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How Recording Contracts Work

Sign on the Dotted Line

Let's imagine that a miracle has happened and you have a big-label recording contract in your hands. You want to sign it because you and your band mates have been working your butts off to get to this. But some of the stuff in it sounds -- well, pretty scary.

The American Heritage dictionary defines a contract as

An agreement between two or more parties, especially one that is written and enforceable by law.

The "enforceable by law" part is important. Once you sign a contract, you are bound by it. So, if you don't like the contract, don't sign it. That doesn't mean things end here. You may want to consider hiring a lawyer.

In many cases, when someone is about to sign a contract, he or she hires a lawyer to interpret the contract and (in some cases) to help negotiate terms. Since you're looking at a music contract, an entertainment lawyer would be best suited to help with its interpretation. An entertainment lawyer must be familiar with various agreements and contracts related to the entertainment industry, including recording contracts.

Whether you are a solo artist or you are a member of a band, you generally have two problems if you are an unknown who is signing your first recording contract:

  • Because you have never seen a recording contract before, you don't know what is "normal," and you do not know how the contract will affect you long-term. Your lack of experience and knowledge in this situation makes a lawyer even more important.
  • Even if you have a lawyer, you may have little or no leverage. If you try to negotiate, the record company can easily say, "Take it or leave it." If you decide not to agree with the terms and conditions, you have to wonder when and even if the next contract offer will come.

The goal of this article is to walk you through the typical features that any recording contract will normally have. It certainly does not replace a lawyer, but it does help you to educate yourself about the big issues and problems found in most big-label recording contracts today. The following sections will focus on each of the major topics that are covered in any big record deal so that you'll have a good idea of what to expect when your contract arrives.