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LCN Final Review


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What is the fundamental Principal of Contract law?
What are the five points of a valid contract?
Unambiguous No illegal Acts Consideration Capacity Mutual Agreement
What is statue of Frauds?
Certain contracts that must be written to be enforceable
What are the six types of contracts that fall under the Statue of Frauds?
Anything over $500 Anything taking over a year Copyright real State Prenuptial and Marriage Assuming someone else's debt
What is the Mailbox Rule?
If its in the mail, its final.
What is the mirror Image Rule?
If one side changes the contract it's a counter offer. The acceptance must be the mirror image of the offer
Why is it important to read and understand the definitions given in a contract?
They are the Key to understanding the deal
Define "rider"
Attachment to a live performance agreement
Define "warranty"
A guarantee
What is "indemnity"
A duty to make good any loss, damage or liability incurred by another
An indemnity clause commonly follows which clause?
Give the general definition of "condition"
If.., Then.. A future and future and uncertain event upon which an obligation or liability occur
What is the difference between a material breach and an Immaterial Breach?
Material= a massive breach. Non breaching party is excused from the contract Immaterial= is a small breach
Why would you include a liquidate damages clause in a contract? How mus it be limited?
So you can be paid immediately. Limited by Reasonable estimation of damages and must not act as a punishment or be excessive
What does "term" refer to. and what are the two common forms this takes?
Length of time, initial and option
In a recording agreement, which party has the right to exercise the option?
The Label
What is California Labor Code Section 2855? what effect does it have on options?
Can't enforce a contract over 7 years. limits number of options
Give the definition of option with a condition precedent
something must happen first before an option may be taken
What is an option to make up the difference?
Option may credit artist royalty account to make up difference to satisfy condition
What is an option exercise date?
last day an option can be activated. notice must be given by this date
What may happen if the recording agreement calls for an advance with the exercise of the option, and the label fail to send a check with the notice of option?
The option is not validated
If the agreement calls for automatic exercise of an option, under what circumstance would the label have to give notice?
To not take the option
What is a "recording commitment"?
Artist obligation to record and deliver a certain number of masters to the label
What are the terms to watch out for in th the recording commitment?
Commercially satisfactory, at the company's discretion and technically satisfactory
When a minimum recording commitment is contained in a contract, what should the artist make sure is included in order to prevent overcall masters?
What are overcall masters?
Masters that the label demands over the minimum
List some of the elements that may be required for delivery
clearance, Licenses, artwork, liner notes, I-9, proof of compliance to union regulation. etc
What will happen to the artist if he fails to deliver? How is this different in an open ended agreement?
Suspension, Open ended just extends the time of the contract
What is form I-9?
Allows people to work in the U.S.
For what reason might an artist be suspended?
Failure to deliver, inability to perform, failure to actively pursue a career
Define "royalties"
Percentage due to the artist for the sale of album
Many factors may cause the royalty rate to vary. List them
Where it will be sold How will it be sold When will it be sold Accelerations Who is it sold to
What is the formula for royalty computation?
Sales price * rate- deductions= royalty
What is royalty acceleration?
When a certain number of records are soled- royalty goes up
Why do record companies hold reserves?
to account for returns and not overpay artist
What are freebies? why should an artist allow freebies?
Free records used for promotional purposes
What is a container charge? who pays for it?
Cost of packaging, artist pays for it
Define cross-collaterization
one album pays for the other
What things are considered recoupable expenses? which is the largest cost?
Advances, recording costs, video, tour support, promotion, and any money spent on behalf of the artist; the largest is the recording cost
Explain an All-in agreement
Production company gets an artist, and a producer, records music, sells music to a label, label pays company royalties to slip them up amongst all parties involved
Within the context of recording agreements, what does "accounting" mean? what provision should always be included in order to protect the artist?
When artist gets paid, artist should be able to audit the labels accounting
Define "coupling" how can an artist limit this?
Masters from different artists on one CD compilation; require consent or approval clause
Define "joint recording"
2 or more artist on one master
What things are usually found n a grant of rights provisions? who are the tights being granted to?
Coupling, foreign sales, right of publicity, right of merchandise; the label
Why would an artist want to limit an indemnity clause?
So they are not liable for a third party
What effect does a rerecording restriction have n an artist?
Prevents artist from rerecording a song originally recorded under contract, usually 5 years
What is a morals clause? how should it be limited to protect the artist?
says if artist behaves in an immoral way, label may terminate artist; use definitive language, be specific
If an artist enters a co-publishing deal with the record company, which compositions should be affected from the artist's point of view? from the label's?
Only ones under contract; all of them
In the context of compositions, when a label wants to negotiate a rate, what is the deal it is trying to get?
75% of the stat rate on a maximum of 10 tracks per album and without regard to the length of the song
Aside from producing and recording masters, what are the common duties of the producer?
I-9, Budget, Liaison between artist and label, liner notes, clearance and licensing, comply with union regulations
Should the producer be liable for recording costs? if so, how much?
Yes, only if it exceeds 110% of budget
In regards to publicity and advertising, what word should be included for the producer's benefit when granting rights to the label? why?
Shall, so it requires the label to use the producer's name so he gets promoted
What in an option agreement?
Development deal- trial contract to see if they want to sign full contrct
What is the average recording commitment associated with an option agreement?
What two thing are negotiated when referring to the double negotiation involved in option agreements
A development deal and a recording agreement Term of the option, number of recording commitments
What 4 different methods of compensation can be used to pay the artist for a live performance?
% of the gate Flat Fee Guarantee fee or % of the gate whichever is higher Guarantee fee plus % of revenues
What is usually covered in clippings and posters riders? why would the artist want this?
Artist gets a copy of all of it, copies of reviews written after show; to make sure he is being romoted by the venue
Why would the artist want the venue owner to sing an insurance rider?
So they aren't liable
What is a cancellation rider?
Get paid if the gig gets canceled
What is not a characteristic of a consent decree?
Required to pay settlement to injured consumers
What is market power?
Both the ability to affect market price and indication of monopoly
What is not an intentional tort?
In the video clip watched during class, Ari Gold was a successful negotiator because he?
Knew his BATNA Revealed his BATNA Had bargaining power
What may be done to reaffirm the relationship after negotiation?
Speak Kindly Promptly address grievances Check in

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