CONTRACT
Record Labels, Artists, Music Publishers

Rapper Ras Kass (real name John Austin) has filed suit against Priority Records, Capitol Records, EMI Music and two Priority executives, claiming breach of contract, unfair competition, restraint of trade and other abuses. The suit, filed in California Superior Court in Los Angeles, seeks a rescission of the musician’s contract, and compensatory and punitive damages to be determined. According to the suit, in 1995, Austin, who was then a 22-year-old Patchwerk Records artist, signed a contract with Priority requiring delivery of one album, with an option for five more albums.
The action claims that Priority failed to market and promote the albums “Soul on Ice” (1996) and “Rassassination” (1998). It also alleges that two Priority executives maliciously interfered with Austin’s career. The suit further alleges that the releases of Austin’s third and fourth albums were sabotaged, and that Priority interfered with a proposed group project for Sony that would have featured Austin, Xzibit and Saafir. According to the suit, owing to “fraudulent accounting practices,” Austin has received only $100,000 during the nine years of his contractual agreement, an average of approximately $11,000 per year. The 32-page filing broadly excoriates standard record-industry practices, and calls Austin’s contract “unconscionable.” It also claims that recording artists do not receive adequate protection under section 2855 of the California Labor Code, which prohibits the enforcement of personal-service contracts after seven years. Entertainment contracts are broadly exempt from this section in California although this position is under review by the Californian Senate.

COMMENT : This action has some similarity to the 1994 ‘George Michael’ case in the UK when Michael took on Sony Music Entertainment in attempt to free himself from a contract for personal services. In that case, Michael failed because an earlier contract amendment had been made to settle potential legal actions. However, in that case, Mr Justice Parker identified the main issues which can blight exclusive record agreements. All exclusive contracts for personal services contain some degree of restraint of trade. Where terms are unreasonable the courts will find the contracts void and set them aside.

For more information in this area of COPYRIGHT on Law Updates see:
Law Updates May 2004 Maverick launches legal action against Warner Music
Law Updates October 2003 Jackson falters in suit against Motown and Universal
Law Updates June 2003 US Court hammers Majors accounting practices
Law Updates June 2003 Michael Jackson launches action against Motown
Law Updates June 2003 California Senate to consider draft law to oblige record labels to calculate royalties

You can see the Recording Artists’ Coalition comment on ‘Recording Industry Practices’ athttp://www.recordingartistscoalition.com/rip.html

Panayioutou v Sony Music Entertainment (UK) Ltd (1994) ECC 395
ZTT Records & Perfect Songs Limited v Johnson (1993) EMLR 61
Armatrading v Stone (1994) (in Bagehot & Kannaar [1998] Music Business Agreements)
A Schroeder Music Publishing Co Ltd v Macaulay (1974) 3 ALL ER 616