In a recent post, I gave some basic pointers with regards to signing any contracts related to your music (or contracts in general). I recently came across a California law that was on point with that discussion and wanted to expand on it a bit in a separate post. Also, my friends have given me a hard time for some of my lengthy posts, so I’ll try to keep this short and sweet.
As I stated in my previous post, in Nevada a Court will construe an unambiguous contract according to its plain language. Sheehan & Sheehan v. Nelson Malley & Co., 117 P.3d 219, 223-24 (Nev. 2005). Further, Nevada Courts have ruled that a person is bound by any document they sign “in spite of any ignorance of the documents content” provided there has been no misrepresentation. Yee v. Weiss, 110 Nev. 657 (Nev. 1994). I have personally cited to this case with success in contract actions in Nevada.
While doing some research for a forthcoming post, I was reading the 9th Circuit case F.B.T. Prods. LLC v. Aftermath Records, 621 F.3d 958 (9th Cir., 2010). Briefly, this case dealt with issues related to royalty payments under a contract with Marshall B. Mathers, III, better known as Eminem. The case cites to California Civil Code § 1638, which states that under California law:
The language of a contract is to govern its interpretation, if the language is clear and explicit, and does not involve an absurdity.
This is an important law for several entertainment related reasons. First, many of the attorneys who practice entertainment law, and thus draft entertainment law related contracts, are located in California. As such, there’s a good chance that any potential entertainment related contract you sign might have a “choice of law” and/or “choice of forum” clause indicating that California law applies to the interpretation of the contract, and/or any and all disputes arising out of the contract will be handled in a California Court. This makes sense-the attorneys drafting the contract are probably the best persons to litigate the contract, and they want to litigate in a forum that is convenient for them. On a side note, I try to include choice of law/choice of forum clauses in my contracts stating that Nevada law applies and that cases will be litigated in Nevada, for this very reason. Every once in a while a contract may contain a choice of law/choice of forum clause stating that some random jurisdiction’s laws will apply (Delaware and Florida are popular). This is generally because those States have case law that is very favorable to the position of the person drafting the contract.
So a word of caution when signing any entertainment related contracts-check to see if there is a “choice of law” and/or “choice of forum” clause indicating 1) what State’s law applies and/or 2) where the contract will be litigated in the event of a dispute. In the event that an entertainment contract is controlled by California law, be mindful that under California Civil Code § 1638, you will be held responsible for whatever contract you sign so long as the language is “clear and explicit.” While the code does provide an exception in the event that the contract “involve[s] an absurdity”, you can rest assured that if the contract was prepared by a competent and experienced attorney then that attorney has used contract language which is standard in the industry and/or has been supported by case law.
So without sounding like a broken record, the bottom line is to always read over any entertainment contract very carefully, and if possible have an attorney, family member, friend, or someone you trust read it over with you. If you are unsure of a provision don’t be afraid to ask questions or negotiate terms!