1. What is the fundamental principle of contract law?
freedom of contract
2. What are the five points of a valid contract?
unambiguous, consideration, legal capacity (age, metal ability, and authority), no illegal acts, mutual agreement.
3. What is the Statute of Frauds?
where the court will not enforce an oral agreement, it must be written.

What are the six types of contracts that fall under the Statute of Frauds?

cannot be performed within one year, concerning an interest in realestate, in consideration of marriage, consuming the debt of another person, the sale of goods in the amount over 500 dollars, assignment of copyright.
5. What is the Mailbox Rule?
Acceptance is effective once its been mailed. the offerer cannot withdraw there offer.
6. What is the Mirror Image Rule?
Acceptance must be exact with the offer term for term. (if you don’t follow the rules its called a counter offer)

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Why is it important to read and understand the definitions given in a contract?

So you can understand the deal.
8. Define “Rider.”
an attachment to an agreement for a live performer/performance.

9. Define “Warranty.”
A promise that something is guaranteed.

10. What is “Indemnity?”
A hold harmless, your holding a person free from any financial risk or liability.
11. An indemnity clause commonly follows which clause?
12. Give the general definition of “Condition.”
a future and uncertain event in which the existence or extent of an obligation or liability depends.

13. What is a Most Favored Nations clause?
gives you a good of a deal as somebody else.
14. Give the general definition of “Option.”
A privilege that one party may or may not chose to exercise.
15. What is the difference between a Material Breach and an Immaterial Breach?
If its an Immaterial breach the non reaching party still has to perform there part.

A material breach does not have to perform.

16. Why would you include a Liquidated Damages clause in a contract? How must it be limited?
It provides a specific amount so it encourages the other party to perform. It must be limited because it has to be a reasonable estimate of damages.
1. What does “term” refer to, and what are the two common forms this takes?
The length or duration of the contract.

Flat term, initial/option term.

2. In a recording agreement, which party has the right to exercise the option?
The Record Label.

3. What is California Labor Code Section 2855? What effect does it have on options?
personal contracts cannot be enforce for more than 7 years. Options can be effected to.

4. Give the definition of Option with a Condition Precedent.
Something must happen before the company can exercise the option. (a trigger)
5. What is an Option to Make Up the Difference?
When the label can elect to make up the album sales. make up the number to meet the condition precedent.

6. What is an Option Exercise Date?
the very last possible date notice must be given to excercise the option.
7. What may happen if the recording agreement calls for an Advance With the Exercise of the Option, and the label fails to send a check with the notice of option?
Option is not in effect.

8. If the agreement calls for Automatic Exercise of an option, under what circumstance would the label have to give notice?
If they elect not to exercise the option
9. What is a “recording commitment”?
the obligation to record and deliver.

What are the terms to watch out for in the recording commitment?

Commercially satisfactory, chosen by company, similar style.
11. When a minimum recording commitment is contained in a contract, what should the artist make sure is included in order to prevent overcall masters?
negotiate for a maximum commitment

And what are overcall masters anyway?

and excess recording, the master the record label need over and under the minimum.
13. List some of the elements that may be required for delivery.
session tapes, licenses, artwork, credits, always I and i’s.

What will happen to the artist if he fails to deliver? How is this different in an open ended agreement?

suspension (no money), opened ended agreement terms can be extended.
15. What is form I-9?
a US immigration form – it certifies immigrants to work in the US.
16. For what reasons might an artist be suspended?
non delivery,inability to perform, any other breach real or perceived, acts by the label, act of god,
17. What happens to an artist when he is suspended?
kept form recording, no income for that time, could lead to destruction of their career.
18. Define “royalties.

money due to the artist from the sale of their recordings.
19. Many factors may cause the royalty rate to vary.

List them.

types of recording sold, how its sold, where its sold, price, and to who its sold.

What is the formula for royalty computation?

sales price x royalty rate – deductions
21. What is royalty acceleration?
the more you sell the higher your royalty rate.
22. Why do record companies hold reserves?
setup to account for returns.
23. What are freebies? Why should an artist allow freebies?
discounted records / or free. Its a good promotion tool.

24. What is a container charge? Who pays for it?
Artist has to pay (even on digital downloads).
25. Define cross-collateralization.
when the label is using income from different records to recoup on another one.

What things are considered recoupable expenses? Which is the largest cost?

All advances, All costs of recordings. Cost of the recording is the most expensive
27. Explain an All-In agreement.
A direct agreement between the Artist and production company.

(need an inducement letter from the artist)

28. Within the context of recording agreements, what does “accounting” mean? What provision should always be included in order to protect the artist?
Audit Rights
29. Define “coupling.” How can an artist limit this?
when a master is grouped with other masters and is packaged. Concent or approval.

30. Define “joint recording.”
two or more artists that perform on 1 master.
31. What things are usually found in a Grant of Rights provision? Who are the rights being granted to?
right of publicity, joint recording, coupling, foreign sales, merchandising, indemnity, executIon and deliver of documents

Why would an artist want to limit an indemnity clause?

The Label
33. What effect does a rerecording restriction have on an artist?
Will not re record for anyone else same same song. for a certain period of time.

What is a morals clause? How should it be limited to protect the artist?

Gives the label the right to terminate the clause (naughty clause.) Use more definite language avoiding words attending too.

What is a master purchase agreement?

an agreement to purchase the masters
36. What are the two common provisions dealing with the ownership of musical compositions?
(co-publishing) & (controlled composition clause)
37. If an artist enters a copublishing deal with the record company, which compositions should be affected from the artist’s point of view? From the label’s?
Artist – () Label – looks to get all of it (prior and during)
38. In the context of compositions, when a label wants to negotiate a rate, what is the deal it is trying to get?
look for 75% of stat rate, limit it to 10 tracks, and gonna pay 75% of .091 cents.
1. Aside from producing and recording masters, what are the common duties of the producer?
deliver masters, prepare and meet budget requirements, comply with union regulations, complete proper I9 form, etc.

Should the producer be liable for recording costs? If so, how much?

If they are over 110% of the budget.
3. In regard to publicity and advertising, what word should be included for the producer’s benefit when granting rights to the label? Why?
“Shall”. To provide the producer promotion

What is an option agreement?

development deal – a trial period giving the label the right to shop the artist around.
2. What is the average recording commitment associated with an option agreement?
2 to 4 masters

What two things are negotiated when referring to the double negotiation involved in option agreements?

Negotiating the terms for the option agreement and recording agreement.
1. What 4 different methods of Compensation can be used to pay the artist for a live performance?
gate %, Flat Fee, Guaranteed fee, guaranteed fee plus a percentage of revenues.

What will the venue want under a Merchandise Rider?

15% – 40% of gross sales
3. What is usually covered in Clippings and Posters Riders? Why would the artist want this?
for the artist to be able to look at all the press regarding the show. it is the only way to be able to tell whether the promoter did a good job promoting the event.

Why would the artist want the venue owner to sign an Insurance Rider?

So they won’t be responsible for the injury of someone.
5. What is a Cancellation Rider?
Artist still gets paid even though the gig is canceled.