Problems cancelling a recording session

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helterbelter

Well-known member
Joined
Jan 26, 2006
Messages
1,187
Location
Zevenaar, The Netherlands
UPDATE HERE :
http://www.groupdiy.com/index.php?topic=42608.msg530424#msg530424

So, 3 months ago I started playing in a band again. The band had a record deal (or actually, still has), and last summer they agreed with the label to book a studio in Germany for the recordings of a new cd . So, one of the bandmembers contacted the studio, and booked it for 8 days in Januari. But, one week ago, the label contacted us that they don't have the money to pay for the recordings !

So, we have contacted the studio, explained the situation, and also forwarded the email that we got from our record label. But the studio-owner doesn't agree, and says we have to do the recording, and pay for the recordings ourselves, for which we don't have the money. (and even if we had, we wouldn't do that). Besides, I can do the recording myself, so, I'm not willing to spend money for this studio anyway.

Don't get me wrong : We feel very sorry for the guy, but we don't want to get into heavier financial Sh*t than what we are in already. I'm not planning to sell a part of my studio just to pay the guy. It's not our mistake that the label cancels the recording at the last minute.

However I think a cancelling fee would be in order. Even though there's no contract signed for the booking. The studio's website doesn't  list any conditions or other regulations.

Since there should be plenty of german studio owners here, I'm wondering what a suitable cancellation fee would be ? Note that the cancellation is done 2 weeks before the start of the recording.
 
No contract, they are kind of shit out of luck.  Offering a cancellation fee is honorable, but apparently not even required by any stated agreement.  I would think they might go after the label instead of the band, but maybe there was no mention of the label at the time of booking?  Bad situation, regardless. 
 
Hi EMRR, thanks for your reply.

Well, the band has recorded their previous CD at the same studio, for the same label.

About contacting the label, that's what we said to the studio owner, but he sees it differently. In his opinion, the band is the customer. That's all nice, but the contract that we have with the label, clearly notes this :

2. Production and recording expenses of all albums, covers, booklets, graphical arangements, printing, printing of compact discs and so on - are held by  XXXXX

(i've left out the name of the label)

The label doesn't respond to emails, so they keep the studio owner in the dark as well. I think a part of the difficulties lie in the fact that the band, the studio, and the label are stationed in 3 different countries.

Yes, it's a bad situation.

Still, any german studio owners that can respond ?
 
No written conract and reasonable amount of time given before cancellation?

They are trying their luck. They have no case unless there is something particular in German law that allows them.
 
Here in germany normally a oral contract is also binding. So if your bandmate booked the studio, theoretically you as the band need to fulfill the oral agreement.
But i guess the studio owner would have a hard time to prove it when going to court.
Bad situation, i agree. Ultimately your record label fails their part of the contract. But i guess you as a band are the customers of the studio or did your bandmate book the studio explicitely of the record label ?

Just to note i am not a recording studio owner (only a small cellar studio for myself) so this is just some common knowledge, i hope some studio owners / business owners can chime in here and give you better advise.

Hope this mess works out somehow for you guys.

Flo
 
Hi Infernal Death,

Thanks for your response.

I admit that this is a bit of a grey area. Yes, the studio is booked on behalf of the record label, but done by the band nevertheless.

And yes, you're correct about the bandname, but could you please remove that ? I don't want the world to know this, haha. With a bit of research it also shows which label and which studio it will be. I actually didn't expect somebody here would know about this style of music.
I can tell the new material is killer though ! : )
 
Hey no problem about the edit.
This is my favourite style of music for over 15 years now so i always keep myself busy following the underground scene, at least as good as i can.

Flo
 
Here, I think without a deposit to hold a date for a client, or a written agreement, I would expect to call it a full loss if a band canceled even the day of.  Going to court would be the only way, and there'd have to be a very large amount of money involved to even risk it.  Good luck. 
 
Laws and regulations in Germany are no different than most parts of Europe.
The absence of a written contract entirely voids any claim for compensation.
They could try to sue you, but it would be a losing battle and cost them a lot of legal fees, in addition to losing you and your friends as potential customers.
I think they try to intimidate you.
But I think you've been lacking thoroughness not saying that the label was the customer, and they've been lacking too, because they should have requested a signed PO and some advance money. The label should have contacted them direct anyway.
 
It's absolutely true that the band shouldn't have booked the studio themselves in the first place. This is a lesson well learnt, and it won't happen again this way, hahaha.

anyway, thank you all for your input. It's good to get feedback about this issue.

Next monday one of the bandmembers will contact a lawyer to ask what our rights and duties are. I understand from your replies that we probably have nothing to fear. Still, I think we should give the studio owner a bit of financial compensation, just for keeping the peace.
 
helterbelter said:
In his opinion, the band is the customer.
The studio bill was paid under the band name or the label name in the first time ?
I was thinking if you pay some compensation under your name, that would make you officially responsible for the cancellation
 
Infernal_Death said:
Here in germany normally a oral contract is also binding. So if your bandmate booked the studio, theoretically you as the band need to fulfill the oral agreement.
But i guess the studio owner would have a hard time to prove it when going to court.
Flo

It is the same here in Scottish Law (different in England). However, it still is not black and white. As a customer you also have a right to cancel.

If you end up in court the studio has to prove that the cancellation of the booking was unreasonable. If you contacted them for the cancellation two weeks or more before the session, I don't think thay can consider that unreasonable. They would also have to prove that this cancellation has cost them by turning down other offers for that particular time booked. Such as their fixed overheads. However, that argument again becomes weak because regardless of your cancellation they would have to pay those overheads anyway. These are from my past experiences of ending up in court with two clients.

I don't think they will have a case. They'll bluff.
 
IANAL (I am not a lawyer).

Under general US common law, oral contracts are perfectly valid.

"I will give you $10 to mow my lawn today."

"OK!"

If you mow, and I fail to pay, you can take the case to court. The judge will listen to both sides, attempt to judge validity and truth. Obviously I can lie, but then why did you mow my lawn? And lying to a judge is a crime. If the lie is exposed there is punishment.

There are limits. More than a year between contract and fulfillment ("I will pay you $10 to mow in 2019") better be in writing. Contracts for land, cars, mail-order, marriage have special laws.

Germany may have more limited "oral contract" laws. It is hard to believe that a $10 lawn-mowing deal must be in-writing or be unenforceable. It may be that courts won't listen to "large" contracts without a writing, or will dis-favor a "large party" (Label or Studio) who "should" have paper contracts on hand, but didn't require one.

You have TWO contracts here.

1) Label promises Band to pay Studio.

2) A person representing Band promises to pay Studio.

Contract 1 is in default. (Label refuses to pay.)

Contract 2 is heading to default.

The Band is caught in the middle.

The Band is in a very bad position. The Band entered into a contract without having in-hand the money they promised. A sharp lawyer could call this a fraudulent contract. The Band was relying on a promise from the Label.... but there is no contract between Label and Studio.

YOU are responsible for the contract with the Studio.

A contract (even oral) may be "relied upon"--- that's the main point. I promise $10/mow, you go buy a $5 specific blade no other customer needs, relying on my promise. And note that the blade dealer has no contract with me and can not rely on my promise to pay you to give you a blade now and get paid after the mowing.

A judge would expect Studio to "mitigate damages". With 2 weeks notice, the studio could attempt to book other customers, lay-off the staff for those days, turn down the heat and turn-off the equipment to save electricity. However there may be no other customers ready to go into studio, the staff may be under contract to be paid, and you can't let good gear freeze. Building payments and gear-investment costs typically can't be mitigated. The fully mitigated costs may be 70%-90% of the full rate. (At least a good lawyer should be able to prepare a spreadsheet which says so.)

This is not just a $$/day contract. If Band makes a good CD, the Studio looks good and may gain more business. So while Studio probably can't force Band to record, they may reasonably have been relying on reflected fame and glory, now lost. What is that worth?

You have two practical paths.

1) Try to settle with the Studio for all their costs.

2) Tell Studio you can not pay. You should also talk to the Label, who may say they can not pay. This means you are on bad terms with both Label and Studio, and with friends of Label and Studio. If you are in a small niche market, this may mean nobody will work with you.


From here: the Studio demands full payment from the Band. If Band and Studio can't agree on a cancellation fee the Band pays, the Studio may sue the Band (and probably each member) to attempt recovery. The Band may demand fulfillment from the Label, then sue.

However lawyers are as expensive as studio time, and a judge will want more testimony and supporting evidence on an oral contract. And there are two contracts, and the two suits probably will not be Combined without some specifics about the Label's intent to use that specific Studio. So all in all, lawyer fees will take all the money involved.

Unlike this studio, lawyers usually look to see if they can get paid. In this case the parties on both contracts say they do not have money. I don't know how they verify this. I imagine the Studio's lawyer will call your lawyer, who says "Musicians don't have money; I demand $50 in front and throw them out after 15 minutes". Your lawyer may get a credit report on Label, and talk to their lawyer, and discover they too live day-by-day with no real assets; or that they have a back-catalog worth money, or they are an arm of a larger Label with money. OTOH, a Big Label may have well-paid lawyers who can stall the case until Band runs out of $50 bills to keep their lawyer working.

The judge will want to know if there was a clear Agreement. From your statement it seems clear: you booked 8 days at $XXX/day. The Studio will say something similar, and display the Main Calendar showing Name or Band on those days.

The judge will reasonably ask Studio if customers have ever canceled before. Probably yes. Does the Studio have any policy for cancellations? An ongoing business with no cancellation policy seems odd. If there is a policy, was it revealed to Band when the contract was made? You can't pop-up with extra conditions not known at the time of the contract. You can hide them, and change them without notice.... that's how ISPs and cellfone companies wedge extra fees from us. A good judge will study this point carefully.

If the judge feels Band should pay, judge will ask how Band is organized. Unless you have filed papers of incorporation (or similar), Band probably acts as a Partnership. Each member may be held to account for any debt of the whole partnership. Now each member tries to say some other members should pay. You have five lawyers working against each other. Nobody can win.


The Studio is taking a hard line because business is bad. They need the money. However suing the Band is unlikely to recover money for Studio: band is poor, lawyer is expensive. And suing clients does not look good to other clients. The studio "will" take what they can get, but you will have to work with them to show that they can NOT get full rate from you because you can't get it from Label.


Next time: if you are not prepared to put up the money, do NOT book the studio. If you rely upon a Label to provide money, let them book the studio. While a letter (or email) of intent to pay a specific studio a specific amount has weight, without a direct agreement between Label and Studio then YOU get caught in the middle.
 
I've been in bands - still am, and I currently run a small studio and have helped run a tiny (i.e. zero budget) label in the past, so I can see all the points of view here.

I wondered if there was another way forward before you spend too much on lawyers and offer compensation and so on?

If it were my band I would consider doing talking to the studio about fulfilling some of the agreement and doing some of the recording with a view to self releasing something or taking it to different labels. It sounds like you have a bit of a fan base so you could recoup some of your money with a quick iTunes release or similar. This way you at least get something for your Euros.

I don't know your exact situation but it could for example be a case of doing one week instead of three, or a few days here and there. If necessary finish the mixing etc. in a cheaper studio or at home, or make an EP rather than an album.

As a (small) studio owner I would be happy (well, less pissed off) to cut my losses and get some of the work (and also not pay lawyers).

Good luck at sorting this mess out!

Stewart
 
As PRR said I am also not a lawyer. All my comments are based on my previous experiences. In one of which I can tell you that a logic defying comments were perfectly well acceptable to the judge. For example. I was in court with a University. The person I was dealing was the deputy head for an engineering department. Their defence for not paying was that the job was not done to the specifications. My claim was that it was and they later changed the specifictaions and did alterations on my work without giving me the opportunity to rectify it. I told the court that the person in question measured the work using a steel ruler and confirmed. The person in question said he did not have the skills to do the work we were commissioned with hence was not qualified to measure it. Now the person in question at that time was an associate professor of a branch of engineering and the court perfectly well accepted it.

What I am saying here with that warble is that in court the written evidence talks but verbal statement often walks. Even if the law allows verbal contract it still is not as balck and white.

If you end up in court you can easily make a case that the studio was booked on the understanding of making a record. if the record is no longer needed then you are perfectly well in your rights to cancel the session. In my view for you to offer to pay some fee to comensate them is very reasonable and will certainly work in your favour.

 
Next time: if you are not prepared to put up the money, do NOT book the studio. If you rely upon a Label to provide money, let them book the studio. While a letter (or email) of intent to pay a specific studio a specific amount has weight, without a direct agreement between Label and Studio then YOU get caught in the middle.

+100
I can tell the new material is killer though ! : )

So if it really is, and you think this one will have success (well if you have enough distance to say so), then you could maybe find somebody working in this kind of music, who will take care of the recording fees, and so be the co-producer or even executive producer, and make sure this one goes to the end?
At the end everybody is happy, and this album would be one with a "nice" story to tell.
I'm sure it's something that happens a lot of times in the music industry, maybe even more now.
Anyway Good luck and keep us posted.
 

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