What Constitutes a Band Agreement?
A band agreement is essentially a legally binding contract made between each member of a band. They define the rights and responsibilities of each member, including how the proceeds from record sales will be divvied up as well as how much every person in the band can expect to be paid for live performances and song writing.
They can also cover how work for hire fees can be divvied up in relation to songs, whether or not royalties will be paid, how to divide studio time and how many decisions must be made unanimously. Essentially , any matter in relation to how you and your band mate’s careers will be run should be outlined! This can save you and the members of your band a lot of heart ache later on down the track.
Having said that, the reality of band agreements is that no two bands are the same, so their agreements will obviously differ as well. Some bands may not be making enough money to need to put a legally binding contract in place, while some bands may not ever be making their agreements legally binding. However, the point is that having a band agreement at all is in your best interests.
Key Components of a Band Agreement
When creating their band, musicians often don’t think about the legalities. However, it is best practice to address any issues that may arise in the future before they happen. This means, of course, setting expectations up front about how the band will run as a business, what happens if and when someone leaves the band, or if new members join, how money will be split, and who gets credit for songwriting and royalties. Basically, everything that could go wrong should be explained in writing so that there is no room for discussion down the road. Writing everything out and having a conversation about these important topics allows you to be prepared for the future, and prepared to protect your rights and those of your fellow band members.
Although no band member expects something will go wrong with their collaboration, addressing the following specific issues now relieves confrontations and unhappy band members in the future:
It’s clear that if you are going to work together, you need a specific agreement that covers all of the above. Although it’s possible you don’t yet have details to fill in for some of these issues (for example, you may not know how much money you will make), it is helpful to have the outline on paper to which all parties can add more information as it becomes available. It is strongly advised to create a collaborative band agreement template that includes these key elements, and to ensure that all band members read and sign it.
Why Bands Should Have a Written Agreement
When a band first gets started, they are likely focused on finding gigs, making an album and getting paid. Writing down a band agreement is usually the last thing on the to-do list. But it’s actually one of the most important steps you can take, both for the stability of the business that you’re setting up and to avoid any drama down the line.
A band is a business. And a business needs to protect itself legally.
When you’re not running a business professionally, the agreements are a little more flexible and unofficial. You can perform for free, share merchandise, and make contractual decisions by word of mouth or handshake agreement. If you’re only doing this less-than-professionally as a weekend hobby, there’s nothing wrong with it.
However, a workmanlike approach is probably the easier path to legal trouble. When money is involved, boundaries need to be clearly set for ownership, revenue sharing, and intellectual property ownership. Otherwise, the band could lose its members and the business could be lost forever.
It protects all the members equally.
When establishing boundaries with a verbal agreement, the relationship between the band members can get "sticky." A member may feel as though they’re not getting their fair share, and that member is less likely to continue their commitment. Miscommunication between the band members is possible, and when a dispute arises, it’s difficult to come to an agreement when the terms of the deal have not been outlined.
This is why a written band agreement template is so important. A written agreement ensures that all members have the same expectations, and that all members are treated equally.
The written agreement will clarify each member’s contribution and role within the band, so that if someone ever tries to claim that they weren’t getting equal pay, or weren’t on the same level of revenue sharing, the contract will be able to prove it.
It helps maintain objectivity.
When a band first gets started, the relationship between the members may be very informal. It’s possible that some band members will be closer to the others, and if the business arrangement is very casual, it can lead to disputes about how the business should be run.
How to Write a Band Agreement Template
Creating an effective band agreement template requires careful consideration of the specific needs and dynamics of the band. Drafting a custom band agreement template can be done by following these steps:
1. Define the Purpose
Begin by clarifying the goals of having a band agreement template, such as protecting individual rights, outlining group responsibilities, or preventing disputes over intellectual property.
2. Identify Key Issues
Consider the common areas of conflict within a band—in areas like revenue sharing, songwriting credits, and decision-making—and how the band agreement template will address them.
3. Consult with All Members
Engage band members in the drafting process to ensure that the band agreement template reflects the group’s collective understanding and agreement on the key issues.
4. Research Legal Requirements
Familiarize yourself with the legal requirements for constituting a band—such as the need for legal recognition, how the band will be taxed, and whether any federal regulations apply to the band’s activities.
5. Draft the Agreement
Using the information gathered through consultation and research , write a draft of the band agreement template that includes the key agreements reached by the band members and covers the necessary legal requirements.
6. Review and Revise
Share the draft band agreement template with all band members for their review and feedback. Revise the draft as necessary to incorporate the feedback and reach a consensus.
7. Seek Legal Advice (if necessary)
For bands considering forming a legal entity or dealing with more complex matters, consult with an attorney to review the drafted band agreement template and get professional advice on the legal implications of the agreements reached.
8. Finalize the Agreement
Once it’s been reviewed and approved by all members and/or their legal representatives, finalize the band agreement template by signing it and storing it in a secure place.
9. Keep It Updated
As the band evolves, the band agreement template might need to be revised to reflect changes in individual roles, revenue structures, or legal compliance. Regularly revisit the band agreement template to update it as necessary.
By following these steps, bands can create an effective and comprehensive band agreement template that helps protect the interests of all involved and potentially prevent conflicts before they arise.
Common Pitfalls to Avoid
While creating a band agreement template may seem tedious, even the smallest detail works to protect you if a dispute arises. Given the nature of the business, it is likely that your band will not have a commercial lawyer, such as Lawyer Up, review or draft your bands agreement. While this is totally understandable, it is important to know and understand some of the common mistakes bands make when putting their agreement together. Below are some issues that you should look out for:
Vague Terms
You want your band agreement to be clear and concise. That doesn’t mean it can’t be detailed, it just means that all parties should agree on the meaning of each term in the agreement. If the terms are confusing or vague, it can lead to a number of disagreements between parties. Consider defining some of the key terms in your agreement so that all parties can reference the definition.
Disengaged Parties
One way to ensure that your band agreement is representative of the expectations and understanding of all parties is for all members to participate in the creation of the agreement. It’s possible that you will not have the luxury of having 100% participation in the creation process, but if several parties are not engaged in the process it makes it much harder to enforce the agreement in the event there is a dispute.
Helpful Hint: If bringing everyone to the table is a challenge it may be worth it to hire a mediator to help facilitate your agreement negotiations.
Unenforceable Clauses
Agreements are generally assumed to be enforceable. That is why it is important to get legal advice on your agreement so that all the provisions in the agreement comply with all relevant laws and regulations. For example, is there a limitation on liability that may reduce the amount of damages that a party can recover in the event of a breach? If so, be sure that this complies with state and federal law.
Helpful Hint: Guidelines relating to your agreement may vary from state to state; consult both state and federal guidelines to ensure compliance.
Incomplete Agreement
Sometimes an incomplete agreement becomes an enforceable agreement if the parties have performed under the agreement. For this reason, it is important that once your band agreement is finished all parties have time to review the agreement and make sure that they have addressed all relevant issues. Make sure you are not trusting one person to get the final product completed without other parties being able to review.
Helpful Hint: One way to avoid an incomplete agreement is to have a running sheet of the issues and provisions your band may want to cover. This way, if you forget to include a topic, or you want to add something new later, you will have a living document the entire time you are working on the agreement.
Legal Avenues and Relevant Information
Once you have agreed on the structure, rules, responsibilities and profit sharing as outlined above, it is important to consider how you want that agreement to stand up legally. Will it be binding in a court of law if needed? In the UK, it must be a written signed agreement and there must be consideration (i.e., an exchange of value). So a free gig on New Year’s Eve in return for a 5% share in the royalties for all future product sales is probably not going to make it. On the flip side, however, you could be very generous and agree that any money that the band earns whilst you’re working together will be shared equally. The more generous your offer, the more likely someone will sign! And you may find that someone has a bigger stake to lose than you do and will sign up quickly for the security a signed agreement brings.
In the UK, as a band , you are considered a ‘partnership’ and therefore you are subject to many laws that govern partnerships. For example, any profits (and losses) you make are personal to the individuals and not the band. So if you want to take out a loan in the band’s name, technically that will be a loan against the combined assets of the individuals who signed the loan agreement. The band is not a limited liability entity here, whereas in US terms. That’s why legal requirements vary between the US and the UK, as in the UK bands have less legal rights and protections than they do in the US.
Finally, don’t forget that there are many resources online offering lawyer services and advice. Many will work with bands or music companies bringing their knowledge and experience to your particular needs around a band agreement. There are also many reference books you can find that deal with a similar topic and might be more affordable than a lawyer’s fees.