Free Essay Example. Overview of the Contract

The contract provides a set of licensing agreements in the music industry, between an artist and the music industry. However, it acts as a standard agreement because every member of both parties has not fully certified it. Therefore, the contract terms are subject to change during the formulation of the final report, "Long Form."

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The engagement of the contract depicts that the music industry needs artists’ services to perform master recordings and production of such records. The artist complies with the terms and accepts to offer services to the music industry, such as recording and performance, but within the territory of the standard agreement terms.

The license period stated in the contract shall begin on the date of agreement terms and the first recording of the master, and end on either 30 June or 31 December as depicted by the guidelines of clauses 10 and 20 in the first ten years immediately after the release of the UK’s commitment album. Besides, there shall be a six-month nonexclusive time in the license period, which will allow for the sell-off of all the physical stocks of the produced records that remain at the end of the license period.

However, the music industry maintains that they will abide by the terms during the sell-off period. For instance, copies of the records or videos will not be manufactured, that exceed the expected demands. As a result, the terms used in selling the files during the license period will be used in selling the remaining items after the license period. Also, the music industry confirms that no master for sales will be offered in the form of digital downloads during the sell-off duration.

The standard agreement terms shall also operate within the territory of the universe and world interchangeably for the entire license period. The artist and industry agree to the commitments as follows: (1) the music industry is only entitled to a single album with an opportunity to deliver not more than three similar additional masters; (2) the industry must also not withhold or delay any new mixes or tracks, because they are similarly required to match with the production of singles and the promotional records; (3) The music industry is obligated to deliver all masters that comprise to the commitment album in a period of not later than seven days from the date of the agreement; (4) The artist must be liable to negotiate in good faith with the industry concerning the exclusive licensing for the release of the second album.

The music industry expects to pay a fully recoupable advance of £20,000, which the artist should pay its 50% after the complete execution of the agreement and complete the balance after the successful delivery of the last master comprising the first album. Secondly, the company shall also fund the artist with an additional of £20,000 which is also payable at the end of the agreement. The funds will solely cater for the estimated budgets and not any other additional recording and video production costs.

The advance shall be 50% recoupable by the artist from all the gained royalties and monies after the end of agreed terms. Besides, any other form of advance, which will include all recording costs, shall be recoupable from the royalties gained by the artist. The company and industry shall jointly agree to mutually carter for all matters about the recording procedures, in the exception of sole expenses such as the artist's decision to use producers, mixers, and remixers, before the presentation of the master to the industry for recordings.

Upon the submission of the master, the industry will ensure that it is mixed sufficiently with the first-class requirements, edited and equalized to the digital standards of tape, disc, and files that can hardly be lost. Besides, the master must be technically satisfactory which can lead to the manufacture of high-quality recordings and videos, which meets all the customer's demands. The music industry will have an additional thirty days to approve or reject the presented master, and the results will be communicated back to the artist following the policies and clauses 6.1 and 6.2. Meanwhile, suppose the master is accepted, but additional masters such as B-sides and promotional tracks are needed. The industry would carter for such costs to effectively deliver the master that includes all requirements for the commitment album. However, the expenses must be recoupable by the artists from all royalties by the artist.

Royalties are discussed in paragraph (7) of the contract agreements. The music industry agreed to pay the artist-specific royalty rates for the master records and videos sold. Although the prices include all the third-party royalties such as mixers, remixers, and producers, it shall be upon the artist to cater for their costs. This is possible because paragraph 6.2 stated that the artist must provide all the information about all the third-party partners involved. For instance, 17% of royalty will be directed to the major territories such as the USA and Canada, the Republic of Ireland, Japan, Germany, and France. No royalties would be granted for the first five thousand units sold in all of the major territories.

Paragraph (8) in the contract discusses the measures of accounting, and all applicable royalties must be calculated due 30th June and 31st December for the net sales. The industry would also be in charge of retaining any reserves against the returns or credits. In such cases, a preserved reserve shall be liquidated in two accounting periods, depending on the dates of creation. The industry shall also be liable to make any payments to the artist, although that must be exclusive of any value-added tax. It is the role of an artist to present a subject receipt in the form of an invoice to the industry, to claim for such VAT.

Paragraph 9 of the contract outlines the mechanical royalties, which defines all the rates imposed on the music industry by the internal UK government and those by the external licenses outside the UK territory. The section also provides the guidelines and provisions by the standard production. On the number 10 of contract agreement, the industry commits that it would be obliged to release the album within 120 days after the end of 90 days prior notice, failure to which the artist will have the authority to terminate the license period by providing a termination notice of the commitment album to the UK music industry. Although the industry has the licensing agreements to compose short- and long-term video performances using the artists' recordings, the artist has the full authority to approve the video director (Paragraph. 11) of his/her choice. The artist must also recouple any video promotions made by the company, either by the use of monies, audiovisual income, or royalties.

The contract terms do not allow for artworks by third-parties without the consent of the artists; thus, any presentation of such masters will be disapproved. However, the industry has the full authority to manipulate artist’s names and other biographical materials during the artist’s recording and for institutional advertising purposes (Paragraph.12). Furthermore, the company shall be in full control of the official website for making recordings and performances, specifically during the license period. However, the artist will pay any website-related costs in the form of recoupable supplementary website revenues.

The artist will pay all the costs related to promotional activities and credit, but the industry would offer back the credit by ensuring that a standard logo and attribute appears in all of the commitment albums. All the same, the agreement is in a way that the company shall not be compelled for any failures to use that credit in an album, but rather the company would update the credit upon the receipt of such complaint of failure.

The ownership rights and re-recording restriction agreement acts states that the artist would be granted full authority in control of the license period and sell-off period, to avoid any manipulations by the industry without consent. With all these terms of agreement listed, the artist submits a warrant that he/she is satisfied with the licenses concerning the royalties, ownership rights, and artwork guidelines. The contract will be governed by the laws of England, the UK.

The industry also approved in the contract that; it shall not perform particular activities without approval from the artist. Such acts include: releasing any record of the commitment master in the form of a "premium" that facilitates private sales, lower the prices for the records and videos released by the commitment masters out of the artist's knowledge and illegally granting a license to third parties to access the commitment albums. The approval licenses provided in paragraph 19.2 also stated that the company must consult with the artist representative before: re-sequencing or editing any masters on the commitment album, it explores any records that embody masters by using special or sub-standard packaging and releasing any tape, disc as a single or mix in the UK.

Finally, the license agreement is subject to termination when: (1) court orders for the completion; (2) the commitment album is not released as per the provided dates (120 days); (3) the industry fails to rectify its breaches that violate the terms; (4) a petition is presented suggesting for a wind up of the licensing agreement terms.