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What Happens When the Artist Manager Disappears During the Term of the Contract?
April 28, 2014
Experience is a great teacher. Here is an artist-friendly tip for drafting a personal management agreement.
A few years ago I represented a singer-songwriter who was in the middle of a personal management agreement. It was an important agreement because the Artist was in the development phase of his career. A problem arose when the Manager suddenly stopped communicating with the Artist. The Artist called. The Artist texted. And called. And texted. No response. This went on for several weeks. Although the lack of communication amounted to a breach of the management agreement under the “best efforts” clause, there was no specific provision in the contract to deal with the non-communicative manager scenario.
The next step was to send a breach letter to the Manager. Incidentally, the breach letter was returned because the Manager had moved without leaving a forwarding address or updating the notice address in the contract. Although the Manager did not “cure,” it was a less than satisfying situation to be left wondering if the Manager would show up one day to challenge the cancellation of the contract. In addition, even though the Artist considered the contract terminated, the Artist was in limbo relative to potential new managers who would almost certainly demand additional proof of cancellation. As it turned out, we eventually discovered that the Manager was so quiet because he was in jail! When the Manager finally reemerged, he agreed that the contract was terminated, and the Artist was able to move forward.
After that experience, the issue was how to avoid having another client in that same situation. Of course most managers will not agree to a clause that says “if you go to jail, the contract is terminated.” Even inserting such a clause into a draft might be considered insulting, and get the relationship off to a rockier than necessary start. But there are more delicate ways to accomplish the same result without suggesting that the Manager might be a jailbird. One potential solution might be a “non-communication clause.” Essentially, the clause would state that if the Manager fails to communicate with the Artist for a specified period, then the Artist can send written notice of non-communication. If the Manager then fails to respond for an additional specified period after notice of non-communication, then the contract is automatically terminated. The non-communication clause is often included in a broader termination paragraph that might also include a termination right in the event of the Manager’s death, disability, bankruptcy, or sale of stock or membership interests in the Manager’s company. Manager’s attorneys are likely to object to some or all of these termination provisions. Whether the Artist will be successful in obtaining any of these termination rights depends on numerous factors including, but not limited to, the relative stature of the Artist and Manager, the Artist’s bargaining power, and the effectiveness of Artist’s counsel.