Recording Contract

A recording contract is a written legal document which specifies all the aspects of the agreement between a recording artist or group and its record label. The contract is presented by the record label and is signed by the artist. It stipulates a number of features of the agreement, such as the royalties, the duration of the contract, the time limit to complete an album, monitory features like signing bonus and many other terms and conditions.

By signing a contract with a record label, the label becomes the rightful owner of the songs produced by the artist. The label will own the copyright of the recordings for a fixed period of time which is stated in the contract. The artist under the contract is usually only allowed to record for this particular label, but for any other reason if the artist wanted to appear on some other artists’ records as a guest appearance, then the artists’ record label would have to mention the name of the label of the guest artist as a mark of courtesy.

Once the contract is signed, the artists are given a fixed amount of time in which they have to complete an album. The record label will then record the artist’s songs or albums in the studio usually and then produce multiple copies of it. They are also responsible for promoting and selling the newly recorded album or song. A huge amount of money is invested by the record label in this process. The artist may or may not have to return this amount based on what is specified in the contract. The label has the right to accept or reject the album and if rejected, the artist will have to create a new album within a given time frame. The label has the right to shelve the album too and never bring it to the market even if it is accepted.

The royalty clause, mentioned in the contract, is the main source of money that the artist makes. Royalty is a certain percentage of money that the artist is paid for every album sold and is one of the most important clauses in the contract. For instance, if the royalty is 10% and one album is sold for £10, then the artist will be paid £1 for every album sold. This money is in addition to the signing amount that the artist receives when the contract is signed.

Sometimes, instead of earning money on the basis of royalty, the record company and the artists split the net profit by a percentage decided between the two parties. It can be 50/50, 60/40, etc. The record label has the authority to terminate the contract with the artist under certain circumstances like if the artist does not comply with the terms of the contract; if the label isn’t able to make the projected profits with the artist’s records; the label faces bankruptcy, etc.

Sometimes the contracts may contain misleading information which might seem reasonable at first sight but when looked over properly turn out to be dubious. Be very thorough and clear with the contract before you put your name on the dotted line because once you sign the contract, you’ll be bound to it. You could appoint an entertainment lawyer who can assist you with interpreting and explaining the various clauses of the contract. If you are not satisfied with the terms, try to negotiate first but if that doesn’t help then don’t sign it.