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Get it in Writing – Band Agreements

November 20, 2011

I am often asked by young bands whether they should enter into an agreement among themselves. Whilst my legal training says “Yes”, I am also conscious that this may open a “can of worms”.

Recently my client, the charismatic lead singer of a well known act, no longer wanted to be part of the band, citing irreconcilable differences between the members. Instead, he wanted to leave, find himself a new backing band, continue to use the same band name, play the same music and perform an almost identical “live show”. Now there’s a can of worms!

He believed that as a founding member, lead singer and principle lyricist, he should be entitled to do so. The band had a strong following, was making good money touring, and was about to release their debut album. Naturally, the remaining members of the band were mortified and wanted to continue business as usual, and simply find themselves a new lead singer. Thus began a long and spiteful dispute.

What many people don’t realise is that without an agreement in writing, then the Partnership Act applies. Partnerships are defined as “persons carrying on a business in common with a view of profit”. “Business” is defined as “every trade or occupation”. So if your band is more than a “hobby”, it will be considered a partnership under the law. As my client did not have an agreement in writing we were forced to rely on the Act.

So what were the key provisions of the Act that applied and how could a Band Agreement have helped resolve the issues?

Firstly, the Act assumes that all partners are equal. This surprises many bands and may be contrary to a band’s intention. The Act also states that subject to any agreement to the contrary, a partnership can be dissolved by any partner providing notice to the other partners of his/her intention to do so. My client’s actions and emails clearly conveyed his intention to dissolve the partnership. Once this was done, the issue became who had best right to the band’s name, and who should have the right to perform their songs?

Aside from physical assets such as music equipment, PAs, etc., a band’s primary assets are its name and its songs. Generally speaking, the Act provides that upon dissolution of a partnership, each partner has an equal right in all assets (including the band name and song catalogue) and no one partner has a greater right to the assets than the others.

The Act also provides that any partner can apply to have the partnership wound up with assets sold-off and the funds distributed amongst the partners (ie equally). In my client’s case we needed to strike a deal as to who would get what under threat of such a court application. Much time and money was spent on ascertaining the “value” of the “business”. The matter was eventually settled by way of pay-out ie my client agreed to forgo any rights to the name and ownership of the songs (subject to him continuing to receive his cut of publishing royalties) in return for a fee.

There are often clauses in a Band Partnership Agreement that cover band members who want to leave. Such a clause would have spared my client much angst. “Leaving member clauses” usually provide that appropriate notice must be given by leaving members. They also provide that if a member leaves the Band, the remaining members may continue to perform under the Band’s name. It may also provide that a leaving member is entitled to a pay-out of sorts, for ongoing royalties and how such amounts should be calculated. This can be vital when a band has had success and there are ongoing royalties to be claimed.

A Band Agreement forces a band to consider a host of issues such as:

• how many partners are there;
• the roles and obligations of each partner;
• song ownership splits;
• division of income from different sources;
• decision making processes;
• ownership of the band name;
• leaving member processes; and
• admitting new members.

Given the gravity of writing a Band Agreement, some bands will put it in the “too hard basket”. Whilst no bands are alike, I would advise all bands to consider entering into a Band Agreement.

Feel free to contact our office to further discuss:

The views expressed in this article are the views of the author and not necessarily the views of Melting Pot.

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