Contract ground rules and money

Music Lesson Formatting

Overview of Contract Structure

So, we've spoken about the five headline structure elements in every contract:

• Time
• Territory
• What works
• Obligations of both sides
• Money

Shall we dive in and take a closer look?

Parties to the Contract

Let's start at the very beginning. You usually see a section that says "between" followed by the name of the manager, and then it states "hereinafter we, us, our."

Explanation of "Hereinafter"

• What does "hereinafter" refer to?

  This term is used to denote the short forms of the names of the parties involved. Once you have given the formal name of one party, there will be short forms to make drafting easier. Later references in the contract that are in inverted commas will refer back to that formal introduction.

Clarity in References

• Why use "we, us, our"?

  It's essential because it specifies who is being referred to in future clauses. If you ever feel confused about who "I" or "you" means, whether it's the manager or another party, always refer back to the beginning where these definitions are made clear.

Setting the Scene

The first part of the contract involves:

1. Identifying the Parties: Confirming who is involved in the agreement.
2. Fundamental Aspects: Outlining what the agreement includes and the roles of each party.

This section acts as a summary, ensuring everyone is clear on the details.

The Term of the Contract

• Heading: Term (in bold)

Here we note that this section should be negotiated between the manager and the artist.

Important Notes:

• There are many different options and no particular standard term.
• Flexibility in discussions is encouraged, be open and honest about concerns.
• Initial Setup: Establishing clear terms from the start supports the ongoing working relationship.

Handling Money

A significant point raised by a great lawyer, Anne Harrison, is about who will handle the money:

• Manager vs. Artist: In previous contracts, your management handled finances. However, as you grow, it's often better for the artist to take control over their income.

Example from Experience:

• In your early career, having a manager handle finances might have been beneficial due to your youth and inexperience.
• Later, being in control of your finances allows better oversight of your business dealings.

Accounting Responsibilities

Section 6.3 - Accounting

• Key Point: You shall have the right to collect all sums arising from your activities and appoint an accountant with relevant experience in the entertainment industry when appropriate.

Breakdown of Clause 6.1:

• Delivery of Account: You must provide a detailed account with relevant information.
• Access to Accounts: Online access to your accounts should be granted to the manager within 30 days after the end of every calendar quarter.
• Payment of Commission: You're obligated to pay the commission at the same time as delivering such a statement.

Key Responsibilities:

• This underscores that the artist is primarily responsible for their incoming funds but can delegate this task if they choose.

Importance of Clarity

• Having a structured team can make financial management feel less daunting and more efficient.
• The goal is to avoid catch-up situations by staying informed and proactive about money management.

Final Points on Advances:

• On Personal Advances: Any personal advances received over £5,000 must be reported and the commission paid within 30 days of receipt.

  This element ties into clauses about earnings and clarifies any exceptions related to payment structures.

By establishing a solid routine and ensuring that you have good processes and guidance, being in control can become a manageable and organized part of your career.