We are starting Band-Law.com as a source of information and publications to make it easier for musicians to conduct their business.  Most musicians have legal issues that should be addressed.  Many are unaware of the legal risks associated with their businesses.  We hope to select articles that inform musicians and bands about some sources of legal vulnerability.  We will also suggest further sources of information on legal and business issues affecting bands and musicians.

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Is You Band A Ticking Time Bomb of Liability?

Being in a band is fun.  Most people who play do it because they have to; it is part of their soul.  What musicians need to know is that the band business is full of potential legal liability.  Very few people see it that way, but they should.  A band usually travels, it owns heavy electricity based gear and lights; much of which is very expensive.  The band relies on as many people as possible coming too one place to see them if they want to succeed.  A lot of the places that bands hang out serve alcohol and people are there to let loose, party,and have a good time.

As an active musician and a lawyer, I see both sides of this. The fun, rewarding parts as well as the potentials for legal disaster if your band does not take the proper steps.  These potential disaster scenarios are present regardless of whether you are a small startup band playing in the bottom tier clubs or parties or have gained some popularity and are playing larger venues or the big stage.

There are many disaster scenarios. Legal training teaches you to think in these terms.  I can’t help it. It is as much a part of me as the guitar licks on Dark Side of the Moon.  Here is just one such disaster scenario that I think everyone who has ever played in a band will realize is not at all far-fetched. There are many others, but here is one.

Disaster Scenario

You have worked hard to put your band together.  Over the past 4 years, you have had several changes in lineup.  First you replaced the drummer that was late on every fill and had the personality of Eyore from Winnie the Poo.  Then you vocalists’ wife was jealous and you ended up replacing him.  The lead guitarist had a huge ego and was messing up the vibe.  This story of building a band are common.  We have all been there.

Now, finally, you have a cookin’ band.  Your summer is looking great: all festival dates, even a couple of big backup dates.  The band is cookin’.  You have hit your stride.  Success is coming, you can feel it.

One night, you are playing one of the old clubs that you started out in, more or less for nostalgia but certainly not for the money.  A couple of the members decide to make a party of it. These are old friends there and they keep buying drinks for the band.  By the end of the night, a couple of the members are pretty lit up.

After the gig, Tom, the lead singer gets in his car to drive to an after bar party. On the way there he swerves into the coming lane and runs head on into another vehicle.

Toms has no insurance.  Tom has no assets. His only income comes from the band.  The other car involved files a lawsuit.  Who are they going to sue?

If you have not organized your band through an official corporate or LLC entity, every member in the band is likely to be sued.  The law is likely to deem you to be a partnership.  Every partner is jointly and severally liable for all damages caused by other partners.  That means everyone is potentially responsible for the full extent of the damages.

Now let’s say the drummer, let’s call him Jim, has a great job.  He has amassed a ton of money in the bank and investments.  He owns a million dollar home where the band rehearses in his plush rehearsal room.  He owns multiple businesses.  He is set.

The lawsuit comes up and finds that the singer was responsible for causing the accident.  100 % responsible. Each member of the band is joined as a party because there was no legal entity formed for the band.  The band members filed a motion to dismiss early on in the lawsuit claiming that the singer was not acting within the scope of the business of the band.  The court rules that he was acting within the scope of band business at the time of the accident.  He was leaving a band show.

Damages come down at $5,000,000.  Each partner is liable for the full $5,000,000 under joint and several liability principles.  There is no insurance.  Everyone except Jim is poor.  Jim is worth $10,000,000.  Who do you suppose is going to pay the damages?  Jim, who drank water all night.

The next thing that happens is that Jim gets summons to appear at a supplemental collections hearing where the other side asks him questions, under penalty of perjury, about what he owns, what he is worth, where his assets are etc.

The next thing you know, Jim’s house is attached.  His wages are garnished.  Someone comes and gets his boat.  All sorts of things start happening in Jim’s life. All because he played in the band where the singer got drunk and swerved in the oncoming lane on the way home from the gig.

A lot of bands are pretty apathetic about their business structure.  They go to gigs, collect cash and split it up at the end of the night. They give very little thought of legal liability or protection of assets.

So the lesson here is, if you are in a band do not assume that you are immune from possible liability just because you have not yet “made it” or you are just doing it on the side. The band business is filled with possible legal issues, regardless of the size or success of the band.  You need to take the appropriate legal steps to protect yourself and your assets from exposure to these risks.

We offer products that cover the solution that would have saved Jim the $5,000,000 that he had to shell out.  Our product is also stocked full of other legal steps that your band should take to protect its work, not get screwed by club owners, agents and managers, among many other topics.  It is also filled with all of the legal forms and other items that you need to appropriately structure your band.

What To Do If A Venue Tries to Rengotiate The Price After the Show?

It is a fairly common occurance to get to the end of the performance and have a venue attempt to rengotiate the price.  Oftentimes you will hear the excuse that not enough people showed up for the show, that the till was a little short, that the band didn’t do anything to promote the show, or that the club owner will book the band for a bg show in the future if they will just “cut him a little slack tonight.”

If you are faced with this occurance, you really need to make a judgement call about the slubowner’s sincerity.  It might be a good venue for you and t could pay off to work with the clubowner.  Most of the time however, this is a bad sign and you can assume that you are not going to want to work with the club in the future.  So what do you do?

First, it helps if you have a written contract.  A written contract will provide you with some leverage to insist upon payment in full.  You can argue that you have a written contract and you intend to sue for the money if you don’t get paid in full.  Most of the lawsuits would occur in local courts often referred to as “small claims courts” or the equivelent in your state.  You should familiarize yourself with basic procedures in those court.  If you talk like you know the process and intend to do something about not being paid, the clubowner will oftentimes back down and pay you the full amount that you agreed.

If you do not have a written contract stating the price and other terms you are on weaker ground.  You can still bring a small claims action, but you will need to prove the contract and the amount that you were to be paid.  Without a written document, the venue can always raise ambiguity and say that there was not an agreement for that price or that the price was conditioned on attendance, the door, or some other obligation on your part.  This could muddy the waters and would make your chance of recovery less likely.

If you get to the point where the club owner is obviously not going to back down or if you think it is possible that the clubowner will “create a scene,” you can always walk away and file a small claims action.  If you want to file a claim, the question is where the suit must be filed.  Normally, it will have to be filed in the county where the club is located.  If you are not from the area, this puts you at a big disadvantage.  This is another place where a contract can help you.  In your form contract, you can have the venue agree that any lawsuts regarding the contract are to be brought in the place where you reside.  This makes the clubowner have to travel to defend the contract.  Many times, this will result in the club owner not showing up and the court entering a default judgement in your favor.

Another alternative is to negotiate for a s much as you can geto ut of the clubowner.  If you do this, you will want to make certain that the amount that you accept is not a compromise or settlement of the entire amount that you are owed.  At this point, you will most likely want to be paid in cash rather than a check.  This is a double-edged sword.  If you accept a check, you can note on the check that the amount is not payment in full.  At a minimum, you want to be certain that the clubowner does not note “payment in full” on the check.  If you accept a check, before you cash it, make a photocopy.  This will help avoid the club owner placing payment in full language on the check after it clears the bank.

If you accept cash, it is best to enter a brief written agreement with the club that specifies that the amount accepted is not considered payment in full.  This keeps your option open to sue for the shortage.  However, it may be difficult to get the club owner to sign an agreement to this affect.  Just be certain that you do not sign a receipt that implies in any way that the amount you accepted is payment in full.

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Always Get It In Writing and Know What You Are Signing

The biggest mistake that many people in the music industry make is to do things informally and not enter written agreements.  Whether you are a band booking a show, a manager or agent booking on behalf of a band, a producer, a studio, or any other player in the music industry, it always pays to get your agreements in writing.

There are several reasons to place your agreements in writing, but the most predominant include:

(1) memorializing the terms of your relationship.  Over time memories and expectations change.  It is best to have the basic obligations of the parties set in stone from the beginning.  If things change over time, the basic agreement can be amended to accommodate the changed relationship, but the starting point should be the basic agreement that you entered from the start.

(2) enforcing the contract in court.  It will be much easier to prove the terms of a contract and to get a court to uphold the agreement if it is in writing.  Oral contracts can be proved, but they require testimony and often result in ambiguities, distorted by the passage of time or a soured relationship, concerning what obligations were originally intended.

(3) avoiding lawsuits.  If an agreement is in writing and clearly lays out the obligations of the parties, it is much less likely that litigation will ever occur between the parties because the recipericol obligations are much more clear.  Each paty has a better idea of what obligations it has and when it has breached its obligation.  It makes performance much more likely and lawsuits much less likely of you enter a writtne contract.

Contracts can be very complex or they can be relatively simple.  The more detail a contract contains, the better the understanding of the parties concerning their relative obligations.  At the same time, not everyone has a big budget that permits them to hire an attorney to prepare a custon contract to address each circumstance.  If this is an issue, it is much better to have a simple contract containing your basic understandings than to have no contract at all.

There are basic requirements that all contracts must meet in order to be legally enforceable.  The obligations of each party must be described.  For example, in an agreement for a public musical performance, the musician should agree to provide the performance at the relevant time and place and the sponsor or venue should agree to compensate the musician.  Although more detail may be better for describing the specific obligations of each party, spelling out the basic obligations of both parties is enough to create an enforceable contract.

Before you enter an agreement be certain that you understand the terms and the obligations of the parties.  If you are using a form, be certain that you read the document and make any changes that you find unacceptable or that do not apply to your situation.  If you use a form agreement without reading and understanding the terms you might find that the you have unexpected obligations or that the contract does not accurately address your intended relationship.

Booked For A Live Performance?  Get It In Writing

There are many honest club owners out there booking bands and who stand behind their obligations.  The last thing that a club owner wants is the reputation that it “stiffs” the bands that it books.  This reputation makes it very difficult to book good entertainment once word gets around that the club has not honored its obligations. Nevertheless, most musicians sooner or later will have a club owner refuse to pay or want to renegotiate at the end of the performance.  This is happening now at a much higher frequency because of the slow economy and financial pressures on many club owners. There is no absolutely sure way to totally protect yourself against a club stiffing you or shortchanging you at the end of the night, unless of course you get paid in advance.  However, one step that you can take to mitigate the chance of being stiffed is to enter a written agreement prior to the show. A contract between a musician and a club can be fairly simple as long as it sets forth all of the basic agreements between the parties such as payment, times of performance and the identity of the parties to the contract.  If your band has other items that it considers important, it is also prudent to place them in the contract.  At a minimum, placing these items in the contract will flush out any false assumptions that oyu may have about the engagement, your obligations and the obligations of the club. Some items that you may want to consider include: (1) the length and frequency of breaks, (2) the number and duration of sets, (3) the size and dimensions of the minimum performance areas, (4) the minimum sound system requirements if the venue is providing sound, (5) the lighting that is provided, (6) what occurs in the event of cancellation by either party, and (7) what happens if the engagement is outdoors and weather becomes a problem.  This is just a partial listing of items you should consider.  What is important is that you think through the engagement and what you expect and place these expectations in a written agreement to be executed by both parties. A contract will not totally prevent you from non-payment issues.  A venue can always decide to breach the contract and not pay you or attempt to renegotiate at the end of the night.  However, in my experience, having a written agreement is the single biggest thing that you can do to prevent this situation from occurring.

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Should My Band Be A Corporation?

Most bands never get to the point of even considering the legal structure under which they operate.  They just get together,  start rehearsing and then start booking gigs together after deciding on a name.  Generally, by default, this makes them a general partnership.  There are very few legal requirements to become a general partnership.  Partnership structure simply requires entering into a formal or informal agreement to enter into a business for profit.

It is recommended that partnership members enter into an agreement defining their respective rights and responsibilities.  However, a written agreement is not legally required.  Most states will require you to file a fictitious name certificate if you are doing business under a band name.  You may need to file or record this certificate depending on the requirements of your state.  You will also need to file a form SS-4 with the IRS in order to get a federal tax number.  The bank will require you to have a federal tax number to open a bank account.

There are some major flaws with doing business as a partnership.  Generally, every partner is jointly and severally liabile for all liabilities of the partnership.  This means that each individual is responsible for the financial consequences of the acts of all other partners taken within the scope of the partnership’s business.  Each individual partner is potentially liable for the entire liability.

To illustrate this, lets say that your guitar player jumps off the stage and slams into someone causing major injury.  Each member of the partnership could be sued for the full amount of the damages that are caused.  Now lets say that the guitar player has no other job and no assets.  On the other hand, the keyboard player, who did nothing except sit on his piano bench, could be just as financially liable for the damage.  The person who is injured sues and gets a judgment for $500,000.  The keyboard player is a wealthy dentist.  Who do you suppose is going to pay the money?

The solution to this problem is to operate your band through some sort of legal entity.  Generally your options will be a corporation, an S corporation, or a limited liability company.  The requirements for each will be discussed in other articles and will be slightly different depending upon your state.

Possible Legal Entity Choices For Bands and Musical Groups

In some previous posts I discuss some of the potential disaster scenarios when you fail to use a legal entity to operate your band.  The reasons to operate as a legal entity are many.  The choices of legal entities that are available will be a matter of state law.

One possible choice is a corporation. A corporation is formed by executing and filing articles of incorporation in the office of the Secretary of State in your state.  Normally you will form the corporation in the state where the corporation has its “primary place of business.”

The second choice will generally be an LLC which is likewise formed by filing articles of organization in the office of the Secretary of State.

There are significant differences between the corporation and limited liability company structures which you should discuss with your legal or tax professional.  There are major differences in the ways that these entities are taxed.

Generally, a corporation is subject to tax on its earnings and profits.  The shareholders are taxed again when dividends are distributed by the corporation.  This is commonly referred to as the “double taxation” on corporate profits.  Subject to certain restrictions, Shareholders in a corporation may choose to be treated as a Subchapter S Corporation which can mitigate the affects of double taxation by passing through all gains and losses of the corporation to the individual owners of the LLC.

For a start-up band, the major disincentive for forming a legal entity is the costs involved.  There will be filing fees and franchise tax fees.  Proper corporate records must be maintained and the entity must be renewed, usually on an annual basis.  These formalities must be closely observed or you will lose any benefit of the entity structure.

In the end however, if you are gigging on any kind of regular basis you should consider forming a legal entity.

Copyright Basics For Musicians

Securing copyright protection is very easy to do and is perhaps one of the most misunderstood areas in the music business.  If the band is creating original works, there is really no reason not to claim a copyright and to take steps to protect the copyright.  Copyright registration is available for the group’s musical compositions and for sound recordings.

There are many aspects of music copyright law that are misunderstood by musicians.  First, you should understand that you do not have to register your copyright with the copyright office for it to be protected under the copyright laws.

Copyright protection arises automatically when the work is created, and is fixed in any tangible medium of expression.  Copyright does not attach when you pick up a guitar and play your new song.  Copyright does not protect the idea.  But if you turn a recorder on an records it that fixes it in a tangible medium of expression and provides you with copyright protection.  Likewise, if you write down the lyrics, the lyrics are fixed in a tangible medium of expression and copyright protection attaches to the lyrics.  The bottom line is when your original work is placed in a material medium from which the work can be perceived, either directly or by use og a machine or device (i.e. a CD player or computer), the work obtains copyright protection.

Fixation in a tangible medium of expression provides you with basic protection.  However, there are good reasons to register your work with the copyright office.

Registration of a copyright is a legal formality intended to make a public record of the copyright. The copyright law provides several incentives and benefits to register including:

• Establishing a public record asserting your claim of copyright to your work.

• Registration is normally required before you can sue someone for infringement.

• Timely registration permits you to obtain statutory damages and attorney fees if you sue for infringement of your copyright.  In order to receive these benefits you must generally file your copyright within three months after first publication of your work.  For this reason, it is generally recommended that you register your copyright before you make available to the public in any way.

The copyright acts remedies of attorney fees and statutory damages are huge benefits.  First, if you have retained your right to obtain attorney fees it will be much easier to find a lawyer to take on your case if someone infringes upon your copyright.    If you do register your copyrights and prove infringement at trial, you don’ t have to prove that you were actually damaged. Rather, you can receive the statutory award provided for in copyright act per work infringed.  Additionally, if you prevail the losing side has to pay your attorneys fees.

Obtaining the protection offered by registering your copyright provides you with a substantial amount of leverage to help avoid someone from infringing on your work.  If a party knows that you have not secured your copyright, they also know that you will need to prove your damages and will have to pay an attorney out of your own pocket, whether you win your case or not.

The bottom line is that it pays to be certain to register the copyright to your original creations before you make them publicly available.

Selecting A Band Name | Practical and Trademark Issues

Selecting an appropriate name for your band is one of the first steps that you will take when putting a band together.  Everyone who has ever been in a band knows about the session that inevitably takes place where names are thrown around.  We all have our variations on the same process.  Most bands try to come up with a name that feels right and identifies who the band is.  However, very few bands take approriate attention to potential legal issues associated with name selection.

Most people know enough not to take a known existing band name.  However, very few take any further steps to be certain that their name does not conflict on the business use of the chosen name by another band or another business that could create confusion.  Additionally, few bands actually take steps to secure the rights to the name that they select.

There are several issues that you need to consider when choosing a name for your band.

Name Availability

You should make certain that your name is available and can be used without infringing on someone else’s rights.  You can do some searching online to see if there are other bands or businesses using your chosen name.  You can also check your state incorporation office to see if any businesses have registered the name in your state.

Your band name, even if available in your state, should not violate the federal trademark rights of any other party. It is strongly suggested, that you perform a trademark search to be certain that your name will not infringe on someone else’s trademark rights. Checking the Patent and Trademark Office database is a good place to start.  However, that will only provide you with anyone who has registered a trademark.  Trademark rights arise upon use and not from registration.  So it will be necessary to do a complete common law trademark search to be certain that no other party is using the name in a way that would conflict with your use of the name.

If you consider your band name or any other name used in connection with your band to be a valuable asset, you should take further steps to protect the name from use by others such as obtaining state or federal trademark protection if available.

Band Performance Agreement Contract Package

We have assembled the primary documents that are needed by most smaller bands who generally book shows at venues, have a website developed, hire sound companies etc. This package of agreement should cover the most basic things that you need other than formation of a corporation or an LLC or an agreement between the band members.

This package includes a handful of basic agreements that most startup bands will require. This package is primarily for small bands who are playing in clubs but are not to the point of recording an original CD or shopping for a record deal. It covers:

1. Band Performance Agreement – Contract to be used when booking band at a venue for a live performance.
2. Sound and Lighting Contractor – Contract to be used when band hires sound and lighting for a live performance at a venue
3. Photograph Assignment of Rights – Contract to be used when a third party photographs the band to assign all right to the photo to the band.
4. General Copyright Assignment – This is a general form of copyright assignment that can be used in connection with all kinds of works that the band has third parties create such as logos, poster designs etc. Intended to assign the copyright to the work from the creator to the band.
5. Web Site Design Agreement – Most bands will want to get a web site and many will hire someone to do the design work. This contract can be used with your web site developer.

The contents are provided in Rich Text Format and should be compatible with most word-processing programs. The forms are also provided in Adobe PDF format.

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