Music Contracts in Georgian Law
Music industry agreements are often described through forms borrowed from international practice, and caution is needed here: the Civil Code of Georgia contains no separate contract type called a music contract. Under Georgian law such relationships are built on two real foundations: on one hand, the law of copyright property and personal non-property rights, regulated by the law on copyright, and on the other hand the contract of mandate, under which a manager, producer or publisher acts in the name and at the expense of the artist. The detailed regulation of neighboring rights and royalties lies in the law on copyright; one may rely on the general existence of that law, but when building a music contract as a concrete legal act, it is precisely these two foundations, the transfer of rights and the mandate, that must be used.
Copyright as the Subject Matter of the Contract
The economic core of a music contract is copyright. Under Article 1017 of the Civil Code, the protection of the copyright property and personal non-property rights regulated by copyright law, as well as certain of their neighboring rights, is carried out in accordance with the Georgian law on copyright and neighboring rights. This means that the transfer, licensing and protection of rights in a song or a recording take place within the regime of that special law, and not under the general norms of the Civil Code. Personal non-property rights are linked to the author's personality and their transfer is limited, while property rights are precisely the asset around which publishing, licensing and distribution deals are assembled. When drafting a music contract, one must first distinguish which right passes into which block, and then every clause must be built on these blocks.
Management and Publishing on the Foundation of the Mandate
The legal form of the relationship with a manager or publisher in Georgian law is the contract of mandate. Under Article 709 of the Civil Code, by a contract of mandate the mandatary must perform for the mandator one or more acts in the name and at the expense of the mandator. In the music business this is exactly the construction by which a manager arranges concerts, represents the artist in agreements and manages relationships: the manager acts in the artist's name and at the artist's expense, and the boundaries of the manager's authority are defined by the mandate contract. Everything a manager says or signs in the artist's name must therefore fit within this frame, and the contract should define the scope of authority so precisely that no step taken for the artist lacks a mandate basis.
The Fee and Its Determination
The most contested topic in the music industry is remuneration, and here the mandate rules give a clear anchor. Under Article 710 of the Civil Code, the mandator must pay the mandatary a fee only in cases envisaged by contract or by law. This means that remuneration is not automatic: it must be provided for either in the contract or by law. At the same time, a fee is deemed tacitly agreed where, according to the circumstances, the performance of the act is expected only for a fee. In the context of professional music management, where the service is professional and paid, this presumption often applies. Where the amount of the fee is not determined, then in the existence of a tariff a tariff fee is deemed agreed, and in the absence of a tariff the customary fee. Formulas for royalties and advances must be spelled out precisely in the contract, because vague formulations end up falling into the regime of these very norms.
Personal Performance and Delegation
Management contracts often raise the question whether the manager may distribute functions among others. Article 711 of the Civil Code sets the starting point here: the mandatary must perform the mandate personally, except where permitted to transfer it to a third person, or compelled by the circumstances to act thus. The involvement of assistants is allowed. In music practice this means that a manager uses bookers and lawyers as assistants, but the delegation of core functions to another manager is possible only with permission or under compelling circumstances. The allocation of responsibility is also clear: where the transfer of the mandate to a third person is permitted, the mandatary answers only for such fault as attaches to the transfer and to the selection of that person. This norm requires that the selection process be documented, since it is the selection that the mandatary answers for.
Information, Reporting and Confidentiality
It is in the artist's interest to know what is happening in the processes conducted in the artist's name. Article 713 of the Civil Code gives the instrument for this: the mandatary must give the mandator necessary information and, at the mandator's request, provide reports on the progress of performance of the mandate, and after performance submit a report. In music management this norm is the foundation of financial transparency: information about royalties, concerts and licences is the mandatary's duty. It also matters that an agreement by which the mandatary's duties under this article would in the future be limited or excluded requires written form. Thus the information duty can be restricted, but only in writing, and this clause is part of the negotiating position of the parties.
In the music business information is itself an asset: unreleased recordings, tour plans, contract terms. Under Article 714 of the Civil Code, the mandatary must not disclose facts known to it in the course of its activity whose confidential keeping the mandator is legitimately interested in, unless a duty of disclosure exists on the basis of law, or the mandator permits the mandatary to disclose it. The duration of this duty is decisive: the duty of non-disclosure of facts exists also after the termination of the contractual relationship. This means that the end of a management contract does not cancel the confidentiality duty, and it is precisely this norm on which confidentiality clauses should be built when the relationship is structured.
How We Can Help
Our team builds music contracts on the real foundations of Georgian law: we structure blocks for the transfer and licensing of rights with regard to the regime of the law on copyright, and we prepare management and publishing agreements on the mandate rules, with fee, personal-performance, information and confidentiality clauses. We also review existing contracts and demand reports on the basis of the norms established by law. Contact our specialists so that your creative interests are protected by a reliable contractual frame.