ENTERTAINMENT CONTRACTS 51

INTRODUCTION TO ENTERTAINMENT
CONTRACTS
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NIS .chapter iriirddLiCeS'the'StUdent to contract law fundamentals an
exploregiome interesting issues involving contracts and contract dis-1.14
putes inffie entertainment industry. Contracts in entertainment law vary
greatly. Understanding contract formation, elements, terminology, and
the general nature and role of contracts is important in any industry. As
in many industries, entertainment industry contracts can be b,oilerpl4te
in nature, This means that they utilize standardized, prep04f6d forms
where usually the only terms to negotiate include dates, dollars, times,
- and duration of the agreement. Boilerplate contracts are sometimes re-
ferred to as "fill-in-the-blank" contracts. The existence of boilerplate
contracts is in part a result of successful negotiations evolving from the
various unions or guilds involved in the entertainment industry.,,o.t.
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Negotiating.
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Numerous contracts in the entertainment industry emanate from handshake

deals. Historically, the entertainment industry thrived on oral contracts.
Some members of the Hollywood community take great pride in proclaiming
that the rigid rules of written contracts do not apply to them because the in-
gkil dustry often regulates itself. One who did not fulfill their obligation was often
squeezed out of the industry. Times have changed, however, and formal contracts
,

A'14:5
52 ENTERTAINMENT

or agreements (often involving entertainment lawyers) are usually a s

part of most deals.
Oral contracts often prove effective in close-knit industries such as the
ous segments of entertainment Still, when things go wrong (for example,
party breaches their promise to another), most wish that the oral contract
been reduced to a written contract from the beginning, so as to establish a
position in litigation or for a settlement to avoid a lawsuit. While oral contracts
be valid under certain conditions, they are still not favored by industry practi
em or courts. Critics of these oral "handshake deals" often note that som
oral agreements are made by the party with greater bargaining power in order
find a way out of an. agreement, if they decide to no longer pursue the produ
of the agreement. In other words, the party with the greater bargaining po
knows exactly what they are doing by not putting the arrangement in wri
leaves the artist in limbo with Little proof of an agreement if the studio or co
backs out or makes a decision to terminate pursuit of that relationship.
Oral agreements are not often found in the music and recording ind
This is due to the higher prevalence of long-term agreements and royalty
culation issues discussed in Chapter 8. Sometimes band members fail to
their group arrangement in writing. This can lead to unfortunate disagreem
over who was entitled to what percentage of income in the event of the d'
lution of a band and so on.

GENERAL CONTRACT LAW PRINCIPLES

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Virtually every business relationship involves a contract. The essence of c

tract law is to enforce the duties or obligations that were mutually agreed u
by two or more parties. Contract law allows parties to an agreement to agree
almost anything. This principle is often referred to as the freedom of contract.
Contracts that are fully performed (nothing remains to be done) are often
ferred to as executed contracts, while contracts that are still being perform
are often referred to as being executory. If parties to a contract cannot reach
a definitive (express) agreement, courts do not look favorably on the allegation
of the existence of a contract. Therefore, agrcements to agree—since th
lack definiteness—are not valid contracts.
On occasion, a court may imply a contract under the theory of quantum'
meruit. Under this theory, the law imputes the existence of a contract based
upon one party having performed services under circumstances in which the
parties must have understood and intended compensation to be paid. This pre-
vents one party from unjustly enriching another party for free. Still, proof of the
existence of a contract under this theory can be a nightmare.

DEFINITION OF A CONTRACT

A contract is a legally binding agreement. A contract represents the meeting of

the minds of the parties. A contract must be serious, definite, and legal (as op-
posed to being for an illegal purpose).
VT LAW ENTERTAINMENT CONTRACTS 53

itandard A ',DRAFTING AN ENTERTAINMENT CONTRACT

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the van-
pie, one Good contract drafters are aware of fundamental contract drafting techniques
ract had and realize that it is an acceptable art to borrow clauses from one contract that
a better may suit the needs of their own agreement. It is important to remember when
acts can drafting a contract that it is often a solid policy to be a pessimist think of what
actition- can go wrong. A rule of thumb for any contract drafter may be to predict what
netimes might go wrong, provide for it in the agreement, and protect your client, who
zder to may be yourself.
duction Though most contracts start out as a beneficial relationship between the
power parties, it is well known that over time attitudes and behaviors can change.
rig. This Therefore, the contract drafter should use exceptional care to ensure that poli-
)mpany cies and procedures are provided for in order to address situations and legal is-
sues that might arise when something does go wrong. Good contract drafters
dustry. protect their client in the event such a situation might occur. Consideration
lty ca1- should be given to alternative forms of dispute resolution (APR), including
to put mediation and arbitration.
?ments
disso-

1111 VALID, VOID, VOIDABLE

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All contracts are valid, void, or voidable. A valid contract is an agreement
f con- that is legally binding and enforceable. A void contract is one that is not
[ upon binding and not enforceable. This may be due to an agreement made for an
ree to illegal purpose, for example. A voidable contract is binding and enforce-
tract. able, but one of the parties to the agreement may exercise their option to
en re- reject the agreement later upon the occurrence of a particular condition. An
irmed option contract, however, is generally considered to be the right of one of
reach the parties to accept a contract at their option for a limited period of time.
:ation Option contracts are very common in entertainment circles (particularly in
they the television industry) since an artist's market value can go up (or down)
during the course of a career, just like the ratings of a particular television
Aun. show.
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the MINORS
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While minors (those under 18 years of age) may generally void contracts at their
41.r.r.r option, in the entertainment industry there are certain statutory exemptions
and conditions related to minors, as will be discussed later in this chapter. Mi-
g of nors are employed in the entertainment industry quite often, and it is important
; Op- to appreciate the role that the law plays in legislating and enforcing contract
law related to minors in this industry.
54 ENTERTAINMENT LAW

OFFER, ACCEPTANCE, CONSIDERATION

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All contracts are subject to the principles of offer, acceptance, and

consideration. Additionally, a contract must be for a legal purpose, and the
parties to the agreement must have the legal capacity or authority to enter into
the agreement. If any of these elements is missing in an alleged contractual re-
lationship, no contract exists.
An offer is made by the offeror (promisor) to an offeree (promisee). The
offeror is the "master" of the offer. This means that the offeror can create the
parameters of the who, when, where, and how of the proposed contractual sit-
uation. Once an offer is made, there are only four things an offeree can do:
(1) Accept (a legally binding contract is created)
(2) Reject (the offer is automatically terminated)
(3) Counteroffer (in which case the original offeror is now the offeree)
(4) Nothing (the law will terminate the contract offer after a "reasonable
time")
Any ambiguities that are created when making an offer will be construed
against the offeror, if an acceptance is made. With the advent of improved tech-
nology such as facsimile and electronic communication (e-mail), contracts can
even be made over the Internet.

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Consideration is the "price of the promise," and it is a vital element of a contract

in the law of contracts. It is the reason a party enters into the agreement. Con-
sideration usually involves the payment of money for a product, service, option,
or the forbearance of an act. Consideration involves an exchange of promises.
In other words, a party to an agreement "gives" something of value to another
when there was no previous obligation to do so.

STATUTE OF FRAUDS
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Certain contracts must be in writing to be enforceable. This is the fundamental

principle established by what is known as the statute of frauds. Historically,
the statute of frauds developed from seventeenth century English law (1677)
known as the English Statute of Frauds and Perjuries. This principle required
that certain kinds of transactions be evidenced by something in writing. The
writing also required a signature by the parties or their agent.
Contracts requiring a record to be enforceable include:
(1) Contracts for the sale of real estate
(2) Contracts which cannot be performed within one year
 LAW ENTERTAINMENT CONTRACTS 55

(3) Contracts in which one party acts as guarantor or surety for another
Vine
party's debts
(4) Under the Uniform Commercial Code (U.C.C.), contracts for the sale
!, and of goods worth more than $5,000.17
nd the (5) Contracts by the executor of a will
er into (6) Contracts in consideration of marriage
.ual re- Contracts that are not put in writing might not be valid if the agreement vi-
olated the statute of frauds. California's Statute of Frauds, found at Cal. Civ.
The Code § 1624, provides that certain contracts "are invalid, unless the same, or
ite the some note or memorandum thereof, is in writing and subscribed by the party to
ual sit- be charged or by the party's agent."18 There only need be some written evidence
lo: of the contract (even a memorandum) which is signed by the party to be
charged. Studios, production companies, designers, and others involved in the
sale of goods in the entertainment industry fall under the purview of the U.C.C.
.ee) Still, since many entertainment contracts involve personal services, the U.C.C.
mable would not apply unless the deal is for longer than one year in duration or if the
contract has options which entitle one party to extend the term of an agreement
strued
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State laws do recognize exceptions to the concept of the statute of frauds. One
example of an exception is termed promissory estoppel. An oral promise
whose enforcement is barred by the statute of frauds might be enforced in a
separate cause of action under this doctrine, if a court is agreeable to it. How-
ever, many courts use this concept only sparingly and in extreme or extraordi-
ntract nary cases only, to avoid unjust results and where an injustice can be avoided
. Con- only by enforcing the oral promise.
ption, Under the doctrine of promissory estoppel, a party who has reasonably re-
nises. lied to his or her detriment based upon another's promise may still be able to
tother enforce that promise (or part of the promise) to the extent of the reliance (out-
of-pocket costs incurred in order to start a project, for example). The plaintiff
must demonstrate that the oral promise was made, however, and this can be ex-
tremely difficult Even if successful, the plaintiff may still not recover the full
benefit of the bargain of the alleged contract, but it still might be worth pur-
suing a claim under this doctrine if there are witnesses and other types of proof
of the existence of an oral agreement.

entaI
STATUTE OF LIMITATIONS
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f,. The The phrase statute of limitations means the time limit set by law during
which a person must bring legal action on a case. Under California law, a party

17 U.C.C. § 2-201 (Revised).

18 New York's version is found at N.Y. Gen. Oblig. Law § 5-701.
56 ENTERTAINMENT LAW ENT

has four years in which to file suit for breach of a written contract.I9 In con-
trast, the statute of limitations is only two years in California, if the contract is
an oral agreement. The limitations period for breach of contract can vary a
lot among the states. For example, it is six years under both Tennessee and
New York21 law, while it is five years in Florida.22 Oral contracts will require
substantially more evidence to overcome the burden of proving that a contract
actually existed.

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In any contract, there must be an underlying theme of good faith (bona fide),
reasonableness, and trust. When a party violates the sanctity of the contractual
relationship or breaches the duties required under the contract, such a break-
down of the contract can lead to litigation. Additionally, ambiguities that are
created when a contract is formed or issues that were not foreseen by a con-
tract drafter can lead to confusion and discord. The offeror has the duty to avoid
creating ambiguities in an offer to an offeree. Otherwise, such ambiguities will
likely be construed against the offeror if brought to court.
It is recognized that when dealing with the sales of goods, the U.C.C. re-
quires good faith when it comes to the buying and selling of goods (tangible
moveable items at the time of sale). However, the U.C.C. does not apply when
it comes to services or personal services contracts. Since the talent in question
is unique, such services cannot be assigned to another person to complete the
same task or obligation.

CALIFORNIA'S SEVEN YEAR STATUTE

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California's Labor Code § 2855 (also known as the Seven Year Statute) limits
the amount of time anyone can be held to a contract for personal services to a
maximum of seven years. This seven year limitation law is known as the De
Havilland law.' Recording artists, however, are not covered in the statute and
can be sued for breach of contract, if they do not live up to their end of the bar-
gain to deliver a minimum number of productions. In 1987, "Subsection b" was
added, which provided a limited exception to the statute for recording con-
tracts. Recording artists are now the only class of personal service workers in
California who cannot take advantage of Labor Code § 2855.

19 Cal. Civ. Proc. Code § 312 et seq.

20 Ienn. Code Ann. § 28-3-101 et seq.
21 N.Y. C.P. L.R. § 201 et seq.
22 Fla. Stat. Ann. § 95.011 et seq.
23 As a result of the favorable ruling handed down by California courts in Olivia de Hav-
Wand's lawsuit against Warner Bros. Studios in 1945, in which her studio contract could
not be extended beyond seven years.
 LAW ENTERTAINMENT CONTRACTS 57

con- PERSONAL SERVICES CONTRACTS

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20 and Contracts to secure talent are usually personal service contracts. A personal
!quire service contract is one in which the parties (or the party to perform) must pos-
ltract sess special knowledge or a unique skill, such that no performance except
that of the contracting party could meet the obligations of the contract. A
celebrity actor, musician, band, author, and so on are examples of personal
service contracts.

esirwas CONTRACT RIDERS

ide),
ictual Sometimes called technical riders, riders, or merely addenda to a contract,
Teak- contract riders include the unique and quite particular aspects of a deal. This in-
it are cludes food, beverage, and lodging accommodations; other individual requests
. con- by talent; stage specifications, light and sound requirements, and electrical
avoid power requirements for set designers; and so on. Some riders can include very
s will thorough (yet extremely ridiculous) requests, though they are usually legal.
The following is an example of a contract rider to a contract for a musical
performance.
.gible
when
stian
CONTRACT RIDER FOR MUSICAL ARTIST
e the
This rider, a legal document, is hereby attached to and made part of the original
contract dated , between ("Artist") and
("Purchaser") for Artist's engagement located at
on this date
Purchaser understands that the items required below are reasonable and
necessary in order for the Artist to provide the best possible show for the Purchaser
and his or her customers. Purchaser also understands that Artist cannot perform
traits without all of the following paragraphs, and that the failure to provide any of the items
to a could result in the Purchaser being held in default of this contract rider. While
?. De flexible, any additions or deletions to this agreement must be signed and dated by
and both parties to be binding.
bar-
was 1. Production. Purchaser agrees to furnish, at his or her sole cost, the
con- following: a raised performance area (stage) which is at least four (4') feet
rs in above the floor of the arena floor or main seating level. This stage is to be
not less than forty (40') feet deep and fifty-six (56') feet wide. It is to be free
of all obstructions and of a sound physical construction. Should the facility
not be riggable, the following additional stage pieces will be required: Two
(2) sound wings, each sixteen (16') feet wide and sixteen (16') feet deep. One
is to be placed on each side of the stage, attached to the stage at the front
(downstage) most edge. Stair units are required for both sides of the stage.
Has-- Small light units are requested for these stair units. A Stage Diagram shall
°WEI be attached to this agreement to visually demonstrate all terms contained
within this Rider.
58 ENTERTAINMENT LAW

2. Consoles. An area not less than twenty-four (24') feet wide by ten (10') feet
deep is to be reserved, with tickets pulled before going on sale, for lighting
and sound consoles. This area is to be at the house center, not less than
thirty (30') feet from the stage. Furthermore, it shall not exceed one-half (1/2)
the length of the arena floor, under any circumstances.
3. Personnel Requirements. The assistance of not less than 12 stagehands,
3 riggers, 4 truck loaders, 1 qualified licensed electrician, 1 forklift operator,
and 2 additional stagehands are required for load-in and load-out. All
personnel related to the production shall NOT be drinking alcoholic
beverages. Any Runner and others involved in transporting Artist must have
a valid driver's license. All machinery should be in the best possible
mechanical/working condition. Plenty of fuel should be on hand. All
precautions should be taken to insure that the machinery is as safe as
possible. Fork is to have minimum lift capacity of 6,000 pounds and a lift
range of 14 feet. Electrician is to be qualified and licensed and familiar with
the venue. He or she must be on hand at all times, and an emergency
number should be available. All of the personnel involved in the production
are to be able-bodied, English-speaking adults. No minors are allowed. A
runner is required for the first call time until the end of the show. The runner
must be able to provide a vehicle that can comfortably fit 6 people. Runner
is to report to Artist's stage manager before and after each run is made.
Purchaser or his or her representative must be present and available from
load-in through load-out and must have copies of this entire contract and
rider during this engagement.
4. Venue. Purchaser agrees that the venue (auditorium, coliseum, theatre or
club) shall be available to Artist's production staff and set-up, at least
12 hours prior to show time. Said venue shall not be open to the public until
1 hour before show time. Loading areas and backstage areas should be
cleared of all vehicles and equipment prior to the arrival of Artist's
entourage. Two clean separate dressing rooms with mirrors, soap, sinks and
36 towels is a must. A shower with hot water and toilet facilities are also to
be provided (portable toilet facilities are unacceptable). These facilities must
be located backstage and away from public access and sightlines. A
production office must be provided for Artist's staff with a direct phone line,
long distance privileges, and cell phones if better served. Parking for
3 buses and two trucks with at least one security guard will be offered
during the performance. If parking is available only on the street, spaces
must be blocked off by 5:00 AM of the day of the show.
5. Lights & Sound. Four spotlights and 8 experienced operators will be
available during the performance to assist in Artist's own sound equipment.
Additionally, 1 400 amp per leg, 208 volt, three-phase service will be provided
within 50 feet of stage left. One 100 amp, 100 volt, single-phase service will
be provided within 100 feet of stage right. Artist's own sound engineer shall
operate the house mixing console. Additionally, colored fill lighting (red,
blue, amber) and dimmer controls must be functional on all stage lighting.
6. Security. Purchaser shall provide an adequate security staff of experienced,
properly trained, unarmed, easily identifiable and nonuniformed personnel
who will work in connection with the Artist's security requests. The security
_AW ENTERTAINMENT CONTRACTS 59

eet must be stationed at the backstage and dressing room 3 hours prior to show
ing time. Four security guards must be available to Artist before, during and
after each performance. Artist will provide all stage passes, which will be
(1/2) the only passes honored in the backstage area. Purchaser agrees that any
passes issued by Artist will be recognized by his or her security personnel.
No person without the proper pass is to be admitted to any nonpublic areas.
tor,
Should the performance span multiple days, security must be provided for
the equipment on a 24-hour basis. Artist retains the right to demand
substitution of any security guard who, in the Artist's sole judgment, is not
ave physically, mentally or emotionally capable of performing their assigned
duties. Purchaser will provide a list of guests to Artist prior to house
opening.
7. Advertising and Promotion. Artist requires only the trademarked, custom-
produced advertising materials be used in their entirety. For radio, Artist will
rith provide at its own cost 1 60-second or 30-second "prosaic" commercial,
1 60-second or 30-second "week of show" commercial, 1 60-second or
on 30-second "day of show" commercial, and, if appropriate, 1 60-second or
k 30-second "welcoming station" commercial. For television, 1 30-second
mer commercial. For newspaper, 13" by 6" ad slick. Plus, 100 four-color posters,
ner 21" by 14" in size. Purchaser agrees not to commit Artist to any personal
appearances, interviews or photos or any other type of promotional purpose
without prior approval. Purchaser shall also not represent that this
engagement is copromoted or cosponsored by any third party without
written permission of Artist. Artist is to receive 100% Star Billing in all
11
advertisement and publicity.
8. Other. Purchaser agrees that there shall be no signs, placards, banners or
itil other advertising materials on or near the stage at any time when the
audience is in the building. During the performance, vending is not permitted
in the audience. Purchaser agrees to make building and concessions
and management aware of these requirements. Additionally, the recording,
to broadcasting or filming of the live performance will not be permitted unless
-nust previously authorized in writing, including the working press backstage. This
prohibition applies to patrons as well. Artist does not perform in the round.
ne, There shall be no intermission and Artist will play between 60 and
90 minutes.
9. Merchandise. Artist shall have the right to sell merchandise at the show
site on the day of the show. No other sales or distribution of material
pertaining to Artist will be allowed without prior written consent. Buyer
agrees to provide adequate space for Artist or designee to vend such
,nt. material.
ided 10. Master of Ceremonies. No announcer or Master of Ceremonies (Emcee)
shall appear without prior approval by Artist or stage manager.
all 11. Tickets. Purchaser is to use no more than 50 complimentary tickets for
advertising or working press. All (any) unused tickets shall be returned for
sale to the public no later than 2 hours before the performance.
;ed, 12. Force Majeure/Inclement Weather. Artist's obligation to perform is
31 specifically subject to (i.e., conditional upon) cancellation due to sickness,
rity physical injury (or other inability to perform), accident, and considerable
60 ENTERTAINMENT LAW Er

delay in transportation to venue, fire, riot, strikes, or any other unexpected

interference with the performance of the show. Purchaser shall not be
responsible for payment to Artist for any other fee other than the
relinquishment of the down payment (previously paid) in the event such
occurrence characterized by Artist as a force majeure or Act of God are
raised. However, in the unfortunate event that the show cannot be
presented due to weather, Artist must still be paid in full. Determination of
whether any weather conditions shall render the performance(s) unsafe
must be made in good faith but is at the sole discretion of the Artist.
13. Times. Show times may only be changed with Artist's written approval.
14. Amendment. This agreement may be modified up to 30 days prior to the
show. Any modifications must be in writing, signed by both parties.
15. Cancellation. Artist shall have the right to cancel the performance, without
any liability, upon written notice to the Purchaser, not less than 30 days prior
to the date of performance.
16. Payments. All payments must be made in the form of a cashier's check made
payable to:
. Down payments must be received by
in accordance with the agreement that this
contract rider amends.
17. Gross Receipts. The term "gross receipts" shall mean box office receipts
less federal, state or local admission taxes; commissions and discounts in
connection with season ticket sales, credit card charges, remote box
offices, parking fees, food, merchandise or other concession income.
18. Insurance. Purchaser agrees to provide public liability insurance coverage
to protect against injuries to persons or property prior to, during, and
subsequent to the performance. This comprehensive policy must cover not
less than Two Million Dollars ($2,000,000) per occurrence. Artist shall be
individually covered under this policy as well and paid for by Purchaser.
Purchaser also agrees to maintain worker's compensation insurance for all
of its employees. Insurance for Force Majeure and "Act of God" is highly
recommended as Purchaser risks cancellation due to the aforementioned
acts but only in good faith.
19. Hospitality Meals. Purchaser shall provide the following for the Artist:

Six Hours Prior to Performance

Please place all perishable items on ice or keep refrigerated.
Ten (10) Bottles of room temperature bottled water (noncarbonated only)
Full Roasted Coffee and tea set—to include real ceramic coffee mugs
Honey
Variety of Teas/herbal
Spoons
One (1) 6-pack of Coke or Pepsi (not diet)
One (1) Pint of Whole Milk
One (1) Gallon of Skim Milk
One (1) Box of Honey Smacks cereal
AW ENTERTAINMENT CONTRACTS 61

d One (1) Package of Mozzarella or Cheddar Cheese

One (1) Bottle of Echinacea Capsules
One (1) Small Fruit Platter of Raspberries, Blueberries, Strawberries, Plums
and Whole Bananas
One (1) Small Tray of Fresh Roasted Turkey, Chicken and Roast Beef Deli
Only (No pressed or processed meats)
f
One (1) Small Veggie Tray with Carrots, Cherry Tomatoes, Red Peppers,
Cauliflower, Celery, and Blue Cheese Dip
Assorted Raw Almonds, Banana Chips, Dried Cranberries
Assortment of energy bars of various brand names
One (1) Small Bottle of Multivitamins
lit One (1) Small Bottle of Chewable Flintstones Vitamin "C" Tablets
nor One (1) Small Cheese Platter with Cheddar, Jack, Gouda and Swiss
Platter Assortment of Gums and Mints
ade One (1) Roll of Film/200 Speed Exposure
Six (6) Clean Large Bath Towels
Display of Fork, Knives, Spoons, Plates (Not Plastic)
One (1) 1/2 Pint of Fat Free Small Curd Cottage Cheese
One (1) Container of "Coffee Mate" Non-dairy Creamer
-1 Twelve (12) Solo Cups
Four (4) votive candles with matches
Two (2) Chicken or turkey club sandwiches (white bread with bacon, lettuce
le and tomato)
No less than six (6) bottles of water
ot
Chocolate chip or Oreo cookies

After Performance
Twelve (12) bottles of very cold water
Eight (8) bottles of ice-coffee
Eight (8) cans of diet cola
Two (2) 6-packs of other assorted soda and ice teas
Fresh made deli sandwiches: assorted turkey, roast beef or chicken
Fresh Fruit
Cookies

Signatures:

AGREED (sign and date):

Purchaser

Artist
62 ENTERTAINMENT LAW ENT1

1p MINORS AND ENTERTAINMENT CONTRACTS

As in all industries, children employed in the entertainment industry receive spe-
cial treatment under the law. The entertainment industry deals with contracts to
persons under age 18 regularly. Under general contract law principles, minors
may void or disaffirm contracts. States such as New York, California, Florida, Ten-
nessee, and others have enacted laws that govern entertainment contracts with
minors since minors (or sometimes described as infants) may disaffirm con-
tracts. Minors often serve as models in commercials and advertising media Hun-
dreds of famous child actors have benefited from the entertainment industry's
reliance on minors for the generation of revenue and profits. Unions such as SAG,
AFTRA, and the Actors Equity Association (AEA) have adopted special work
rules that may apply to minors in connection with their services in the industry.
Child actors of all ages are thrust into an often harsh world with complex
issues. While the rust child labor laws in the United States were passed in Mass-
achusetts in 1836, the advent of the industrial revolution and growth of cities
and factories forced other states and the federal government to pass laws that
focused on employment of children, including wages and working conditions.
Both New York and California have specific laws that regulate minors' em-
ployment in the entertainment industries. California's regulation is the most
comprehensive.

California
In 1927, California became the first state to regulate minors' contracts in enter-
tainment. Similar to the Talent Agencies Act, California has adopted statutes
that protect minors' contracts in the entertainment industry.2A Minors' contracts
are regulated in two sections: §§ 6750-53 of the Family Code and § 2855 of the
Labor Code. California's law governing minors includes services of an "actor,
actress, dancer, musician, comedian, singer, or other performer or entertainer,
or as a writer, director, producer, production executive, choreographer, com-
poser, conductor, or designer."26 The California superior court system must ap-
prove or disapprove of minors' contracts. If the Superior Court affirms a minor's
contract, the minor cannot disaffirm it.
Under California law, there is no limitation on the length of the term of a mi-
nor's contract, and there is no requirement that a limited guardian be ap-
pointed. Under California law, a maximum of only 50 percent of net earnings
will be set aside in a blocked account until the infant becomes 18 years old
(New York has no limit on what portion the court sets aside).26 California courts
would have jurisdiction over the action if the minor either resides or is em-
ployed in California or if any party to the contract has its principal office in that
state. The maximum term of a minor's employment pursuant to an entertain-
ment employment contract is seven years, similar to California's Seven Year

24 California laws related to child actors are often referred to as Coogan's Law, named af-
ter Jackie Coogan, a silent-picture child actor in the 1920s whose earnings disappeared.
26 Cal. Fam. Code § 6750(a)(1).
26 Cal. Fam. Code § 6752.
- LAW ENTERTAINMENT CONTRACTS 63

Statute. Once the minor turns eighteen years old, he or she may apply for the
money in that account. Also, the Family Code entitles the minor's parents to the
earnings of their child (the other 50 percent) under § 7500 of the Family Code.
spe-
icts to
iinors New York
L, Ten- New York law also provides for judicial approval of certain contracts for ser-
;with vices of minors.27 In New York, the Child Performers Education and Trust
CCM- Act of 2003 was sponsored to reflect California's laws. The provisions of the
Hun- statute specifically relate to performing artists and professional athletes. A pro-
stry's ceeding for judicial approval of a minor's contract is commenced by the filing
SAG, of a verified petition by a parent, the guardian, a relative of the infant, or any in-
work terested person on the infant's behalf. The petition may be made to the Supreme
stry. Court or the Surrogate's Court in the county in which the infant resides. Ap-
iplex proval of the contract may be withheld until the parent(s), who may be entitled
dass- to the minor's earnings, or the infant, if the infant is entitled to those earnings,
ities consents to set aside a portion of the infant's earnings and place them under the
; that control of a guardian pursuant to court order in a net earnings account. Net
ions. earnings are defined as gross earnings less taxes, support, care, education,
em- training, professional management, and reasonable fees and expenses paid in
nost connection with the proceeding, the contract, and its performance.28

IIIMANCIPATION OF MINORS
4"444)104111aatzl) 010116,60#0 PAiiiirx oo +istitkfPt8VVMIEWV8'i4Etf4tcriMSI.S..otgA4LkEP_MV_*i, 1.0.15.40.A.*MMILRAP.E..11.2aP.Itht!il 4:11V..5==2Lag2'
iter-
utes
acts In California, emancipated minors may enter binding contractual agreements,
'the Cal. Fam. Code § 7050(e)(2). Emancipated minors are those who have gone
tor, through court proceedings to be legally separated and freed from the control of
ner, their parents. In California, minors seeking employment in the entertainment
om- industry must also obtain an Entertainment Work Permit. They must obtain
ap- written verification from the appropriate school district that the minor has sat-
or's isfied that district's requirements with respect to age, school record, atten-
dance, and health. The permit is not valid for more than six months, Cal. Admin.
mi- Code Title. 8, § 11753(a) and (b). In New York, the termination of parental rights
ap- is found in Soc. Serv. Law §§ 384—b 358—a(3)(b).
rigs
old
irts Il
TERMINATION OF A CONTRACT
, ..,--!.
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emainfailikoloraitaiiiRIW444404114111RWRIEEVIE12g.U.11=1:101:1=M;IKKRI-SiiiiaWiaktillt4Uttos*PROAVV.E.retiili

hat
Lin- A contract may end when each party to the contract simply does what they
aar promised to do. Another way to terminate an agreement is by contract, when
each party agrees to end the contract prematurely. In the event one party breaks
(breaches) the contract or unilaterally cancels the contract, litigation or other
af- form of dispute resolution may be necessary to enforce the agreement.
ed.
27 N.Y. Arts & Cult. All. Law § 35.03 et seq.
28 N.Y. Arts & Cult. Aff. Law § 35.03(3)(c).
 ENTERTAINMENT LAW

GES AND REMEDIES FOR A BREACH OF CONTRACT

ClaaillailfallMCC =IL Mr•=11 It IMEPIE251111111/1110.11PA slittillWrarmire au= a': MUNZZ.MILI

Generally speaking, when there is a breach of contract, contract law uses a va-
riety of methods to repair the damage. Courts attempt to place the injured party
in the position that he would have been in had the contract been performed. Ex-
amples of breach of contract are numerous in the entertainment industry. Tal-
ent agents not being paid by their artists, allegations of miscalculations of
royalty payments by musicians, and studios seeking monetary damages for fail-
ure of a designer to prepare a set are all examples of breaches of contract.

Remedies

There are several kinds of contract remedies available when a breach of con-
tract occurs:
(1) Compensatory damages
(2) Specific performance
(3) Consequential damages
(4) Liquidated damages
(5) Punitive damages

Compensatory Damages. Compensatory damages can be defined as the

amount of money necessary to make up for the economic loss caused as a re-
sult of the breach of contract. Monetary damages are intended to compensate
the plaintiff for losses suffered as a result of a breach of contract. General
damages or noneconomic damages include compensation for pain, suffering,
mental anguish, disability, and disfigurement. Special damages or economic
losses consist of medical expenses, loss of income, and other direct economic
losses.

Specific Performance. Specific performance is an order by the court re-

quiring the party that breached the contract to perform its obligation. Similar to
an injunction, specific performance orders performance, whereas an injunction
orders nonperformance. Assuming a court orders specific performance as a
remedy to a breach of contract, the breaching party must do what it agreed to
do in the contract. This remedy is not afforded to personal services contracts,
since forcing talent to perform would constitute a modern-day form of enslave-
ment or involuntary servitude. However, sales of goods and products could cer-
tainly fall within the scope of specific performance as a remedy.

Consequential Damages. Consequential damages are economic losses

caused indirectly by a breach of contract. Consequential damages are those
which arise from the intervention of "special circumstances" not ordinarily
predictable. As a general rule, they are compensable only if it is determined that
the circumstances were within the contemplation of both parties at the time the
contract was executed and therefore foreseeable by both. When an alleged
breach of contract is an unexcused delay in completion of a project or per-
formances, for example, damages as a result of the delay (or breach) could be
recoverable.
 •LAW ENTERTAINMENT CONTRACTS 65

Liquidated Damages. Liquidated damages are damages specified in the

onwomm
contract itself and are often referred to as "agreed-upon" damages. These dam-
ages are a sum of money agreed upon by both buyer and seller prior to contract
3 a va- signing as a substitute for actual damages for breach of contract. This sum is to
party be paid in lieu of actual damages in the event of a specific contract breach.
d. Ex- While not considered a penalty, the parties to the contract do agree prior to the
Tal- performance of the contract what the damages would be for a breach. Liqui-
ins of dated damages clauses are wise considerations for contract drafters in any con-
)r tract case since it provides certainty for damages by the parties to a contract.
t.
Punitive Damages. Punitive damages (sometimes called exemplary dam-
ages) are damages that punish the wrongdoer in a tort or personal injury ac-
U con- tion. Usually punitive damages are not recoverable in a contract action since
the goal of contract law is to make "whole" rather than to punish (the goal of
the criminal law). Also, unlike compensatory damages, punitive damages are
not based on actual economic loss but are designed to make an example out
of a party for wrongful (and sometimes intentional) misconduct. Such dam-
ages are often used to prevent a future breach by the same parties and/or to
send a message to the community (or society) at large that such conduct is
unacceptable.
s the
a re-
nsate
MITIGATION OF DAMAGES
ieral ilifilf/JRAMEa+g
_WWVIVRASMISklikiii-ArAiiidikialsOtElltVivalsCaStagrx==aralanraiiZaar48

omic The duty to mitigate damages means that the victim of a breach of contract can-
omic not simply let economic losses pile up and later sue the other party to pay all of
those losses as well. The victim of a breach of contract must attempt to reduce
the amount of economic loss. Failing to reduce one's damages leads to waste
rt re-
and is not favored by courts.
ar to
:ton
as a
xl to
WAIVERS
acts, ZW/WZIVAINIF.444e7i4 it 21 :!ifit2N211=251=====.204MR1511.11gliaMISISerZIW.luggintgliallIWIIIMIC
[ave-
cer- A waiver is the voluntary relinquishment of a privilege or a right. Good contract
drafters often include waivers in any express agreement. Waivers or release of
liability is a clause in a contract or its own document designed to protect a party
sses from legal liability for injuries that may occur to others. Waivers may be used
lose as protection from liability for accidents, activities carrying certain inherent
uily risks, and even ordinary negligence or other unintentional conduct in certain
that circumstances.
the To avoid liability for defamation and invasion of privacy claims (discussed
!ged
in greater detail in Chapter 4), a cormnon waiver/disclaimer for fictitious
per- works—based more on tort law than contract law—found in motion pictures,
i be television, and publishing industries includes a conspicuous waiver such as the
following: "The characters and events depicted in this motion picture are fictional.
111 ENTERTAINMENT LAW

Any similarity to any actual person, living or dead, or to any actual events, firms,
and institutions or other entities, is coincidental and unintentional."29

Tickets and Waivers

In theatres, concert halls, arenas, and elsewhere, ticket holders are entitled to
observe an event. However, ticket holders always risk getting injured when so
many people gather together. Often printed on tickets are disclaimers (excul-
patory clauses) of liability in the event of injury during an event. Disclaimers
are sometimes short and simple, while other times the waiver might be long and
complex.
A ticket might display the following waiver, for example.

Holder voluntarily assumes all risks and danger incidental to the event for which the
ticket is issued, whether occurring prior to, during or after the event, including, but not
limited to, the danger of being injured by thrown, batted, kicked, shot, struck, by
objects such as instruments, equipment, and flying objects, or by other spectators or
performers. Holder voluntarily agrees that the management, facility, venue,
participants, clubs, and all of their respective agents, officers, directors, owners and
employees are expressly released by holder from any claims arising from such activity.

Courts generally do not uphold ticket stub waivers as a matter of public pol-
icy. Plaintiffs can challenge the enforceability of express assumption-of-risk
language on the back of tickets in several other ways, including that the dis-
claimer was not clear or conspicuous, the spectator was not notified of the lan-
guage on the ticket and therefore there was no agreement, there was no
signature by the ticket holder, and the conduct that caused injury was grossly
negligent or reckless which cannot be waived. Waivers on the back of ticket
stubs might serve as a deterrent to a plaintiff suing but are not usually an effec-
tive complete defense to a claim of negligence.

ILCOLLECTIVE BARGAINING AGREEMENTS

A collective bargaining agreement is a contract that spells out the terms of

employment between a labor union and an employer. This negotiated contract
between a labor organization and the employer concerns wages, hours of work,
and all other terms and conditions of employment. This also includes provi-
sions for grievance and arbitration if there are disputes over the contract. Col-
lective bargaining agreements are often the by-product of serious negotiations

29 See, e.g., Smith v. Huntington Publ. Co., 410 F. Supp. 1270, 1274 (S.D. Ohio 1975),
where no reasonable person could have believed an article was about plaintiff when
there was even a statement by author in boldface print that names used in article were
fictitious), aff'd mem., 535 F.2d 1255 (6th Cir. 1976).
LAW ENTERTAINMENT CONTRACTS 67

inns, in the entertainment industry and include examples, as discussed further in the
text, such as the Screen Actors Guild, Writers Guild, and Directors Guild Basic
Agreement.

?cl to
so
:cul- IIBANKRUPTCY AND CONTRACTSEmenEvri.znimg,fut.
,.. 4 t 41 itsallill&Mrar.",..40111“041Wiffiktalreiret
—iiiiiiiirsibiraNSfia 0 .,t..t 4: wol",fa 4;* ktt,2`..gt::::fL2::::.:.;:t a hlt.:-Iltit HEIL/ 2112.2.1.1 it,:isitii.6 itiiii&
Tiers
and Voluntarily petitioning the bankruptcy court in federal district court for talon-
cial relief is usually an option for debtors who cannot live up to their contrac-
tual obligations for various reasons. Bankruptcy courts are quite lenient for
petitioners, but the trustee in bankruptcy has great power. Whether Chapter 7
(liquidation) or Chapters 11 and 13 (reorganization), the trustee has the ulti-
le mate say as to whether to discharge contractual obligations owed to creditors.
not Once a petition for bankruptcy has been made, all creditors must immediately
stop pursuing collection of their debts under the concept of the automatic stay
or (11 U.S.C. * 362). The trustee in bankruptcy then is in charge of handling the pe-
tition and the bankruptcy estate.
id
vity.

IR IN RE CARRERE
; 71:4====latiCSISIMIERSITNiediaallagitrifiabillukullat irkbit CUM gradtt&aft .Igt 1: tt N2:1111ff .1...en ftr. en IT.am r.:12:14::Ism uum .tee fote ix ugeruntionotisasszamvAugai

pol-
risk The case In re Carrere, 64 B.R. 156 (Bankr. C.D. Cal. 1986) represents a failed
dis- attempt to use the bankruptcy courts to reject an otherwise legitimate con-
Ian- tract.30 Actress Tia Carrere filed bankruptcy under Chapter 11 of the bank-
no ruptcy code in an attempt to reject an executory contract (pursuant to 11 U.S.C.
;sly § 365). The purpose of her filing bankruptcy was to avoid a personal services
ket contract and to pursue a more lucrative one with another television show. In
'ec- August 1985, Carrere entered into a personal services contract with American
Broadcasting Company (ABC), agreeing to perform in the television series
General Hospital from that time until August 1988.
While the contract with ABC was still in effect, Carrere agreed to make an
appearance on the television show A Team. Under the terms of her agreement
with Steven J. Cannell Productions, if she became a regular on A Team, she
would make more money than on General Hospital. In March 1986, Carrere
of filed her voluntary bankruptcy petition under Chapter 11 and attempted to re-
act ject the ABC contract. Carrere made it clear (in the court's eyes) that her pri-
rk, mary motivation in seeking the protection of this court was to reject the
ij-
contract with ABC in order to make more money. ABC felt that the bankruptcy
o1- petition was filed in bad faith. Ultimately, the court denied her motion and noted
ins that it would not be fair to allow her to file for bankruptcy for the primary pur-
pose of rejecting this personal services contract.
5),
.en
re
30 1n re means "In the matter of" or "Regarding" in Latin.
68 ENTERTAINMENT LAW EN

CHAPTER SUMMARY
Understanding the fundamentals of contract law in contractual agreements these days, even if they are 1
any industry is vital. While contracts generally may be sometimes more efficient than written contracts.
oral or written, having a written agreement is impor- Many contracts are boilerplate. One of the unique as- 2
tant especially if a party to the contract ends up pects of entertainment contracts is the appreciation
breaching the arrangement. Some members of Holly- for the role that minors play in this industry. Several 3
wood continue to prefer to do business with "hand- states have drafted laws that are specific to minors
shake deals," but there is a trend away from unwritten and entertainment contracts.
4
CHAPTER TERMS
5
Acceptance Compensatory Guarantor Reckless
Addenda damages Guardian Release
Agreements to agree Consequential Handshake deals Riders
Alternative dispute damages Infants Seven Year Statute
resolution (ADR) Consideration Liquidated damages Special damages
Arbitration Conspicuous Mediation Specific performance
Assigned De Havilland law Meeting of the minds Statute of frauds
Automatic stay Disaffirm Negligence Statute of limitations
Basic Agreement Disclaimers Offer Surety
Benefit of the bargain Emancipated Offeree Technical riders
Boilerplate Entertainment Offeror Tort
Bona fide Work Permit Option Uniform Commercial
Breach of contract Exculpatory clauses Option contract Code (U.C.C.)
Capacity Executed Oral contracts Valid
Child Performers Executory Promissory estoppel Void
Education and Trust Exemplary damages Punitive damages Voidable
Act of 2003 Freedom of contract Quantum meruit Waiver
Collective bargaining General damages
agreement Goods

ADDITIONAL CASES
Columbia Pictures Corp. v. De Toth, 197 P.2d 580 MCA Records, Inc. v. Newton-John, 153 Cal. Rptr. 153
(Cal. Ct. App. 1948) (CL App. 1979)
Coppola v. Warner Bros., No. B154280, 2003 Cal. Metro-Goldwyn-Mayer, Inc. v. Scheider, 360 N.E.2d
App. Unpub. LEXIS 1782 (Ct. App. Feb. 25, 930 (N.Y. 1976)
2003) People ex rd. Cort Theatre Co. v. Thompson, 119 N.E.
Danforth v. Cohen, 498 U.S. 1103 (1991) 41(111. 1918)
De Havillancl v. Warner Brothers Pictures, 153 P.2d PMC, Inc. v. Saban Entm't, Inc., 45 Cal. App. 4th 579
983 (Cal. Ct. App. 1944) (1996)
Effects Assoc., Inc. v. Cohen, 908 F.2d 555 (9th Cir. Scott Eden Mgmt. v. Kavovit, 563 N.Y.S.2d 1001 (Sup.
1990), cert. denied, 498 U.S. 1103 (1991) Ct. N.Y. County 1990)
Johnston v. 20th Century-Fox Film Corp., 187 P.2d Warner Bros. Pictures, Inc. v. Brodel, 192 P.2d 949
474 (9th Cir. 1947) (Cal. 1948)
Ketcham v. Hall Syndicate, Inc., 236 N.Y.S.2d 206 Warner Bros. Pictures, Inc. v. Bumgarner, 17 Cal.
(Sup. Ct. N.Y. County 1962) Rptr. 171 (Ct. App. 1961)