12 Days of Contracts – Day 12- Attorney’s Fees + Arbitration + Choice of Law

Photo by The Entertainment Esquire

On the 12th day of Christmas, my client gave to me, 12% attorney’s fees… (Mel’s Remix)

Thank you for joining me for my 12 days of contracts series! I hope you found this informative, and maybe even a little fun? Maybe not, but I still appreciate you reading. Leave me a comment with suggestions for more content. I’m happy to oblige and share the knowledge.

In these 12 days, I shared some contract basics, terminology, and other info so you can be more informed on what a proper contract needs to contain to make it valid and enforceable.

Prior 12 Days Posts:

IF YOU MISSED IT, SEE DAY 11 (REPRESENTATION) HERE | IF YOU MISSED IT, SEE DAY 10 (INDEMNIFICATION) HERE | IF YOU MISSED IT, SEE DAY 9 (TERMINATION) HERE | IF YOU MISSED IT, SEE DAY 8 (DELIVERY) HERE | IF YOU MISSED IT, SEE DAY 7 (SCOPE) HERE | IF YOU MISSED IT, SEE DAY 6 (RIGHTS) HERE | IF YOU MISSED IT, SEE DAY 5 (FEES) HERE | IF YOU MISSED IT, SEE DAY 4 (TERRITORY) HERE | IF YOU MISSED IT, SEE DAY 3 (TERM) HERE | IF YOU MISSED IT, SEE DAY 2 (ELEMENTS) HERE | IF YOU MISSED IT, SEE DAY 1 (PARTIES) HERE

Contract books and online templates cannot replace the advice of a lawyer.

Melanie Rodriguez aka The Entertainment Esquire

Attorneys Fees

Attorney’s fees in the context of a contract does not refer to the fees being paid to the attorney for creating or negotiating the contract. This clause means specifically the fees that will be paid to attorneys in the event the parties sue and the contract is litigated in court. In the event one party to the contract sues the other party, there will be extensive legal fees. The attorney’s fees clause in the contract can be written to give the winning (prevailing) party the ability to have the losing side pay its attorneys’ fees.

Arbitration

Arbitration clauses designate that any disagreements under the contract must be sent to arbitration, which is a dispute resolution procedure that takes place outside of a court. In arbitration, the parties meet in front of an arbitrator (a neutral third party) who will apply the law and determine a final outcome for the parties. It is not litigation or trial conducted by a judge in courtroom with a jury. This is included in entertainment contracts due to the complexities of this area of law, especially film and TV, where a typical judge may not understand the contractual nuances.

Governing Law/Forum

Governing law and forum clauses identify the state law applied to the contract and the specific location of the court (i.e. state county or even the specific district), respectively. If the agreement is international, a country’s international laws might apply. It is included to streamline the process in the event that a party decides to sue to enforce the contract. The state and forum chosen is often where the parties live or where the law is most favorable to be applied.

Parting Thoughts…

First, contract books and online templates cannot replace the advice of a lawyer. They can be a good tool to use for learning and understanding. I work with contracts all day every day, so I’ve seen the best and the worst. I’ve seen people think they had everything they needed in writing, when they didn’t. I have to ask questions that my clients never even considered. It’s all part of the process of drafting a good, valid contract.

Second, no contract is 100% iron clad. But the goal of a transactional attorney is to make sure the parties agree, the agreement is clear, the rights granted are valid, and to address contingencies that may arise. You, or your attorney, have to think through the deal and anticipate the best case and worst case scenarios and try to safeguard the parties against any risks.

You have to think through the deal and anticipate the best case and worst case scenarios and try to safeguard the parties against any risks.

Questions to ask:

  • 1) Are attorney’s fees included? Attorney’s fees in the context of a contract clause does not refer to the fees being paid to the attorney for creating or negotiating the contract. This means specifically the fees that will be paid to attorney’s in the event the parties sue and the contract is litigated in court. The parties can agree to pay their own attorney’s fees, or the prevailing (winning) party pays the fees of the other party.
  • 2) What state or country’s law is governing the contract? This should be stated explicitly. If it is an international company, there might be even be a different country’s law. Different states apply the law differently, so it’s important to distinguish this up front in the contract so there’s no dispute later.
  • 3) Is there a requirement to go to arbitration or mediation? Arbitration clauses are typically included in entertainment contracts due to the complexities of this area of law, especially film and TV.

If you have any questions related to a contract you signed or need guidance for constructing your contracts, please contact me.

*Disclaimer: This post is for informational purposes only and does not constitute legal advice. An attorney client relationship is not formed until there is a signed fee agreement*

Published by theentertainmentesquire

Entertainment attorney based in Los Angeles, California. I provide transactional legal representation and services to artists, creative entrepreneurs, and industry professionals in the music and entertainment industry.

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