MUSIC AGENDA ≥ Key Member Clause

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OVERVIEW

This contract section gives a party the ability to terminate a contract if a particular person, or “key man,” no longer works for the other party.

The Key Member Clause

The key member clause in many record contracts inspires a certain amount of fear among artists and musicians. As a result, music lawyers can spend time and your money trying to get a clause like this removed. Every clause is important, but you must remember that every contract is negotiable.

Take the Quiz: Key Member Clause (explained by you) Music Business Quiz.


What Is a Key Member Clause?

A key member clause in a record deal (sometimes known as a key person clause) is a clause that states that if a member of the group who is considered to be critical to the overall sound, style, or identity of the group decides to leave, the record label can claim breach of contract, which can result in its cancellation.


With this cancellation, the label often will discontinue any active promotions and cease marketing activities. It is their way of protecting themselves, the brand, or their own profits.


Although the clause gives the label a way to drop you if a "key member" leaves, it also offers some level of protection. With the key member clause in place, the label can't easily use the sudden departure of your sometimes backup singer as a reason to cancel your whole deal unless they name that individual person in the contract.


Another point artists sometimes miss when dealing with the key member clause is that just because the clause is in the contract doesn't always mean the label will enforce it. So, for example, if the label doesn't deem your keyboardist essential to the group, they may not cancel the deal.


Everyone on your team can be named a key member, but that will open a door you may not want. A situation like that will allow a label to drop you from your deal if any key members leave or become inactive. Another reason you wouldn't want to get yourself into a honey pot situation. If you have bandmates, keep your egos in check. Unless you become mega commercial hits, record labels will have no stress in dropping you from their roster because you and your team members don't get along. If you mess with the money, these clauses in these contracts will immediately make an appearance for how to handle the situation. You may feel differently about some clauses when used against you instead of for you.


What do we do about the Key Member since we now understand the Key Member Clause?


The Key Member will undoubtedly appreciate their importance; however, egos aside, this should be about the group or the team. Key Member clauses can also be implemented for team members. For example, a label might sign or keep you under contract with them if a particular manager or business manager is on board with your team. This can occur if the label deems your team member instrumental in running a specific operation.


Basically, to keep things smoothly going along. Be aware if a company or label inserts this clause, but it's not for a team member you've chosen but for one they've chosen. Something like, "we'll sign you, but you have to use our booking agent only." It's not entirely a red flag, but it is something you may want to have caution with. A company-appointed officer often gets paid from the label and will uphold their best interest more often than yours.


Find a way to have control of your team selection, for example, your manager, booking agent, accountant, etc. Because if the only people around you are the people the label trusts, who are you going to trust when there is a conflict?


Consider this...


Of course, you can always ask or have your lawyer ask for this clause to be removed, but a label needs a way to protect itself. So, don't be surprised if there is pushback on this. It might be something you may have to live with. Just know that your success is bigger than just one person. It's going to take all of you to make it work. So, you and your team should do your best to make it work.




Review

  1. This contract section gives a party the ability to terminate a contract if a particular person, or “key man,” no longer works for the other party.

  2. That key person or member should be named in the contract.

  3. Activating this clause is within the rights of the record label.

  4. This clause isn't always enforced and is usually at the discretion of the record label.

  5. Most contracts are negotiable and a request of removal for this clause can be made.

  6. Find a way to have control of your team selection.

  7. If this clause is in your agreement, find a way to live with it and avoid having it activated.


Shaheim Kellum


F I V E R R Music Services







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