If you’re an artist about to strike a deal with a label or a company, you may want to hold onto that pen before signing. As with any other legal undertaking, it’s important to know your rights as an artist under Canadian laws. Learn about the statutes that may affect your planned recording contract.
What are recording contracts?
Recording contracts or record deals are legally binding agreements between recording artists (individuals or bands) and their record labels or record companies. The contract outlines the rights and obligations of both parties.
Typical record deal
Typical or traditional recording contracts will specify the number of songs or performances that an artist must do, in exchange for compensation from the record label.
The contract will also state the extent of the record label’s use of the artist’s copyright, still in exchange for compensation – also called royalties.
On the other hand, the record label is expected to sell the songs/performances, promote the artist, or both.
The recording contract may also specify the marketing responsibilities, largely on the part of the record label. It comes from the idea that record labels are chosen by artists not just on their ability to pay the artist, but also by their marketing strengths on behalf of the artist.
Types of record contracts
Aside from a traditional or typical recording contract, there are also other types of deals or contracts that labels or companies may offer an artist. Some of them are the following:
Distribution deals:
This is where artists provide songs to the distribution company, who will market such materials to retail stores and/or digital service providers.
Compared to traditional recording contracts, distribution deals do not touch on the issue of copyright, which is still with the recording artist. Here, distribution companies are only expected to ‘distribute’ or make the artist’s songs available to the market.
Production deals:
Under this arrangement, the production company only assists the artist in recording and producing their songs. Afterwards, the company will venture into marketing such records with another record label or distribution company, who will do the end-user marketing. Production companies earn a percentage of the artist’s royalties in return for their services.
360 deals or multiple rights deal:
As the name suggests, 360 deals happen when a label or company manages the entirety of an artist’s career. This ranges from production, distribution and marketing of records, up to the other performances of the artist (e.g., endorsements, live concerts, acting roles, etc.). Here, the label or company earns not only from the artist’s music sales, but also from other revenues, in exchange for handling the artist’s other engagements.
Watch this video to know more about 360 deals or multiple rights deal:
If you’re an artist who is offered a recording contract, it’s important to be represented by an entertainment lawyer. Contact one in your area. Artists from Toronto or Ottawa can consult with a Lexpert-Ranked entertainment lawyer in Ontario.
Are recording contracts governed by Canadian laws?
Although not directly involved in the creation of record contracts, these Canadian laws have an impact in how contracts are regulated:
Laws on contracts
Recording contracts are governed by Canada’s common law principles on contracts, except for Québec which is governed by its Civil Code. Recording contracts are also governed by Canada’s music laws.
When validly entered by artists and a label or company, it must be complied with in good faith. Otherwise, either party who breaches the contract may be compelled by the court to carry out their contractual promise or to be liable for damages.
For example, an artist who refused to perform an act that is explicitly agreed in the contract may be forced by the court to fulfill such promise or pay damages to their label or company.
In the same vein, artists may also demand the same from the other party, where the issue is usually about the artist’s right to payment.
Artists must be wary when signing recording contracts since these are legally binding and cannot be easily broken.
Copyright Act and Royalties
Canada’s Copyright Act has an impact on recording contracts. It defines the rights of artists regarding their copyright and its infringement and outlines royalty rates.
Under the law, when parties (the collective society and the user) cannot agree on the rate of royalties regarding an artist’s copyright, they can apply with the Copyright Board to fix such royalty rates. The Copyright Board also certifies tariffs and levies of royalties between artists and their collective society.
Artists should be aware of the appropriate royalties they receive as prescribed by law and the contract that they signed.
Status of the Artist Act
The Status of the Artist Act is Canadian law that establishes the legal and professional relations between artists and their producers.
The Act also guarantees the artist’s freedom of association. This means that artists have the right to form artists’ associations or professional associations which shall be certified by the Canada Industrial Relations Board.
These artists’ associations will help regulate the socio-economic interests of artists by having the power to bargain collectively at the federal level.
To be guided on the intricacies of recording contracts in Canada, hire the best entertainment lawyers in Canada as ranked by Lexpert.