1.0 The Parties to the Contract

1.1 UK and US Approaches

Often, the first contact with the producer is from the A&R man rather than from the artist or the artist’s manager. It is usually the record company which pays all the recording costs and, of course, the record company owns the recordings. Invariably, the form of contract is generated by the record company’s business affairs person. The automatic assumption might, therefore, be that the producer will enter into a contract with the record company. However, this is not necessarily so. The American record companies invariably refuse to enter into any contract with a producer; instead they insist that the artist or the artist’s production company enters into the agreement. In this way, the record company shrugs off any responsibility for the producer and neatly side steps any potential contractual difficulties. With luck, the company will even be able to persuade the artist’s lawyer to deal with the paperwork. Fortunately, in the majority of cases, the UK record companies have not yet abdicated responsibility for producers in this way and are still prepared to contract with them direct.

1.2 Direct Accounting

The producer will always prefer to contract with the record company rather than the artist because this will improve his chances of being paid. This is not to suggest any dishonesty on the part of the artist; it is simply a question of cash flow and financial stability. Also, a right of audit against an artist is more or less worthless; a right of audit needs to bring with it the right to inspect the record company’s books and records of account. The problem is partially solved if the producer’s agreement is with the artist (or some intermediary production company) but this is coupled with suitable direct accounting arrangements. The producer should not be satisfied with a simple letter of direction from the artist to the record company requesting the company to pay the producer’s royalties and to deduct them from any royalties payable to the artist. If the producer is to be properly protected there needs in effect to be a separate contract between the producer and the record company. The best solution is a tripartite agreement in the form of an irrevocable letter of instruction from the artist to the company countersigned by the producer but in which some “consideration” is shown to move from the producer to the record company in order to create a legally binding commitment. The consideration might be the nominal sum of one pound.

1.3 Standard Forms

In the case of many well established producers a form of contract will be agreed in relation to a particular project with each record company for whom the producer often undertakes work so that (as a short cut) each time the producer undertakes work for the company in question the same form of contract will be used as a template for the new deal (although the principal terms of this will vary case by case).