The Crazy World of Online Contracts and Why You Need to Read Them (Ep.1)
We’ve all clicked that we agree to the terms and conditions online, without slogging through the dense pages of text that follow. But when you’re getting financing for your music rights, you need to read. The terms will directly affect your financial future and the health of your creative career. Resist the urge to hit “I Agree.”
These agreements often seem complicated. (They are written by lawyers, after all.) To help translate the lawyer-ese into human language, here are a few key things to look out for when you’re getting ready to sign onto that digital agreement that includes contractual advances or payments:
1.Opt-Ins: Digital agreements can have pre-selected opt-ins. That means that if you don't want the feature, you have to uncheck the teeny-weeny box to opt-out or decline. This suggests you’re dealing with someone who’s fine with using dark patterns to manipulate you. That someone’s trying to trick you right out of the gate is not a good sign. Look closely for any of those miserable pre-selected boxes and make sure you like what you see.
What Lyric Financial does:
No tricks…our agreements are very straightforward and simply laid out to make them easy to understand.
2.Segregated Accounts: Does the agreement state that the company will segregate your earnings, i.e. maintain them in a separate account only to be used to pay you your money? Most do not. This means they are using your money to fund their business. And when that company runs into financial trouble—sooner or later they all do—you may get stuck holding the bag for any earned but unpaid royalties.
What Lyric Financial does: Lyric Financial has always segregated client earnings in a separate royalty account with our bank. As a trusted financial partner to our clients, we know they deserve to have their financial business run properly.
3.Rights Granted: Just because someone says that you retain your rights in some general way doesn’t mean the contract they’re offering you won’t try to chip away at them. Look carefully to see what specific rights are you giving the company. Do they get control of your catalog? Access to your personal information or to your brand name and image? On a more practical front, will they have the right to continue to charge your credit card or bank account? It’s equally important to see how long you’re locked into that grant of rights: for the term of the agreement or in perpetuity?
What Lyric Financial does:
The only right an artist grants to Lyric Financial is the temporary right to collect the specific amount of royalties that the artist has assigned to us for the advance. The minute the artist has recouped their advance, we immediately redirect their royalty account back to them. We do not mess with their ownership rights in their content or brand. Never have, never will.