For years, 28 year old Sally Singer has been trying to make it as a musician. She has played bars from Maine to California. She has had some songs she wrote and recorded played on college radio. She was a first round contestant on American Idol, but was cut before making it to Hollywood. She is getting ready to give up the business when a friend arranges an audition for Sally with Andy Alan Dime, of ADD Records, a twenty year old record label that has had a few hits, but never broken into the big time.
Sally’s audition seems to go well. Andy called Sally up a week later and gave her the good news. “Sally, baby,” Any said, “I think you’ve got “IT” ADD is going to make you a big star. Who are your manager and lawyer?
Sally tells Andy she has never had a manager or lawyer before. “That’s a good thing,” says Andy, “they just waste time and money. Trust me baby, I will be the one looking out for you.”
Sally can’t believe her good fortune. Andy hands her a 15 page contract and says, “Just sign it baby. It is a standard contract. We advance the money for the recordings, we distribute, you get the first $7,000 gross income and then we split everything down the middle .” Andy hands Sally a shiny gold pen. Sally hesitates. “What’s the matter, baby?” Andy asks. “Well, honestly, I am broke,” says Sally, “Is it possible to get any money up front?’
Andy pulls out his checkbook. “I like you baby, we are going to do great things. Sign right now and I will give you a $5,000 advance.” That was all Sally needed to hear. She didn’t even read the contract, she just signed it on the spot.
Sally recorded her first CD for ADD, “Out of My Cave.” It got some alternative rock air play, but never caught on with Itunes. After six months, total sales were only $9,500. Sally wasn’t thrilled, but still, she could use the money. She wrote to ADD and asked for her $7,000 in first royalties plus 50% of the remaining $2,500 for a total of $8,250. ADD’s accounting department responded by sending jer a bill:
INVOICE
Recording costs
Studio time $ 3,700
Engineers $ 2,700
Producer advance $ 5000
Total Recording costs $ 11,400
Promotion costs $ 3,700
Total Costs $15,100
Less credit for sales $8,250
TOTAL BALANCE DUE $ 6,850
The hottest movie this summer is the block buster super hero film “The White Knight Ascends.” Sally goes to see it and is shocked to find that “Out of My Cave” is played several times in the movie. It appears ADD licensed Sally’s song to the film for $100,000. When Sally calls ADD to ask about it, she is told that all the licensing money belongs to ADD.
Sally comes to you asking for help. She brings her contract with her. By now she has tried to read it, but cannot make heads or tails of it. In looking it over, you see that some of the relevant provisions are as follows:
“17 C – Singer agrees to pay, or to reimburse ADD, for all recording costs including, without limitation, all costs related to the use of the studio, hiring of engineers and producers, and all promotion costs.”
“41 F – Singer grants ADD all rights to the songs written by artist and the Master recordings of such songs as are included on any recordings produced pursuant to this agreement. Without limitation, this shall include the right to license such masters and underlying songs for use in motion pictures. And Singer hereby waives any claim to the income from such license”
What can Sally do (with your help, of course)? Analyze the strengths and weaknesses of her case.
What can Sally do (with your help, of course)? Analyze the strengths and weaknesses of her case.