De-Mystifying Contracts:

Basic Contract Terms Explained

Choice of Law. If the parties are from different states, then the jurisdiction that will aply to the contract must be chosen in case there is a dispute and it must be interpretted by a court. Each party will attempt to negotiate for its home state law because that's what they and their lawyers are most familiar with. Also, sometimes the choice of law is from a totally different state, usually New York, California or Tennessee since those states especially have enacted specialized laws and have particular case precedent that deal specifically with entertainment issues. Some are more pro-artist than others. Choice of law is a separate issue from the choice of venue, that is, where any disputes will be litigated. Again, the advantage is to have your home state as the choice of venue, otherwise, you will have to go to another state to bring or defend a lawsuit, and hire attorneys who are licensed to practice there.

Counterparts. Under basic contract law, all the parties must sign a contract at the same time in the same place, for it to be valid and enforceable. A counterparts clause allows the parties to each sign a separate copy at different times, in different places, and together they all form one contract (so long as they all sign the identical contract, and all parties have signed).

Together with the photocopy clause, this makes contract execution in today's technologically-advanced world a much easier process. The lawyer could thus do one of two things: (1) fax a copy of the contract to her client to sign it, who then signs and faxes it on to the other side, who then likewise signs and faxes it back to the lawyer; or (2) fax a blank copy of the contract to each of the parties, who each signs his or her copy and returns it to the lawyer---and then together, both contracts separately signed by each party makes one fully-signed contract!

Joint and Several. If one of the parties to the contract consists of multiple individuals (group, husband and wife, 2 or more songwriters, etc), then each of those individuals who make up that party should be held responsible one hundred percent under the contract. Otherwise, they are each responsible only for their pro rata share of any damages.

For example, if The Dukes of Kooks is an alternative band consisting of 4 members who all sign the contract as Artist, and they are held liable in a court of law for some damages for failure to appear at a gig, and they have NO joint & several clause under the contract, you must go after each of the four members for their 1/4 share of the damages in order to collect your full judgment. With a joint & several clause however, they are each fully liable for 100% of the damages and you can thus collect the judgment against any one or more of the members up to 100% of the judgment. It is a private matter between the members themselves as to each's share of the liability and reimbursement for or contribution to any monies collected from them individually, and sometimes results in subsequent litigation between them, but should not be the problem of the judgment holder seeking payment.

Photocopy. Under basic contract law, only the original signed copy of the contract is admissable in a court of law, with some exceptions. In some states now, such as Maryland, a copy of the contract can be as legally valid and binding as the original so long as that is stated in the contract.

Severability. With a severability clause in the contract, if any one clause or part of the contract is deemed to be invalid, unenforceable or illegal, then it is severed from the contract and the rest of the contract remains in full force and effect. Otherwise, if you omit the severability clause, the entire contract must be thrown out.

Entire Agreement. That the contract constitutes the entire agreement between the parties and can only be modified by a writing signed by both.

Last updated 11/1/99

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