been pursuing on his behalf, even if you had a written agreement, it wouldn’t help you get the outcome you want.

Yes, there are laws that govern this scenario, but be forewarned: you aren’t going to like them.

Legally, anyone who represents someone else (attorneys, realtors, accountants, employees, artist agents and artist managers, etc.) are all considered “agents”. The people they work for are called “principals.” The Law of Agency governs the relationship between agents and principals. While the Law of Agency imposes duties on both agents and principals, for purposes of this discussion, there are four key concepts:

(1) An agent works for the principal and, while the agent can advise the principal, the agent must follow the instructions and directives of the principal.

(2) An agent can never put his or her own interests above that of the principal.

(3) All of the “results and proceeds” of the agent’s work on behalf of the principal belongs to the principal.

(4) Any contractual provision, written or oral, that contravenes rules (1) – (3) is null and void.

In short, when a manager represents an artist, the manager has no proprietary information. In other words, those aren’t your leads and contacts, they are the artist’s. While your leads and contacts may start out as your own, once you contact someone on behalf of an artist, the artist is legally entitled to know anyone you have spoken to on his or her behalf, including the details of such conversation. Moreover, unless there is an agreement to the contrary, the artist is also free to contact anyone directly on his own behalf. While I realize, at the outset, this might seem unfair, bear in mind that the Laws of Agency were designed to protect the agent in that, by complying with such laws, an agent is not liable for the actions of the principal. That’s important if an artist decides to cancel a date or breach a contract you negotiated. It is also important to know that, when entering into a relationship with an artist, the Laws of Agency do not prohibit you from negotiating whatever fees and payment terms you believe will compensation you for your time. You are not limited to seeking commissions on booked dates. Assuming the artist agrees, you can ask for commissions on potential dates as well as confirmed dates, repeat clauses, hourly fees, retainer payments, or any formula or terms that the parties agree to. (Indeed, the time is long overdue to start considering changes to the long standing paradigms and business models between managers and artists that, for many reasons and for all parties, are no longer viable.) However, if all you ask for is commissions based on booked dates, and there is no agreement, written or oral that entitled you to anything else, then there is no right to commissions based on dates “in the works” regardless of how much time and effort you have spent.

Despite a legal requirement to turn all leads and prospective dates over to the artist, you ask whether or not you can nonetheless “refuse unless the artist agrees to pay me.” Sure. You can always just refuse and force the artist either to spend the time and money to sue you, pay you for disclosing the leads and contracts, or sulk away angrily letting you keep what you believe—albeit, incorrectly—is rightfully yours. People refuse to honor legal obligations all the time. In fact, you may yourself be familiar with presenters who cancel dates and refuse to honor full-executed and legally binding engagement contracts claiming such things as “poor ticket sales” or “lack of funding.” Over the years, this blog has been replete with such tales and you can imagine the cries of “unethical” and “unprofessional” that arise from the managers who booked those dates.

You seem to be suggesting that, while you believe in acting ethically and professionally, you are also more than willing to consider acting unethically and unprofessionally if it is to your advantage to do so. I’m all for self-delusion, in fact, its one of my own cherished survival skills, but don’t confuse that with ethics.

_________________________________________________________________

For additional information and resources on this and other GG_logo_for-facebooklegal 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. However, 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 and/or posthumously.

__________________________________________________________________

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!

The Lost Art of Negotiation

Thursday, June 12th, 2014

By Brian Taylor Goldstein, Esq.   

Dear Law and Disorder:

A longtime friend who is also a very successful artist who I greatly respect, asked me to do a project with him. He sent me a contract, but it doesn’t cover things like when and how I get paid. I want to mark up the contract and suggest some language, but I also don’t want to offend him and have him think I am being too difficult to work with and ungrateful for this opportunity. Is there some specific language I can put in the contract that he won’t find offensive, but will still protect me?   

I had a client of mine call me today about a contract she had sent to a promoter who then struck out a specific term that my client needed and sent the contract back to her. Frustrated and desperate to make the deal happen, she wanted me to suggest another way to phrase the term in such a way that the promoter would agree to it. Both you and my client are asking very legitimate questions, but the answers have little to do with contracts and everything to do with business and negotiation skills.

Contracts exist to memorialize an agreement. You can’t memorialize something that doesn’t exist yet. That’s like trying to take a photograph of a place you’ve never been. Before a contract can be properly drafted, much less signed, the parties have to discuss all of the key terms. While you can certainly use a contract to begin the discussion, you can’t avoid the discussion by simply crossing out terms you don’t like and inserting the ones you do. More importantly, there are no magic words, standard terms, or compelling phrases that will take the place of the need to discuss and negotiate.

Too many people in our industry try to use a contract to avoid negotiation—most often for the very reasons you mention: they are too scared of offending the other party, of not getting the terms they need, or of losing a deal or opportunity they really want. However, if you approach a negotiation as a game of deception in which the goal is to use illusive or even deceptively simplistic language or aggressive tactics to cajole the other party into agreeing to something unreasonable or something to your advantage which they would not otherwise agree to (ie: Lawyering 101), then you most certainly should expect the other side to be offended and deserve to lose the deal. On the other hand, if the other party is offended by a legitimate expression of your concerns, sincere questions about a specific term, or proposals that would clarify something you find confusing, then its probably either a deal you don’t want in the first place or a party you don’t want to work with. Just as importantly, if someone doesn’t agree with a term you want, they are not going to agree no matter how you phrase it. Phrasing the same thing in a different way isn’t going to help either. Even if you manage to word it in such a way that they can’t tell what they are agreeing to (what a lot of people refer to as “legalese”), then you’ll have to sue them to enforce it. Instead, you’ll either need to negotiate a compromise or evaluate whether or not the deal is equally advantageous to you without that term.

I have been to many purported lectures on negotiation at arts conferences, only to find that the lecture was really just about how to get presenters to book artists. That’s important, of course, but the real art of negotiation involves far more than discussing date, time and fee. Whether it is a commission, a booking, a production, or a recording, you must discuss and negotiate not just the artistic and logistical elements, but all of those nasty and boring business elements as well—such as liability, insurance, rights, licenses, approvals, exclusivity, taxes, visas, etc. If you are unfamiliar with the necessary business elements of a deal, the time to learn them is before you negotiate, not during the process.

A negotiation does not mean you will get what you want. Rather, a negotiation is a process that allows you to evaluate whether or not you will get what you need. Some opportunities are just that—opportunities—and a good opportunity may require you to accept some risk. But without taking the time to talk and discuss, you won’t have the information you need to access that risk properly. In other words, the negotiation process will save you from disappointment and frustration later on.

As for an answer to your specific question, I would say: Protect you from what? If your “longtime friend who is also a very successful artist who [you] greatly respect” breaches your contract, are you prepared to sue him? I thought not. I suggest you call your friend and ask him when and how you get paid. Don’t ever be scared to ask a legitimate question—especially when dealing with a friend. In the bi-polar cocktail of simultaneous love and resentment we call the arts world, doing business with friends demands an even higher degree of mindful discussion than doing business with strangers.

_________________________________________________________________

For additional information and resources on this and otherGG_logo_for-facebook 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. However, 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 and/or posthumously.

__________________________________________________________________

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!

 

 

The Hogwarts School of Contracting and Wizardry

Thursday, May 15th, 2014

By Brian Taylor Goldstein, Esq.   

Dear Law and Disorder

I had a signed agreement with a promoter to present my artist. The contract provided for two deposits and a final payment on the day of the performance. I worked for over a year with this promoter to put this deal together. Not only did he not pay either of the deposits, but one month before the performance, he called to say he hadn’t sold enough tickets and that it was no longer economically feasible. And he is refusing to pay the money he owes. What am I supposed to do? Sue him? Why should I have to spend the time and money to sue him when we have a signed contract? What’s the point of having a contract in the first place if its not going to protect me?

For many years now I have been climbing the stairs to my secret laboratory trying to create the self-enforcing contract. Upon anyone breaching the terms of such a contract, a magical enforcement beast will materialize, forcing the breaching party into compliance. Sadly, my efforts thus far have proven unsuccessful, resulting only in a few sparks, a bit of ectoplasm still dripping from the ceiling, and a hapless paralegal I may have inadvertently turned into a newt. Until I perfect my spells and enchantments, you’ll have to settle for the fact that contracts are only as valuable as the time, effort, and common sense that goes into them. They do not exist in a vacuum. They do not self-enforce.

The point of a contract is not to get signatures on some form or template littered with extraneous terms that everyone believes are “industry standard”, but no one really reads or understands, in the hopes that it will somehow, in and of itself, stalwartly protect you from the other party cancelling your engagement, refusing to pay, or performing any other courser of unpleasantness. Rather, the point of a contract is the opportunity it creates for you to enter into deals, negotiations, collaborations, engagements, and other relationships knowingly and intelligently. Among other things, it allows you to make sure everyone is on the same page (ie: Do you define net profits the same way I define net profits? Can I cancel if I don’t sell enough tickets?). It allows you to create benchmarks by which you can judge performance and good will (ie: Did the other party pay the deposit on time? Did the check clear?). It allows you to “test the waters” before jumping into a new relationship by first seeing if you and the other party can work together to resolve differences and challenges in the creation of the relationship in the first place.

Sometimes, having a contract can also provide you with leverage. If you can point out that the other party clearly did or didn’t do something which they clearly agreed to do or not do, that pressure alone can often be enough to force compliance. However, if the leverage doesn’t work, you are ultimately left with the sobering fact that the only way to enforce a breached contract is though a lawsuit (or arbitration, if your contract provided for that.) Even then, if you win a lawsuit, you still have to collect the money. A judgment does not automatically guarantee payment. (I’m working on a self-paying judgment, too, as soon as figure out how to change lead into gold.)

The key is not to let the situation get to the enforcement stage in the first place. While some contractual breaches are unavoidable, most are the result of one the parties ignoring warning signs or not taking advantage of the contractual process. For example, a recent client of mine negotiated the terms of an engagement which included the standard items such as dates, time, repertoire, and fees. Everyone agreed. However, when she sent the contract to the presenter, the presenter discovered that the artist expected additional costs to be paid for transportation. My client, on the other hand, discovered that the presenter wanted the artist to obtain insurance to cover all the members of his orchestra. Neither of these topics had been discovered during the initial discussions. Fortunately, both my client and the presenter took the time to read the contract. Even more fortunately, both parties scheduled a time to talk about their respective concerns, worked out compromises, re-drafted the contract, and everything worked out great. Similarly, I was recently negotiation a recording contract on behalf of an artist. When I tried to discuss certain contractual discrepancies and concerns with the other party, rather than engage in solutions, they merely insisted I should trust them and enter into the deal based on “good faith.” That made me trust them even less. My artist really wanted this deal, but I convinced them not to take the risk. In the end, we wound up finding a better deal.

In your case, if your contract provided for two deposits, and the promoter didn’t pay either one, at what point did you not realize that this train was going to jump the tracks? That’s like sending off a contract, not getting a response back from the presenter or manager, having the other party  ignore your phone calls and emails, and the pretending to be shocked to find out the deal is being cancelled…you can’t cancel what was never a deal in the first place. At the time the deadline for the first deposit came and went, that was your time to stop and evaluate whether or not to proceed. If, your professional judgment, it was worth waiting until the second deposit was due, great. However, by the time the second deposit deadline came, that should have been the time to bail. If you decided to rely solely on the contract to protect you, then you were also accepting the fact that if the presenter didn’t pay or cancelled at the last minute, you would have to enforce payment by filing a lawsuit. There are many times that rolling the dice makes legitimate business sense, but you have to accept that for what it is—gambling. Unless you want to incur legal fees and court costs, not to mention lost time, if you gamble and lose, move on.

This is inherently a risky business. Contracts allow you evaluate and, in some instances, minimalize risk, but never eliminate it. Only you can protect you. You and a little pixie dust.

_________________________________________________________________

For additional information and resources on this and otherGG_logo_for-facebook 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. However, 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 and/or posthumously.

__________________________________________________________________

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!

 

What’s The New Normal In Contract Practice?

Thursday, March 20th, 2014

By Brian Taylor Goldstein, Esq.

Dear Law and Disorder:

What’s the new “normal” in reviewing and exchanging contracts? We are receiving an increasing number of contracts that had been issued as PDF files coming back as word files or even revised PDF files which means I have to read every single line of the agreement (along with an original version open beside it) in order to approve what is essentially a new version of the instrument we painstakingly crafted. Isn’t the presenter obligated to sign what we send or at least tell us they are amending our contract? We scratching our heads trying to understand what constitutes the “new normal” in contract practice.

I am the last person to proclaim what is and what is not “normal”. Normal is boring. Normal lacks imagination. Normal is not what the arts are all about. Nonetheless, when it comes to contract practice, many people in our industry continue to look for rigidity in a process that is intended to be quite fluid.

When you send a contract to another party, regardless of how brilliantly or painstakingly crafted the contract may be, you are sending them a “proposal” of the terms for their review. After all, unless you’re working within the structure of a pre-negotiated collective bargaining agreement, negotiating the terms of an engagement is not merely about agreeing on the date, time, and fee.   Everything about the engagement is negotiable as well: insurance, force majeure terms, technical requirements, warranties, licenses, recording rights, approvals, publicity restrictions, exclusivity, cancellation, taxes, visas, etc.

While, as a general rule, a contract should never be presented until both sides have at least agreed to all of the most important terms, there are bound to be additional terms and requirements that were not discussed—and even if they were discussed, chances are the wording or phraseology in the contract may or may not comport with a party’s understanding of what was agreed upon. The contract is the way to present and memorialize all of the additional terms that are important to the engagement, but may not have been clearly discussed at the outset. Many people call all of these additional term “legalese” or “boilerplate” terms, but, remember, nothing is standard…everything is negotiable. Even if you find yourself in the enviable position of being able to say “take it or leave it”, no one is ever obligated to agree to anything. As a result, unless you have somehow managed to discuss and agree upon each and every term ahead of time, the presentation of a contract is often how the negotiation continues, not ends.

Both professional courtesy and common sense would suggest that, before anyone starts making contractual amendments, the party proposing or requesting such changes should bring them to the other party’s attention either by highlighting them or discussing them ahead of time. While marking up a contract with handwritten comments has long been the practice, technology makes it relatively easy to take a PDF, format it into an editable word document, and make changes. However, most word processing programs also allow you to “compare” two documents. So, rather than having to painstakingly read every single line of an agreement, you can just as easily ask your word processing program to compare the old and new versions and it will automatically highlight all of the changes for you.

Personally, because my handwriting often looks like a headless chicken ran through a puddle of ink, I love being able to make changes and edits directly to the text of a contract. However, I then use my word processing program to compare the old version with my version, rename the document, and send it to the other party with all of my proposed changes clearly marked. I also like to add a watermark that says “draft” on each page. Its only when all the terms have been agreed upon by all the parties that is time to remove the watermark, PDF the document, and get everyone to sign it.

________________________________________________________________

For additional information and resources on this and other GG_logo_for-facebooklegal 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. However, 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!

 

US VISA WARNING: Beware of the Vermont Service Center! Abandon All Hope Ye Who File There!

Thursday, March 6th, 2014

By Brian Taylor Goldstein, Esq.   

Dear Law and Disorder

We filed P-1 and P-1S visa petitions at the Vermont Service Center for a group we have been touring regularly for the past 5 years. This would have been their sixth P-1 visa. Last year, we were getting petitions approved in about week. This time, after waiting 4 weeks, we got a notice asking us for a copy of our contract with the group, among other items. We’re the agent and never had to provide this before. They also wanted our contract with the group’s tour manager. We don’t have a contract with the group’s tour manager. We explained that and the P-1S petition got denied. But this same tour manager was approved last year and we supplied the same evidence this time that we did last year. What’s going on?

I wish I knew. After a period of uncharacteristic, but welcome, efficiency and competency for almost a year, the USCIS Vermont Service Center has imploded. Whether they were hit by a radioactive meteor, unearthed a demonic spirit living beneath the mail room, or were attacked by brain-eating zombies (who doubtlessly left disappointed and hungry), we may never know. What we do know is that we have been receiving multiple reports from all sectors of the performing arts reporting major problems with the Vermont Service Center, including significant processing delays, inane RFEs (Requests for Evidence), and even outright denials for O and P artists who have previously been approved for O and P visas.

The League of American Orchestras, in collaboration with the broader performing arts community, is submitting a formal complaint, as is AILA (the American Immigration Lawyers Association). In the meantime, here is a list of some of the most serious problems we have encountered and some suggestions on how to address them:

1. Processing Delays.

As many of you may recall, USCIS entered into a voluntary commitment to improve processing times for artist visas and, as recently as December 2013, regular processing times for O and P visa petitions were averaging 2 weeks or less. For the last year, our clients rarely had to pay the extra $1225 for premium processing. However, as most of you know all too well, the problem with anything “voluntary” is that you can’t force a volunteer to do anything. While the USCIS website continues to list an average timeframe of 14 days for regular processing of O and P visa petitions, the reality is that it is currently taking 30 days or longer. In some instances, VSC has taken over two weeks just to issue a receipt notice.

SOLUTION: Do not rely on the projected processing times listed on the USCIS website! File petitions as far in advance as possible or seriously consider premium processing any petition where the artist needs to arrive in less than 2 months from the date of filing.

2. RFEs Asking For What Seems Obvious.  

For example, orchestras have reported receiving RFEs on petitions filed for internationally known conductors (many of whom have been approved for prior O-1 visas) where USCIS asked for further evidence on how a conductor is critical or plays a lead role in an orchestra. USCIS has also been issuing RFEs asking for an explanation of why an Executive Director provides “essential support” to a group on tour or asking for a list of the duties of a Stage Manager or Lighting Designer.

SOLUTION: We have always recommended that, when it comes to preparing visa petitions, never assume that the USCIS examiner has any familiarity with the performing arts. This seems to be the case now more than ever. Always err on the side of over-explaining everything—What does a Concert Master do? Why is a specific award important? Covent Garden is an opera house, not a plant nursery. Etc. USCIS seems to be particularly focused on petitions for P-1S and O-2 support personal. As such, it is no longer sufficient simply to list the names and jobs of support personnel. Provide a brief biography for each person, along with a short, but specific explanation of their duties and experience working with the O-1 artist or P-1 group.

3. RFEs Asking For Employment Contracts For Support Personnel.

In yet a further attempt to thwart O-2 and P-1S petitions, USCIS has been issuing RFEs asking for evidence of who will be employing each support person. For example, if your petition includes engagement letters or contracts from presenters booking the O-1 artist or P-1 group, USCIS also wants to see the employment terms for each O-2 or P-1S support person.

SOLUTION: Provide either a statement from the O-1 artist or P-1 group explaining who will be paying the fees or salaries of each support person or provide a very basic deal memo or term sheet for each O-2 or P-1S support person outlining the fees they will be receiving and who will be paying them.

4. Unsigned Contracts

USCIS has recently been rejecting blank or unsigned contracts. USCIS wants either a signed engagement contract or written summary of the terms of an engagement.

SOLUTION: Do not send USCIS anything with a signature line on it which is not signed, especially contracts. If you have an unsigned contract, either get it signed or don’t send it. Instead, submit a copy of an email confirming the engagement terms, a written summary of the engagement terms, a letter to or from a venue confirming the engagement terms and signed by the sender, or a deal memo listing all the terms, but with no place for anyone to sign anything.

5. Truncated Classification Periods. 

In the past, USCIS has been willing to approve visa petitions to cover additional time before and after a performance to accommodate rehearsals, extra performances, and unanticipated activities. More recently, however, USCIS has been issuing approval notices only for the specific time reflected in the engagement contracts or confirmations. For example, if your petition asks for a classification period of March 1, 2014 through February 28, 2015, but the performance contracts only reflect performances between March 11, 2014 and February 20, 2015, USCIS is issuing the approval notice only for March 11, 2014 through February 20, 2015.

SOLUTION: Make sure that the contracts and written confirmations you supply in support of your classification period reflect the actual dates you need. For example, if the performance is on March 11, 2014, but the artist or group wants to enter on March 6, 2014, make sure that the contract or written confirmation reflects that the artist is required to enter the US on March 6, 2014.

While the bulk of this madness seems to be coming from the Vermont Service Center, there is every reason to believe that the California Service Center will not be far behind. Until this sorts itself out, file early, provide as much supporting documentation and details as you can, and continue to check www.artistsfromabroad.org as well as our own website for further updates.

__________________________________________________________________

For additional information and resources on this and otherGG_logo_for-facebook 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. However, 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!