Article on Performance Agreements

Performance Agreements
by Joy R. Butler, Esq.

When performing live for compensation, it's a good idea to have a written contract. You may encounter some owners or promoters in smaller venues who refuse to sign a written contract. In these situations, the good news is that a contract for a live performance does not need to be in writing in order to be valid. Of course, for obvious reasons, it's often more difficult to prove the terms of a verbal agreement. So, if the person hiring you refuses to sign a formal written contract, try to get something in writing - whether it's a letter of confirmation, a fax or even an e-mail - showing the date and time of the performance and the compensation you will be paid.

Performance agreements frequently come in two parts. The first part lists the most general information for the performance such as the names of the band and hiring person, the place, date, time and the payment terms. You'll find an example of a basic contract at the end of this article.

The second part consists of one or more riders or attachments providing additional requirements and terms. Riders can be very detailed and run up to 20 to 30 or more pages. They may address a number of issues such as specifications for the sound system and light equipment, procedures for ticket sales, promotional efforts, billing, background music, and food, transportation and accommodations provided for the performer. Generally, very detailed riders are reserved for established musicians who are performing at large venues and have ample bargaining power.

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Here are some things you should consider when negotiating a Performance Agreement:

HOW WILL YOU BE PAID

Compensation for live performances is normally structured in one of four ways:

payment of a set fee
a percentage of ticket sales
the greater of a percentage of ticket sales or a set fee (the set fee is a guarantee on the minimum you'll receive for the performance)
a set fee plus a percentage of ticket sales.

When determining what percentage of ticket sales to request or accept, you'll want to know at what price tickets are to be sold, how many people are expected to attend the performance, and the number of free tickets the promoter or club owner intends to give away. You'll also need to know whether you're getting a percentage of the gross ticket sales or the net ticket sales. If you're receiving a portion of the net ticket sales, you should ask what deductions will be taken before you get your cut. Preferably, the deductions will be listed in the contract.

WHO'S HIRING YOU

You may be hired by a promoter or directly by the venue. A promoter is the person or company who organizes the event, hires you to play, rents the hall and does the advertising. When a promoter who doesn't own the venue is involved, fee arrangements may be a little more complicated because you may be splitting the percentage of ticket sales with the promoter and with the venue.

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WHO SIGNS THE CONTRACT FOR THE MUSICIAN

If you're a solo performer, this question is very easy to answer. You'll sign the contract yourself. If you're part of a band, unless the band has taken steps to organize itself as a corporation, or as some other business form, your band is a general partnership and all the band members are partners of the general partnership. While partners can have a formal or written agreement, one is not required for a partnership to exist. Being a partnership means that one member may sign a contract for the band, and all the band members are obligated to honor that contract. Your band may want to appoint one member as the business partner with authority to sign contracts and accept payment for live performances for deposit into the band's bank account.

As you become more established, you may use the services of a personal manager or talent agent to book your live performances. Managers often ask for a power of attorney to sign contracts on your behalf. You may wish to limit the manager's authority to sign contracts on your behalf to those contracts of a short duration, standard union agreements, and contracts for which the manager has received your verbal consent. For more information on managers and management agreements, you may want to look at the articles, Music Agents and Personal Manager Contract Negotiation Guide, which you'll find on The Musician's Resource Page.

MERCHANDISING RIGHTS

Sales of CDs, tapes and other wares can be a very lucrative portion of your touring and live performances. The sample contract below provides that all merchandising income will go to the musician. However, some clubs may charge a portion of the revenue you receive from selling your merchandise - up to 40 percent.

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CANCELLATION

Will you be compensated in the event the club cancels the live performance? The sample contract below does obligate the club to pay you a certain fee upon cancellation. However, cancellation penalties may be available only for those bands with some bargaining power. So if you're in a situation where you want to play at the club more than the club wants you, you may not be able to get this cancellation clause in your contract.

INSURANCE

Sometimes patrons are injured and property is damaged during a live performance - as the result of an accident, a fight or some other unfortunate occurrence. When that happens, patrons sometimes sue venues, promoters, and performers. A well-run venue will have insurance to cover the costs related to such injuries or damages, and in many cases, will be willing to indemnify you. Indemnification by the venue doesn't mean you can't be sued by an injured patron. However, it does mean that the venue is taking responsibility for that lawsuit, and will reimburse you for any money you must spend in defending yourself or in paying money damages to the injured patron.

WHERE DO UNIONS FIT IN

The American Federation of Musicians, or AFM, is a music union that represents musicians. The primary benefit to union membership is the increase in negotiating power. AFM negotiates collective bargaining agreements with clubs, hotels and other forums where live performances are held. Clubs that have signed an AFM Agreement must pay a minimum rate for live musical performances. AFM-affiliated clubs must also make certain pension, health and welfare payments on behalf of the musicians they employ. AFM can also assist its members in collecting unpaid fees for live performances.

The terms and rates specified in AFM's collective bargainining agreement are simply minimum requirements, and AFM members are free to negotiate higher pay rates and more attractive working conditions. Although AFM is a national organization, it has independent local chapters. As a result, the pay scales and benefits can vary depending on location.

AFM Clubs agree to hire only those musicians who are AFM members, so union membership makes you eligible to work at these clubs. The downside to union membership is that you are not supposed to work for any non-union employers. Most small clubs are not affiliated with AFM. As a result, your union membership might require you to turn down jobs you would otherwise take. For more information on AFM membership, visit the AFM website.

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Here's an example of a basic Performance Agreement:

THIS PERFORMANCE AGREEMENT is made and entered into as of _________________, 20__, by and between __________________________, whose business address is _________________________ ("Purchaser") and the musical group or performer __________________________ ("Musician"), whose business address is _____________________________________. In consideration of the mutual covenants herein contained and, intending to be legally bound hereby, the Purchaser and Musician agree as follows:

1) Engagement. The Purchaser hereby engages Musician to render a musical performance (the "Performance"), and Musician hereby agrees to render such Performance under the terms and conditions specified herein.

2) Individuals Comprising Musician. Musician consists of the following individuals:

Musician's obligation to perform hereunder is subject to the unavailability of Musician as a result of sickness, accidents, acts of God, and other reasons beyond Musician's control.

3) Location of Performance. The Performance will take place at the following location:

Name: _________________________________________________
Street Address: ___________________________________________
City/State/Zip: ____________________________________________

4) Date and Time of Performance. The date of the Performance is ______________, 20___. The venue will be available for set-up on (date) ______________ at (time) ________. The Musician will play ____ sets as follows:

Set	Start Time	Ending Time
1
2
3

5) Payment. In full consideration for all services rendered by Musician at the Performance, Purchaser agrees to make the following payment in U.S. funds to Musician (select one):

___	Set Fee. A set fee of ______________________ Dollars ($______).
___	Percentage of Ticket Sales. An amount equal to ___ percent (__ %) of the (select one) __ gross __ net ticket sales.
___	Percentage of Ticket Sales With Guarantee. The greater of (a) ___________________ Dollars ($_____), or (b) an amount equal to ___ percent (__%) of the (select one) __ gross __ net ticket sales.
___	Set Fee plus Percentage of Ticket Sales. A fee of ______________________ Dollars ($______), plus an amount equal to ____ percent (__ %) of the (select one) __ gross __ net ticket sales.
___	Other. (specify) _____________________________________.

a) Deposit. Purchaser will pay ___________________ Dollars ($ _____) of the payment to Musician as a deposit by __________________, 20___. If Purchaser does not pay Musician the deposit, Musician will have the option of canceling this Performance Agreement with no further liability hereunder to Purchaser.

b) Payment of Balance. After the last set on the date of the Performance, Purchaser will pay Musician the remaining balance of the payment in cash or by money order or certified check made payable to ______________________________.

c) Definitions. For the purposes of this Performance Agreement, the following definitions apply: Gross ticket sales means the sum of any and all monies paid for admission to the Performance. Net ticket sales means gross ticket sales minus the actual cost to Purchaser of the following expenses: _________________________________________.

6) Merchandise. At Musician's option, Musician may offer CDs, tapes and other items for sale at the Performance. Musician will retain all proceeds from such sales. To facilitate Musician's merchandising, Purchaser will provide a table and chairs set up in an easily accessible and visible area of the venue.

7) Cancellation. In the event Purchaser cancels the Performance less than _____ weeks prior to the scheduled date, Purchaser will pay Musician a sum equal to (select one) __ ___________________ Dollars ($ ____) __ ___ percent of the set fee specified in paragraph 5. Upon payment of the cancellation fee, Purchaser will have no further liability to Musician hereunder.

8) No Taping of Performance. Purchaser will not, nor will Purchaser allow others to tape, record, reproduce, or transmit in or from the premises in any manner or by any means, the Performance without the written approval of Musician.

9) Miscellaneous. This Performance Agreement and the attached rider(s), if any, set forth the entire agreement between the parties, and may not be amended except in a writing signed by both parties. This Performance Agreement will be governed by and construed in accordance with the laws of the State of __________, without regard to the principles of conflicts of law. In any action or proceeding involving a dispute between the Purchaser and the Musician arising out of this Performance Agreement, the prevailing party will be entitled to receive from the losing party reasonable attorney's fees.

Musician and Purchaser have each caused this Performance Agreement to be signed by its duly authorized representative.

PURCHASER	MUSICIAN
_______________________________	_______________________________
(Name of Purchaser)	(Name of Musician)
_______________________________	_______________________________
(Signature of Authorized Representative)	(Signature of Authorized Representative)
_______________________________	_______________________________
(Printed Name and Title)	(Printed Name and Title)

Joy R. Butler, Esq., is a principal and the general counsel of Sashay Communications, LLC, a publishing and media production company. She is the author of The Musician's Guide Through the Legal Jungle (TM), a 3-hour audio program that simplifies music law by presenting it as a conversation in which an "attorney" guides a "musician" through the maze of legal and business issues in the industry. Prior to joining Sashay, Joy was in private practice where she provided legal counsel to a variety of entertainment and media clients. Joy holds a B.A. from Harvard College and a law degree from Harvard Law School.

DISCLAIMER
This article is offered as an educational and informational tool only, and should not be relied on as legal advice. Applicability of the legal principles discussed may differ substantially in individual situations. The sample contract is for illustrative purposes only, and has not been verified for compliance with the law of any particular state. If you have a specific legal problem or concern, you should consult an attorney.