Exclusive Artist Recording Agreement - Getting Started in the Music Business

To Continue | Back to Section Outline | Back to Table of Contents

 


Written by Mary Ermel, UT-Austin law student under the guidance of Professor David S. Sokolow.

I. INTRODUCTORY PARAGRAPH

Your contract (often referred to as "Exclusive Artist Recording Agreement") will most likely begin with a short paragraph stating that today an agreement is being made between the record label ("The Company") and you ("The Artist"), and that by signing this agreement you are promising to provide your "exclusive" services to the record company throughout the "territory" for the "term" specified.(e.1)

A. EXCLUSIVITY & EXCEPTIONS

1. EXCLUSIVITY
"Exclusive" means that you will only record for the record label during the term of the contract.(e.2) In addition, your contract may also contain a "re-recording restriction," which forbids you from recording any of the selections you recorded for the label for any other label for two or more years after the term of the contract has ended.(e.3) This re-recording restriction will usually last for two years following the term of this contract or five years from the date of delivery of the album to the record label, whichever is longer.(e.4)

2. EXCEPTIONS
There are exceptions to exclusivity, and you should try to get them included in your contract. The two most important exceptions are those that allow you to perform on another artist's album as a sideman and those that allow your work to be included as part of a motion picture soundtrack distributed by another record company.(e.5)

B. TERRITORY

"Territory" refers to the geographic area covered by the contract, and it almost always means worldwide.(e.6)

C. TERM

"Term" refers to the length of time you will be bound by the contract. The term will rarely be stated simply as a set number of years; it is a bit more complex than that. In fact, one of the first main sections of the contract will be dedicated to defining what the "term" means.

II. TERM AND PRODUCT

A. TERM

One of the first sections of your contract will define the "term" (the period of time covered by the contract), and explain what you are required to do for the record label during the term. In most contracts the term is divided into an "initial period" and "option periods." The duration of these periods, and thus the duration of the contract term, is measured by completion of the "minimum recording commitment."(e.7)

1. MINIMUM RECORDING COMMITMENT
"Minimum Recording Commitment" refers to the amount of material you must record in order to fulfill your contractual obligations to the label.(e.8) The amount of material required is usually between ten to twelve "sides."(e.9) A "side" is usually a single composition lasting approximately 2 minutes.(e.10) This material must fulfill the requirements set out by the record label. Common requirements are explained in the "Master Quality & Delivery" section under "Product" below.

2. INITIAL PERIOD
The "initial period" refers to the period of time during which you record your first (or first and second, depending on what the contract says) album for the record label. It begins when you sign the contract and usually lasts between eight and twelve months after the release or delivery of an album recorded during that contract period.(e.11) The contract usually states that the initial period will end eight months after the release of the first (or second) album, or if the record label decides not to release the album, the initial period will end twelve months after you deliver the album.(e.12)

3. OPTION PERIODS
Once you and the record label have done everything that is required by the contract during the initial period, the label will be able to decide if it wants you to continue recording for it. If the record label wants to keep you it will exercise its "option" to keep you under contract, and an "option period" will begin. Usually the contract will specify that the record label has the option of requiring you to record from five to seven additional albums after the initial period, which means six to nine albums total.(e.13) (You would be required to record a total of six albums if the initial period called for one album and the record company exercised its option to have you record five additional albums. Similarly, you would be required record a total of nine albums if the initial period called for two albums and the record company exercised its option to have you record seven additional albums.) Like the initial period, each option period will usually last for eight months after the record label releases your album, or twelve months after you deliver the album if the label decides not to release it. In order to minimize the amount of uncertainty about whether or not the record label will keep you for the next option period, it is a good idea to try to negotiate for a clause stating that, if the first album sells a certain number of copies, the record label must exercise its option for the next album.(e.14) However, it is also important to realize that having numerous option periods is not necessarily desirable. If your album is not successful, you will not make any money, but if you are a success and the record label opts to keep you for the maximum number of option periods, you will probably be getting paid less than you are worth by the time they have ended.(e.15) Also, it is important to understand that each option period can last for up to two and a half years, taking into account the amount of time it takes the label to release each album.(e.16) In order to cut down on the time that you are bound to the label, you can negotiate to have a "drop dead" date inserted into the contract. This would be a date on which the option period ends if the record label has not released the album.(e.17) Alternately, you could try to negotiate a provision stating that none of the option periods will last longer than a set period of time, such as one year.(e.18)

B. PRODUCT

In order to fulfill your requirements under your contract you need to fully understand the type of product the record company requires you to create). These expectations are often explained in a section called "Master Quality & Delivery." This section includes the important concepts of "material selected or approved by the record company," and "technically" versus "commercially satisfactory."

1. MASTER QUALITY & DELIVERY

a. MASTER QUALITY
In recording contracts, the term "master" means the final version from which all other copies will be made.(e.19) "Master Quality" refers to the standards the master recording must meet before the label deems it acceptable for commercial distribution.(e.20) It is important to understand exactly what the record label expects in terms of master quality because the level of technical sophistication required by the label will directly translate into how much of your advance or recording fund you will be required to spend on recording costs.(e.21)

b. DELIVERY
As explained in the "Term" section, the end of the initial and option periods can be based on "delivery" of an album. It is thus important to understand what is meant by this word. "Delivery" usually means that you have given to the record label a master recording that meets all of the quality requirements spelled out in the contract, as well as any number of other documents such as consents, approvals, licenses, and permissions required for the release of the album.(e.22)

2. MATERIAL SELECTED OR APPROVED BY THE RECORD COMPANY

The amount of input that you have regarding the selection of songs on the album will vary from contract to contract. It is often the case, however, that new artists are asked to allow the record label (via independent producers or Artists and Repertoire [A&R] people) to select, or at least give final approval to, the compositions to be included on the album.(e.23)

3. TECHNICALLY AND/OR COMMERCIALLY SATISFACTORY

The record label will want to assure itself that the album you create for it will be capable of generating substantial sales. Thus, the label will probably require that the quality of the master recordings you deliver meet certain standards of satisfaction before it releases the album.

a. TECHNICALLY SATISFACTORY
A "technically satisfactory" recording is one that meets the engineering standards for sound quality set by the member companies of the Recording Industry Association of America ("RIAA").(e.24) This is an objective standard and is usually met quite easily. Many artists strive to have technical satisfaction as the only standard that must be met in their contracts, as this standard deals solely with the technical aspects of the recording, not its artistic merit.(e.25)

b. COMMERCIALLY SATISFACTORY
The "commercially satisfactory" requirement is more difficult to define because it is a subjective standard. It means that, in the opinion of the record label, the recordings you create can be successfully marketed and sold.(e.26) If the record label claims that you have not met this standard, it can be difficult to fight this claim in court, because the label will ordinarily have to prove only that it made its evaluation of commercial satisfaction in good faith.(e.27)

III. ADVANCES & CROSS-COLLATERALIZATION

A. ADVANCES

An advance is the amount of money provided to you by the record company which you are to use for any number of expenses, including living expenses, recording costs, video production, and tour support.(e.28) While advance amounts vary among different record companies and artists, an example amount would be $500,000, with $200,000 going to the artist for production of the album and $300,000 set aside for promotion.(e.29) The entire amount of the advance will be "recouped" (i.e., paid back) to the record label out of the royalty money you receive. (Royalties are explained in the next section "Royalties & Deductions.") If something weird happens and your album is not released or does not sell, you do not have to pay back the advance. However, we want to assume that your album will be released and sell well, so it is very important to understand a common method of repayment called "cross- collateralization."

B. CROSS-COLLATERALIZATION

"Cross-Collateralization" (sometimes referred to as "offsets") is the process by which the monetary obligations you accumulate over the entire course of your contract term, including advances you have not paid back, will be repaid out of profits made from future albums or publishing.(e.30) For instance, let's say that you receive a $100,000 advance for your first album and a $100,000 advance for your second album as well. You now owe the record label $200,000. You earn $10,000 in royalties from the first album and $120,000 in royalties from the second album.(e.31) Although it may seem as though you have made money on the second album ($120,000 in royalties is $20,000 greater than the $100,000 advance, after all), if your two albums are cross-collateralized (which they probably will be), the royalties from both albums are lumped together for a total of $130,000. The $200,000 in advances will be repaid out of this sum. Thus, you still owe the record label $70,000, which will carry over to your next album, and will be added to your next advance.(e.32) In other words, that obligation never goes away until it is paid off. Cross- collateralization can be particularly harmful if you are signing both a recording contract and publishing agreement with the same company, and both contracts state that advances under either agreement can be repaid from royalties under both. This is a situation you want to avoid if at all possible.(e.33) As will be explained in the "Mechanical Royalties" section, publishing is a source of great potential income for you if you write your own songs, and you need to do everything you can to insulate that income from cross-collateralization.

IV. ROYALTIES & DEDUCTIONS

A. ROYALTIES

Royalties are the payments you receive from copies of your album that are sold and for which the record label receives payment (i.e., "net paid sales").(e.34) Royalty rates are usually expressed in one of two ways: as 7 to 12% of the suggested retail list price (SRLP) of albums sold minus taxes and duties, or as 14 to 24% of the wholesale price of albums sold.(e.35) They can be calculated as part of an "all-in" or a "non-all-in" deal.

1. ALL-IN
In an "all-in" deal the artist's royalty rate includes both the artist's as well as the producer's royalty.(e.36) This type of deal is considered to be the industry standard.(e.37) The artist is usually required to pay the producer 3% out of his or her royalty rate.(e.38) For example, if your royalty rate is 12% of the suggested retail list price and the producer is given a 3% royalty rate, your royalty rate will be reduced to 9%.(e.39)

2. NON-ALL-IN
In a "non-all-in" deal the producer's production fee is paid from the label on the artist's behalf, so the artist gets to keep the entire royalty.(e.40)

B. DEDUCTIONS

Unfortunately, you do not get 100% of the royalty calculated above. Instead, there are several deductions that will be made from your royalties. Some deductions, such as the one made for "new technology," apply to the royalty rate (i.e., the percentage of SRLP or wholesale price that you were promised), while others like the "container charge" affect the royalty base (i.e., the amount of money against which the royalty rate is figured, meaning the SRLP or wholesale price).(e.41) Deductions can also be made by reducing the number of albums that are considered "sold," such as "free goods," "breakage fees" and the "reserve clause."

1. NEW TECHNOLOGY
Although the reasons for this deduction are outdated and the practice is slowly being put to rest, record companies often pay only three-quarters of the promised royalty rate because CDs are considered "new technology." For example, if you were promised a royalty rate of 9% of SRLP, you would only receive 6.75% of SRLP once this deduction is taken. The reasoning is that research and development costs should be passed on to the artist.(e.42) In order to continue paying only three-quarters of the promised royalty rate despite the fact that CDs are now standard technology, some record companies have replaced the new technology deduction with others, such as deductions if an album doesn't sell for full retail price, or for costs the record company says it will use for album promotion.(e.43)

2. CONTAINER CHARGE
The "container charge" (sometimes also called "packaging cost") refers to the cost of the actual case that your CD is packaged in. This will most likely be charged back to you by deducting 25% of the retail sales price of the CD off the retail sales price before your royalties are calculated.(e.44) The thinking behind this deduction is that an artist should only be paid for the recording itself, not the "packaging ingenuity" of the record company as manifested in artwork or wrapping.(e.45)

3. BREAKAGE FEES
"Breakage fees" are remnants of the vinyl era. When vinyl discs were the primary recording format some of them did break during shipping, so record companies would pay royalties on only 90% of records sold.(e.46) Although this deduction is becoming less frequent, it is still used in some contracts, and you should try to negotiate it out. CDs made of strong polycarbonate are not as susceptible to breakage as vinyl was.(e.47)

4. FREE GOODS
The deduction for "free goods" is often slipped in under the definition of "Sales." The record label will most likely give a number of copies of your album to distributors, radio program directors and other entities for promotional purposes.(e.48) Because the label does not receive payment for these goods they are not considered "sold", and you will not be paid royalties on them. To account for this, the record label may subtract another 15 to 25% of the number of albums reported as sold before calculating your royalties.(e.49)

5. RESERVE CLAUSE
Record albums are considered consignment items, meaning that record stores have the right to ship unsold albums back to the distributor and receive a full refund.(e.50) Because artists are not paid royalties on unsold albums, labels will hold back a part of an artist's royalties as a "reserve" against potential returns.(e.51) For example, if your contract states that the record label will withhold a 20% reserve, then only 80% of your royalties will initially be paid out to you. The other 20% will be held in the label's bank account, where it will collect interest money that the label will probably keep.(e.52) You should try to negotiate a limit to the amount of the reserve the label is entitled to hold back, such as 35% of album sales during a particular accounting period.(e.53) You should also ask for a definite period of time, such as two years, during which the label must pay the reserve back to you if the reserve amount is greater than the amount of money lost on unsold albums.(e.54) It is better to receive your reserve payments in equal installments rather than in one lump sum.(e.55) (Remember, unlike the other deductions, you will eventually get this money back if the reserve amount is greater than the amount of money lost on unsold albums.)

6. ADDITIONAL DEDUCTIONS
Often the contract will state that additional costs such as video production costs and independent promotion costs must be paid out of the artist's royalty.(e.56) You should negotiate to get this taken out of the contract, or at the very least, reduced to 50%.(e.57)

V. MECHANICAL ROYALTIES

(Please note that mechanical royalties and the following subsections apply to songwriters or singer-songwriters only.)

A recorded song is composed of two separate properties: the words and music, and the actual recording of the words and music.(e.58) If you write the words and music for your own songs, then you are the copyright owner of your songs, meaning that you own the exclusive rights listed in the "What are Copyrights?" subsection of the "Copyrights" section of this website.(e.59) The section of your contract entitled "Mechanical Royalties", "Licenses for Musical Compositions" or "Controlled Compositions" deals with the royalties you are entitled to receive as the copyright owner of the songs on the album, rather than as the performer. Because careful management of the copyrights in the songs you have written could potentially result in substantial income for you, it is extremely important that you understand the basic concepts expressed in this section of your contract, including "Mechanical Rights, Licenses & Royalties," "Compulsory License & Statutory Rate," and "Controlled Compositions." It is also helpful to understand the basics of federal copyright law as it pertains to songs.

A. COPYRIGHT LAW

As a form of intellectual property, songs are subject to the protection and regulation of federal copyright law as established in the Copyright Act of 1976. As stated by the United States Supreme Court, one of the main goals of copyright law is to "promote the creation and publication of free expression."(e.60) The protection afforded by copyright is meant to be an incentive for artists to create by assuring that their original works can not be used without permission. In terms of a recording contract, the record label must be able to use songs protected by copyrights so that it can make and distribute albums. The label must make a payment agreement with copyright owners in order to do so. These agreements are part of recording contracts, and are based on both the Copyright Act of 1976 and industry standards.

B. MECHANICAL RIGHTS, LICENSES & ROYALTIES

You as a songwriter have the right to charge as much as you want for the first distribution (i.e., "first use") of one of your songs.(e.61) This right is called a "mechanical right" and the authority to exercise this right is called a "mechanical license."(e.62) The money you receive for your mechanical license is your "mechanical royalty."

C. COMPULSORY LICENSE, STATUTORY RATE & INDUSTRY PRACTICE

1. COMPULSORY LICENSE
After your have authorized the first distribution of your song, the Copyright Act of 1976 says that anyone who wants to make and distribute copies of your song on a record for the private use of members of the public may do so, as long as they get a "compulsory license."(e.63) This compulsory license is obtained by sending written notice to the copyright owner and paying him or her an amount of money known as the "statutory rate."

2. STATUTORY RATE
The statutory rate is set by a governmental organization called the Copyright Arbitration Royalty Panel, and it increases slightly every two years based on changes to the United States Consumer Price Index.(e.64) For the period beginning January 1, 2004 and ending December 31, 2005, the statutory rate is 8.5 cents per song per unit sold for songs lasting five minutes or less, and 1.6 cents per minute for songs lasting more than 5 minutes, whichever is greater.(e.65) This is an increase over the previous rate of 8 cents or 1.5 cents, respectively.(e.66)

3. COMMON PRACTICE
Compulsory licenses are rarely purchased by record companies because the accounting provisions that must be followed in this type of transaction are very difficult to comply with.(e.67) Instead, record labels usually contract to pay for the mechanical license directly with copyright owners or, more frequently, their music publishers.(e.68) (See the "Music Publishing" section of this website for further information about music publishers and how they can help administer your copyrighted works.)(e.69) In a typical recording contract, the statutory rate serves as a ceiling (i.e., maximum amount) of the mechanical royalty that the record label will be willing to pay for the mechanical license.(e.69) The following subsection explains how record labels usually contract to pay your mechanical royalties by establishing their own "mechanical royalty rate" (i.e., the rate at which they pay your mechanical royalties).

D. CONTROLLED COMPOSITIONS & THE THREE-QUARTER RATE

1. CONTROLLED COMPOSITIONS
The section of the contract usually called the "Controlled Composition Clause" sets a limit on how much the record label must pay the artist in mechanical royalties for each "controlled composition." A "controlled composition" is a song in which the artist has an income or interest (i.e., the artist wrote it, owns it, or controls it).(e.71) As mentioned in the previous subsection, the statutory rate of 8.5 cents per song per unit sold is the maximum amount the label will be willing to pay in mechanical royalties.

2. THE THREE-QUARTER RATE & ITS DRAWBACKS

a. THE THREE-QUARTER RATE
Record labels rarely pay the maximum, but choose instead to set their own mechanical royalty rate. They usually agree to pay three-quarters of the statutory rate, and to pay this rate on a maximum of ten songs per album, regardless of how many of the artist's songs are actually on the album.(e.72) This payment rate is commonly referred to as the "Three-Quarter Rate."

b. DRAWBACKS
There is evidence that this custom of trade is breaking down, as mechanicals are often now paid on twelve or fourteen songs instead of just ten.(e.73) Hopefully record labels will soon be willing to pay artists the full statutory rate for mechanical licenses. However, for the time being the three-quarter rate is unfortunate for you as the songwriter for a number of reasons.

i. With the three-quarter rate you make less money than you would if the label were paying the full statutory rate. For instance, if your album contains fifteen songs that you have written and each song lasts less than five minutes, then with the statutory rate you would be entitled to 8.5 cents per song for each album sold. That amounts to around $1.28 in mechanical royalties per album sold. With the three-quarter rate, however, you would only receive approximately 6.4 cents per song for ten songs per album sold, which amounts to around 64 cents in mechanical royalties per album sold.

ii. The three-quarter rate offered by the label is fixed (i.e., will not change) for the entire term of the contract, while the statutory rate set by the federal government increases every two years.(e.74) The date from which the label's rate is fixed is usually either the date of recording, the date the master is delivered, or the date of first release of the master.(e.75) It is in your best interest to negotiate for the latest possible date, because the statutory rate may have increased between the time the album is recorded and the time it is released, and you will want to take advantage of the higher rate.(e.76) (The statutory rate may go up, but it will never go down.)

iii. Record labels make deductions to the three-quarter rate. The contract will probably state that mechanical royalties are payable on only those albums for which record royalties are payable, meaning that you will receive no mechanical royalties for albums that are given away as free goods.(e.77) (You can refer back to the "Free Goods" subsection under the "Royalties & Deductions" section to understand the albums on which royalties are not payable.) Also, rates less than the three-quarter rate may be paid on albums sold at greatly reduced prices, through record clubs, or any other nontraditional channels.(e.78)

iv. Think about what was mentioned in the subsection "Mechanical Rights, Licenses & Royalties": under federal copyright law you are entitled to charge whatever you want for the first use of your song. If the songs you record for the label under this contract have never before been recorded or distributed, then under federal law you are allowed to ask for any amount in mechanical royalties. By dictating the three-quarter rate to you, the label is taking away this right. In effect, the label is paying you less than you would make even if it were not your first use (i.e., the full statutory rate).

v. The record label's word choice regarding the three- quarter rate can be misleading. Sometimes labels call the three -quarter rate that they are offering the "Statutory Rate" in uppercase letters, while they refer to the rate set by the federal government as the "statutory rate" in lowercase letters.(e.79) Remember, the three-quarter rate usually offered by record labels is NOT the law of the United States, and it can be negotiated out of your contract. This may be difficult for a new artist to do, however, because the three-quarter rate has been industry standard for a long time, and the new artist may not have sufficient negotiating power to secure a better rate.

 

VI. DEFINITIONS

The definition section often comes toward the very end of the contract. It is, however, one of the most important sections of the contract, and it would be in your best interest to at least skim it before reading anything else. Throughout the contract there will be many everyday words such as "delivery" and "sales" that will be defined differently that you might expect. Also, there will be words and phrases that may be new to you such as "container charge" and "controlled composition," and you will want to familiarize yourself with them before you encounter them in the contract.

VII. OTHER SECTIONS

This is by no means an exhaustive list of all the sections that usually appear in major label recording contracts. What follows is merely a small number of these sections with brief descriptions meant to acquaint you with some common contract issues and terms.

A. ARTWORK

This section of your contract deals with how much involvement you have in the creation, selection and approval of album artwork. In some cases the label grants you the right of "consultation," meaning that the label chooses the artwork, asks for your opinion on it, but then has the right to use the artwork even if you disapprove.(e.80) In other circumstances, you may be given "approval rights." In this case the label still chooses the artwork, but cannot use the artwork unless you approve.(e.81) Once you gain more bargaining power, the record label may allow you to create your own artwork, provided that it is not offensive or objectionable, and that its usage does not cost an excessive amount.(e.82)

B. ASSIGNMENT

In most recording contracts the record label will reserve the authority to "assign" (i.e., transfer) its rights in your contract to another label or corporate entity.(e.83) This usually occurs when the label is sold or merges with another label.(e.84) For you as the artist, this means that your recording contract would be under the direction of whatever entity has purchased or merged with your original record label. Sometimes this can create a situation that is undesirable for you, especially if the new entity does not provide you with as much support as the original record company did. Although it is difficult for new artists to change the assignability of their contract, more established artists may be able to limit the assignability. Once you have more experience and bargaining power, you may be able to get a "key man clause" inserted into your contract. This clause gives you the right to terminate the contract if the "key man" (or woman) who was instrumental in securing your contract leaves the company.(e.85)

C. AUDIT & SOUNDSCAN

1. AUDIT
This section will most likely be called "Royalty Accounting" or "Royalty Payments."(e.86) In it, the record label will explain the terms by which you are allowed to "audit" them. An audit occurs when an accountant reviews and verifies the books and records of the record label that apply to the accounting statements (usually involving royalties from record sales or mechanicals) which have been sent to the artist.(e.87)

2. SOUNDSCAN
One of the main tools that record labels use to keep records that they know will be reviewed by accountants during the course of audits is called "SoundScan." SoundScan is a software system used in most major record stores to scan the bar-code on the back of CDs when they are being purchased, thus providing a fairly accurate account of the number of copies of any album sold.(e.88) SoundScan sells its data to record labels, which use the numbers to figure out how many copies of a certain album were actually sold, as opposed to just shipped to retail stores.(e.89) SoundScan is also the source of the Billboard statistics.(e.90) While SoundScan provides an overall fair and accurate accounting of sales, it is sometimes misleading because it does not provide sales figures from many small music retailers.(e.91)

D. COMPOSITION OF "THE ARTIST" - ie, Band Members

This section is relevant if you are a member of a band, rather than a solo artist. In this section, the record label will explain what happens if any members of the band leave. In most instances the label will require that a replacement be found, and it might further require that it have authority to choose this replacement, or at least approve the replacement chosen by the remaining band members.(e.92) Also, this section might contain a sentence stating that the label has the right to continue to record the work of the dropout member if he or she chooses to become a solo artist.(e.93)

E. INDEMNIFICATION

"Indemnification" refers to the act of repaying money that you have caused someone else to lose.(e.94) Your contract will most likely contain a section that explains how and in what situations you will be required to indemnify (i.e., repay) the record label. These situations usually arise when a third party sues the label for something the third party accuses you of doing, such as stealing a song or causing property damage to a hotel room or performance venue.(e.95)

VIII. COMMONLY USED LEGAL TERMS

This is not an exhaustive list of the legal terms and phrases that frequently appear in major label recording contracts. It is only a collection of some of the most common terms used.

A. Commence - to begin. Commencement - the beginning.(e.96)
The second option will commence upon the expiration of the immediately preceding contract period. This phrase means that whatever begins the sentence ( "the second option period" in this example) will begin as soon as the previous contract period (either an option period or the initial period) ends.
Commencement of the applicable Period. This phrase refers to the beginning of the contract period that is being discussed.

B. Embody - to give definite, tangible, or visible form to; to bring together into an organized whole.(e.97)
Embodied on - This term can refer to the date on which a contract or agreement was signed.

C. Foregoing - previously said, written or mentioned in the contract.(e.98)

D. Hereby - by this document; by these very words.(e.99)

E. Hereinafter - later in the document.(e.100)
Except as otherwise hereinafter set forth - When this phrase is used it means that the label is about to tell you something that may not hold true in certain situations, and that these situations will be described later in the contract.

F. Hereunder - This usually refers to something coming later in the document, or to something you need to do in accordance with the document.(e.101)

G. Notwithstanding - in spite of; although.(e.102)
Notwithstanding anything herein contained to the contrary - This phrase creates an exception to what is otherwise contained in the contract. In other words, when you see this phrase at the beginning of a sentence, know that the words following it will overrule anything in the contract that says something contradictory.(e.103)

H. Pursuant to - following upon; in accordance with.(e.104)
Pursuant to the receipt of a financial instrument - Once money has actually been received. (e.105)

Endnotes:

1. Moses Avalon, Secrets of Negotiating a Record Contract: The Musician's Guide to Understanding and Avoiding Sneaky Lawyer Tricks 285 (Backbeat Books 2001).
2. Donald S. Passman, All You Need to Know About the Music Business 148 (Simon & Shuster 2000).
3. Donald E. Biederman et al., Law and Business of the Entertainment Industries 587 (4th ed., Praeger 2001).
4. Id.
5. Id.
6. Avalon, supra n. 1, at 302.
7. Biederman et al., supra n. 3, at 587.
8. M. William Krasilovsky & Sidney Shemel, This Business of Music: The Definitive Guide to the Music Industry 17 (8th ed., Billboard Books 2000).
9. Id.
10. Id.
11. Avalon, supra n. 1, at 249.
12. Id.
13. Passman, supra n. 2, at 116.
14. Biederman et al., supra n. 3, at 587.
15. Passman, supra n. 2, at 117.
16. Avalon, supra n. 1, at 252.
17. Id.
18. Id. at 253.
19. Moses Avalon, Confessions of a Record Producer: How to Survive the Scams & Shams of the Music Business 215 (Backbeat Books 2002).
20. Id. at 216.
21. Avalon, supra n. 1, at 87.
22. Lawrence J. Blake, Analysis of a Recording Contract, in The Musician's Business & Legal Guide 326, 374(Mark Halloran ed., 2nd ed., Prentice Hall 1996).
23. Krasilovsky, supra n. 8, at 19.
24. Biederman et al., supra n. 3, at 589.
25. Blake, supra n. 22, at 332.
26. Biederman et al., supra n. 3, at 589.
27. Id.
28. Id. at 587.
29. Avalon, supra n. 19, at 56.
30. Id. at 63.
31. Passman, supra n. 2, at 103.
32. Id. at 104.
33. Id.
34. Biederman et al., supra n. 3, at 587.
35. Krasilovsky, supra n. 8, at 19.
36. Id.
37. Passman, supra n. 2, at 110.
38. Krasilovsky, supra n. 8, at 19.
39. Id. at 21.
40. Avalon, supra n. 19, at 80.
41. Id. at 41.
42. Id. at 58.
43. Id at 59.
44. Id. at 57.
45. Krasilovsky, supra n. 8, at 20.
46. Avalon, supra n. 19, at 58.
47. Id.
48. Id.
49. Krasilovsky, supra n. 8, at 21.
50. Avalon, supra n. 19, at 61.
51. Krasilovsky, supra n. 8, at 21.
52. Avalon, supra n. 19, at 61.
53. Krasilovsky, supra n. 8, at 21.
54. Id.
55. Id.
56. Id. at 22.
57. Id.
58. Biederman et al., supra n. 3, at 601.
59. The Copyright Act of 1976 grants to the owner of a copyright the exclusive rights "(1) to reproduce the copyrighted work in copies or phonorecords; (2) to prepare derivative works based upon the copyrighted work; (3) to distribute copies or phonorecords of the copyrighted work…; (4) in the case of literary, musical dramatic and choreographic works, pantomime and motion pictures…,to perform the copyright work publicly; (5) in the case of literary, musical dramatic, and choreographic works, pantomimes, and pictorial, graphic, or sculptural works…, to display the copyrighted work publicly; and (6) in the case of sound recordings, to perform the copyrighted work publicly by means of a digital audio transmission." 17 U.S.C. §106 (1)-(6) (1976).
60. Eldred v. Ashcroft, 123 S. Ct. 769 (2003).
61. Avalon, supra n. 1, at 118.
62. Krasilovsky, supra n. 8, at 175.
63. 17 U.S.C. §115(a)-(c) (1976). This section of the Copyright Act of 1976 pertains only to nondramatic musical works. If your song was created in the context of a dramatic work, another section of the Act applies.
64. Krasilovsky, supra n. 8, at 176.
65. Jim Bessman, Legal issues, acquisitions mark publishing year, 115 Billboard 52, 20 (December 27, 2003) (available at 2003 WL 66040047).
66. Id.
67. Passman, supra n. 2, at 213.
68. Id.
69. Basically, publishing companies collect songwriters' royalties from record companies as well as movie in television companies that use songs in soundtracks to films or television shows. You can choose to hire a publishing company to do this, or you can do it yourself. Avalon, supra n. 19, at 33.
70. Krasilovsky, supra n. 8, at 180.
71. Passman, supra n. 2, at 223.
72. Id. at 225.
73. Telephone interview with Andrew Halbreich, Director, Trace Elements, Music Publishing, Administration and Consulting. (Nov. 26, 2003).
74. Avalon, supra n. 1, at 123.
75. Passman, supra n. 2, at 226.
76. Id.
77. Id.
78. Blake, supra n. 22, at 353.
79. Avalon, supra n. 1, at 123.
80. Passman, supra n. 2, at 162.
81. Id.
82. Blake, supra n. 22, at366.
83. Krasilovsky, supra n. 8, at 27.
84. Id.
85. Id.
86. Avalon, supra n. 1, at 214.
87. Christian L. Castle, Protecting Record Producer's Interest in Music-Royalty Audit Scenarios, 19 Ent. L. & Fin. (Law Journal Newsletters) 1 (Oct. 2003).
88. Avalon, supra n. 1, at 217.
89. Passman, supra n. 2, at 163.
90. Id.
91. Avalon, supra n. 19, at 190.
92. Krasilovsky, supra n. 8, at 16.
93. Id.
94. Avalon, supra n. 1, at 236.
95. Id. at 238.
96. Webster's New World College Dictionary 280 (Victoria Neufeldt ed., 3d ed., Simon & Schuster, Inc. 1997).
97. Id. at 443.
98. Id. at 527.
99. Black's Law Dictionary 320 (Bryan A. Garner ed., 2nd pocket ed., West 2001).
100. Id.
101. Id.
102. Webster's New World College Dictionary at 928.
103. Avalon, supra n. 19, at 194.
104. Webster's New World College Dictionary at 1092.
105. Avalon, supra n. 19, at 193.