In a Word document, explain the following about your chosen contract:
Identify the strengths and weaknesses of the contract (at least 5 strengths and 5 weaknesses). Be sure to choose clauses as your strengths and weaknesses, such as: Engagement or Term.
Explain why each is a strength or weakness from the point of view of either party you choose (at least a short paragraph for each).
Which clauses would you change? Put them in order of priority.
Explain why and how you would change each one.
Company and Artist Contract
The 360 deal illustrated in the Limited Liability Company agreement between the company and the artist has several strengths. They include the engagement clause, severability section, attorney fees part, the choice of law and the warranties phrase. On the other hand, the weaknesses associated with this contract arise from several clauses such as terms, time of performance, indemnification, general rights, and the accounting clause.
The engagement section requires the company to apportion a minimum of &250,000 to cater for resources and services require for the entire music production and deal shopping activities of the artist. This will help the musician in career development. Similarly, it benefits the company since it is entitled to special rights of shopping artist for arrangements with other companies concerned with music matters.
Moreover, the severability part of the agreement upholds execution of the contract even when a particular part of it is invalidated. In such circumstance, the invalidated part will be excluded from the agreement and the remainder shall be implemented as initially planned. Therefore, it benefits both parties.
Besides, the attorney fees clause is strength to the company. If the artist goes against the rules of the agreement and legal procedures are followed, the party shall refund the company 50% of the legal fees. Furthermore, if the company spends more than $10,000 to solve the issue and the artist refuses to agree on the settlement suggested, there will be full compensation to the company.
Correspondingly, the choice of law used benefits both parties. The contract is legally enacted and interpreted by the laws of the State of California. All parties in the contract are pursuant to California Labor Code sections 1700-1705, thus they should fulfill their responsibilities as defined in the contract.
Equally, the warranties segment does not limit the artist to the company’s agreement only. The artist can enter into any other contract of choice but ensure that he satisfies the obligations in the company’s contract. Hence, the musician can enter into agreements with third parties.
On the contrary, the term clause is a weakness to the contract. The company is entitled to 50% of the revenue earned by the artist on all the industrial activities and not limited to the agreement. Third parties are also required to pay to the company so that it can get its share. This oppresses the musician.
Additionally, the time of performance exploits the artist. All the music related matters of the artist are under the contract duties. Therefore, the company cuts the 50% share on all the payments. This hinders the artist from planning for own performance and activities.
Furthermore, indemnification creates uncertainty of payable money to the artist. In case indemnity, the agreement releases the company from potential liability. It holds payable funds to the artist and also requires the musician to refund 50% for losses and expenses incurred.
More so, the general rights clause weakens the ability of the artist in this contract. The inequality of rights makes the artist to seem like a minor in the agreement. The company is entitled to more rights than the artist thereby weakening the contract.
Finally, the accounting clause interferes with the personal finances of the artist. The agreement requires auditing of the artist’s payment records even with third parties which compromises privacy of other agreements.
I would change the general rights clause, the terms and indemnity sections to enhance the freedom and financial security of the artist. The musician should have equal rights with the company so that the benefits are shared equally. Moreover, the terms of the contract should only be limited to the agreement and not include the action of the artist and third parties. Thus, the company should neither get a share of payment received from third parties nor should the payment be made directly to it. Lastly, the indemnification clause should be adjusted to incorporate the company in case of indemnity. It should be liable to half of losses incurred while the artist holds the other half.
