“What to Look For in Contracts”
By Glenn T. Litwak
INTRODUCTION
For those who will be employed doing audio work in TV, Film and the Video game industry, there are a number of specific things to look for and understand in your contracts. Everyone would like to avoid disputes and litigation and the time, expense and stress it entails. This article specifies 21 points to help you learn what to look for.
GET CONTRACTS IN WRITING
Although most oral contracts are enforceable, their existence is more difficult to prove in court. Written contracts help avoid misunderstandings and force the parties to clarify potential disagreements. Some of the problems associated with alleged oral agreements were addressed in the Frank Dux v. Jean-Claude Van Damme trial which aired on the Court T.V. channel. Mr. Dux claimed he had an oral agreement with Van Damme whereby Dux would receive 2.5% of the gross profits from the film "The Quest." Van Damme denied the existence and terms of the alleged oral agreement. The jury's verdict was in Van Damme's favor.
HAVE AN ARBITRATION CLAUSE
Include an arbitration clause in most contracts. Usually, if the case is arbitrated, the attorney's fees will be reduced, and you will get a quicker resolution.
HAVE AN ATTORNEY'S FEES PROVISION
Have your contract provide that the prevailing party in any dispute will be entitled to recover their reasonable attorney's fees and costs. This type of provision will usually be beneficial if a dispute arises.
INDEMNITY CLAUSE
Make sure you have a clause indemnifying you for breach of any warranties by the other party to the contract.
VENUE
Try to make sure that the venue is in California if you live and work in California.
CHOICE OF LAW
Make sure California law applies if you reside and work in California.
INVESTIGATE PARTIES
Check out the people you are dealing with. For instance, if you are considering working for an independent filmmaker or video game creator, research their reputation.
HAVE AN ATTORNEY REVIEW YOUR CONTRACT
Use an experienced attorney to review and negotiate your contract.
MAKE SURE YOU HAVE A CLEAR CHAIN OF TITLE TO ALL INTELLECTUAL PROPERTY
Make sure you clear any and all rights, including music rights.
DOCUMENT AS MUCH AS POSSIBLE
For instance, if you are working for a weekend for someone and there will be no written contract, at least try to confirm your agreement regarding what you will do and what you will be paid in an email.
KEEP COPIES
Keep copies of all pertinent agreements, letters, notes, phone messages, etc. This will help your attorney in the event of litigation.
BE AWARE OF THE STATUTE OF LIMITATIONS
The statute of limitations (in California) for a written contract is four years; for an oral contract, two years; for fraud, three years; and for personal injury, two years. If you fail to file your lawsuit within the required time, you will lose the right to recover for your damages.
WARRANTIES AND REPRESENTATIONS
Try to limit your own warranties and representations. For instance, add the phrase "to the best of my knowledge and ability after a reasonable inquiry" to any warranties you agree to.
UNDERSTAND THE CONTRACT
Make sure you understand all terms and conditions of the contract. Do not let yourself be forced to sign a contract before you have had a chance to read and understand it. And remember, most contracts are negotiable. Make sure your contracts specify exactly what you will be doing, when and what you will be paid, and when. Of course, it is best to get as much money up front as possible.
COPYRIGHTS
Registration with the Copyright Office is not necessary to be entitled to a copyright, but additional remedies are available if you register your copyright (such as attorney's fees and statutory damages). When you are creating original music in the entertainment industry, document who will be the owner of the copyright to your music.
AVOID GIVING ANYONE THE RIGHT TO INJUNCTIVE RELIEF
For instance, an injunction could stop the production or distribution of a film.
EMPLOYEE PROBLEMS
Employee problems may include harassment, disability, wrongful termination, etc. If you are an employer, have written procedures for employees and follow them. Do not tolerate discrimination or harassment of employees.
COMPLIANCE WITH UNION RULES
Make sure you comply with all Union rules.
AVOID CLAIMS OF COPYRIGHT INFRINGEMENT
An idea is not copyrightable. However, the expression of an idea is copyrightable. Be careful about using samples, and make sure all music (the masters and the composition) that you use are cleared.
ALWAYS BE OPEN TO SETTLEMENT
A settlement will cut off your attorney's fees and you will have a definite resolution of the dispute.
OBTAIN A WRITTEN CONTRACT WITH YOUR LAWYER
Have a retainer agreement with your lawyer.
