The artist simply known as Dev is suing her record label, Indie-Pop LLC, because of an "onerous, one-sided agreement" between the two parties that breached fiduciary duty, according to her lawsuit, and basically amounted to fraud.
As the music industry has suffered from the widespread interactive abilities of the internet, the industry has had to adopt new approaches to their business. Traditional record sales have plummeted, and so record labels and artist managers have started asking for "ancillary income," like worldwide copyrights, merchandising rights, touring income, publishing income and other royalties.
In Dev's case, she signed a contract with Indie-Pop when she was 18 years old. At that young age, she likely had no clue how important the contract was that was being thrust in front of her. She claims her manager and the label told her she had to sign the contract "right away" or miss out on critical opportunities -- all while claiming to act on behalf of Dev's best interests.
The contract granted the defendant's 75 percent of Dev's ancillary income "in perpetuity," including cost deductions off the top of Dev's 25 percent. Dev did not have independent legal counsel review the document because she trusted the defendant's were giving her good advice. Instead, she says they manipulated her into signing a contract that should be "null and void."
Whether it's a restaurant, a corner market or the music industry, any business will enter into a variety of contracts in an effort to improve the company. However, when one party acts in bad faith and violates fiduciary duty (which is merely a trusting relationship based on ethical or legal grounds), the other party's business can suffer greatly. Having a legal professional review your contracts is a vital step for any individual considering any business obligation.
Source: The Hollywood Reporter, "Pop Singer Dev Sues To Void 'Onerous' Record Contract," Eriq Gardner, Aug. 1, 2012
- Contractual issues require a proactive approach and a keen eye to spot any abnormalities with the contract. Please visit our Glastonbury contract dispute page to learn more.