Music recording contracts are a critical part of any artist’s or label’s career. Whether you’re signing your first deal or renegotiating terms, the fine print can affect your income, control over your work, and long-term rights.
This article, by our entertainment lawyers, outlines the key issues in recording contracts – designed to help you identify risks and know when to seek legal advice.
Key Takeaways
Recording contracts define your legal rights around ownership, royalties, and distribution. Poorly drafted terms can result in loss of income or control.
Exclusivity, royalty structures, and jurisdiction clauses often contain hidden risks – especially in international agreements.
Australian artists and labels should ensure their contracts are reviewed by an experienced entertainment lawyer to avoid long-term legal issues.
You may be protected under the Australian Consumer Law if a contract term is unfair (but only if the issue is identified early).
Legal advice before signing is critical. Once signed, your ability to renegotiate or walk away is limited.
Why Recording Contracts Matter
A music recording contract governs how your music is recorded, released, distributed, and monetised. It often includes terms about:
Who owns the master rights
How royalties are calculated and paid
Whether the deal is exclusive or non-exclusive
Distribution rights (territory, format, duration)
Dispute resolution, copyright, and branding rights
Each clause carries legal and commercial risk, especially when the contract involves overseas parties, streaming platforms, or complex revenue splits.
Common Legal Issues in Music Deals
Here’s what we regularly flag when reviewing music distribution and recording contracts for clients:
1. Ownership of Intellectual Property
Artists often assume they’ll keep their rights, but not every contract makes that clear. Even licensing language can be misleading if not properly framed.
Risk: You could accidentally assign your rights when submitting materials or metadata (especially if you’re dealing with international labels).
For a broader overview of how the legal system supports creatives, explore our introduction to Australian entertainment law.
2. Royalty and Payment Terms
Royalties should be simple, but they rarely are. Payment frequency, reporting obligations, and exchange rate issues often create disputes.
Not sure how royalties work across music, film, or publishing? Our Australian guide to royalties breaks it down in plain English. You can also learn more about your tax obligations around royalties on the ATO website.
Risk: Without clear rights to audit or dispute underpayment, you may not even realise something’s wrong.
3. Exclusivity
Exclusivity can limit your future options. Some contracts prevent you from working with other distributors (or releasing other music) during the term of the agreement, and sometimes longer.
Risk: You may be locked in even if the relationship no longer serves your goals.
4. Jurisdiction and Dispute Resolution
Many contracts specify overseas laws or courts (especially if you’re working with international distributors).
Risk: Enforcing your rights may mean hiring foreign lawyers, travelling overseas, or losing access to Australian legal protections.
If you’re working with or operating a talent agency, understanding legal compliance for Australian talent agencies is essential.
Long-Term Risks of Poorly Drafted Music Contracts
Recording contracts aren’t just about what happens now. They can affect:
How much control you keep over your catalogue
Whether you’re paid fairly from streaming or sync deals
How quickly you can respond to better offers
Your ability to exit the deal or resolve disputes on fair terms
In our experience, these problems often start with poorly defined clauses, vague royalty terms, or unbalanced indemnity obligations.
Don’t Sign Blind: Get Legal Advice Before You Commit
We understand the excitement of getting a deal, but signing without advice can have long-term consequences. Once a contract is signed, your options can become very limited.
Our entertainment lawyers help Australian artists and businesses:
Review and negotiate recording and distribution agreements
Protect copyright and master rights
Identify unfair contract terms under Australian Consumer Law
Manage risks in international music contracts
Whether you’re working with a local label or negotiating a global deal, we can guide you through the legal landscape – clearly, confidently, and without unnecessary complexity.
Protecting your creative rights starts with understanding IP. Read our guide to intellectual property law in Australia.
Frequently Asked Questions
Do I need a lawyer to review a standard music contract?
Yes. Even “standard” contracts often include terms that favour the other party. A lawyer can help explain the risks, protect your rights, and help negotiate fairer terms.
What does ‘exclusive distribution’ actually mean?
It usually means you can’t release or distribute your music through any other platform or partner for the length of the contract, even if better opportunities arise.
Tip: While exclusivity clauses are often considered “industry standard,” that doesn’t mean they’re non-negotiable. Depending on your bargaining power, there may be room to limit exclusivity by format (e.g. digital only), region (e.g. Australia or select territories), or duration. Carving out exceptions (such as for collaborations, sync deals, or specific platforms) can also give you greater flexibility without breaching the agreement.
What should I look out for in royalty clauses?
Look for how royalties are calculated, how often you’ll be paid, and whether you have the right to audit. Vague or one-sided clauses often result in underpayment.
Artists often get caught out when they don’t have the right to audit the other party (i.e. they can’t verify that the royalties being given are accurate).
Can I change a music contract after signing it?
Not easily. You can try to renegotiate, but the other party has no obligation to agree to a change after signing. That’s why it’s important to get legal advice before you sign.
What if the contract is governed by overseas law?
If your contract is governed by foreign law (e.g. U.S. or Canadian), you may lose access to Australian legal protections. Disputes could also become more challenging, expensive and time-consuming to resolve.
