By Sam Omotoso Esq. and Mobolajo Davidson Esq.

Introduction

I really wish this write up will reach musicians, models, celebrities and everyone in fact. Just before you sign that contract take a pause and say the Lord’s Prayers with your eyes opened.

Trending over the social media space last week was the outcry of an artist who claimed she was unfairly treated by her former record label. Few years ago a Nigerian singer was embroiled in a contractual dispute with his then-record label. The dispute prevented him from performing throughout the festive period of December 2017 and also led him to change his stage name. Few years before that, it was another artist with a similar story. Guess what? Few years before that few years, there was also an artist with the same story. It therefore means that the problem in question is a reoccurring one. Questions that would readily come to mind are:

What are the probable cause(s) of the dispute between artists and their record labels?, How can this reoccurring issue be avoided?. As briefly as possible, I would examine these questions.

Probable causes of disputes between Artists and their Record Labels.

On the 29th of May 2020, under the auspices of Law_Television through the program Law Unrobed via instagram live, the guest Mr. Mobolaji Davidson Esq identified the probable causes of disputes between artists and their record label. Discussions and research revealed that most of the contracts entered into by the artists and record labels do not create a balance between the record label and the artists. While the record label is focused on making profits because it is not a charity organization, it in certain ways (intentionally or otherwise) inputs certain terms that may be considered “unfair” to the artists. However the artists who is happy that “God is about to change his story” and elevate him or her from the gutters of Ajegunle to the beautiful part of Lagos known as Victoria Island, the artist blinded with the fantasy or reality that he is about to “blow” signs the contract tabled before him without going through the terms or contacting a lawyer to help review the contract before signing it. Unknown to the artist, whatever the term of the contract is, the artist is bound. The record label definitely has the higher bargaining power and always uses this to their advantage.

The principles of Contracts are clear. A party is bound by whatever he/she signed. Few years back an artist claimed that he was paid millions for shows but was only paid N30,000 (thirty thousand naira) monthly by his record label. It is imperative to note that consideration need not be adequate but sufficient. This simply means where a record label promises to promote an artist, release videos and so on and in turn states that the artist will be paid only N15,000 (fifteen thousand naira) per month, where the artist signs he/she is bound, this is because “consideration need not be adequate but sufficient”. Hence just before you sign that contract that you think might change your life, remember that all that glitters is not gold.

How this can be avoided?

Get a Lawyer.
Most times people avoid the services of a Lawyer saying lawyers are expensive forgetting that ignorance is far more costly. When things go south they contact the services of the Lawyer they should have contacted earlier but by then the damage might already be too fatal and they pay multiple times the amount they would have paid if they had contacted a Lawyer earlier. A Lawyer is trained and would look behind the veil and as much as possible try to secure a beneficial contract for his client. In summary do not rush to sign a contract without getting a Lawyer; they are affordable Lawyers if finance is your excuse. Record labels use the desperation of artists to secure their signatures, and the artist signs carelessly. Remember that the record label is not a charity organization, neither is it a government institution, it is a business enterprise with the sole aim of making money.

Negotiate and Identify your issues and interests
Like I stated earlier, desperation is the reason why a lot of persons enter into this mess. Look at the contract critically. The record label has the higher bargaining power and they know this. Be sure of how many years the contract will last for; be sure of the extent of control the record label on you. We see instances where record labels draft contract where they take as much as 80 percent of all profits. Going through the contract that surfaced online between a once upon a time superstar and her former record label, it showed that there was no obligation on the part of the record label where the record label fails to fulfill its part in the contract. In other words where the record label in the contract promises two videos per year for instance and does none, nothing happens. But where the artist for instance cannot make it for a show such artist contract is terminated and he/she could lose everything. A contract between two parties is meant to be two sided and not one sided. The artist can negotiate and vary some terms of the contract; agree to some, decline some, add or subtract from some subject to his discretion. The record label might act as if to decline the terms of the artist in the contract, but that is also a strategy in negotiation. The artist should ensure that he/she is satisfied at the end of the bargain, that way everyone gets a mutually beneficial contract.

Insert clauses in the contract that gives you a leverage
Clauses are sentences in a contract that provides certain leverages. Some contracts include perpetual royalties where the record label makes money off the artist even where he is out of the record label. The artist can ensure that clauses are included in the contract where:

The artist can terminate the contract (walk away) when he feels that the relationship between the artist and the record label has become prejudicial.

The artist can terminate the contract when he feels that the record label is not fulfilling its obligations as stated in the contract. For instance according to the terms of the contract the record label is to shoot four videos for you per year, they do so for the first one year but after that year, a new artist is signed and the former artist is relegated to the background (regular Naija story), you should be able to walk out.

Furthermore, the artist should be able to terminate the contract with his/her name, fame, reputation and so on intact. With at least two Nigerian artists I know of, the story was that once they were leaving the record label they signed for, they had to stop using that name permanently. For one it was even her real name while for the other they claimed the name had been trademarked so he had to stop using the name from the moment he stepped out of the record label. They went as far as getting an injunction from the court and asking for unreasonable amount of money as compensation to the record label. While the contracts exit fees might require certain financial obligations it should not be exorbitant or unreasonable. I stumbled on one which stated that the artist would pay the sum of 150,000,000 (one hundred and fifty million naira) where he wants to exit the record label before his contract expires. Unfortunately the artist signed without a proper review and he is in debt currently. If there was a clause permitting him to leave with maybe a few months’ notice or maybe a better arrangement that artist will not be facing debt or lawsuits.

Conclusion

Remember that this is not strictly for Artists or Celebrities, it applies in every contract. It does not matter the profession.

Whether or not there is a leeway out of signing a messy contract, it would not be necessary if precautionary measures are taken to sign mutually beneficial or satisfactory contracts. However where the deed has been done the defendant can seek solace in court by raising the defense of unfairly prejudicial contract, undue influence or inequality of bargaining party. To know what those defenses entail, contact your Lawyer, the one you should have contacted earlier.

Contact: samuelomotoso19@gmail.com