Legal Question in Entertainment Law in Massachusetts
Royalties
I, as well as four others, had participated in a commercial on the behalf of a company. On completion of the commercial, they had asked for 33% of what we had earned as a ''Finder's Fee''. Because we had felt obligated to pay considering they did ask us to participate in the commercial we agreed and had paid.
Now we are receiving royalties on the commercial, and the company, again, is asking for the 33%. We refuse, as they had only stated clearly in writing it was 33% of an agreed upon amount, and the amount on the royalties is much greater than the original amount. Further talks have resulted in threats of litigation, and claims that they are rightfully owed 100% of the royalties we receive and we are entitled to none. They also claim that the reason why we are receiving royalty cheques and not the company is because of an accounting error. This was only brought up after we had refused to pay 33%.
To summarize, are we legally in the wrong for not paying 33%? As well are we not supposed to be receiving these cheques, and could any amounts received in the past be returned to the company if we are in the wrong?
3 Answers from Attorneys
Re: Royalties
Without reading the agreement you signed, it is difficult to know what you really signed and what you agreed to pay. However, 33% is a very high commission and I sincerely doubt they are entitled to 100% of the royalties.
I am not sure if you are a member of the Actors union or not. If you are or were, there are certain requirements advertising companies must honor.
It is also unclear what this company is and how they 'found you" or the "job"
If this contract or work was arranged in MA, you may have a claim for a deceptive business practice.
Re: Royalties
In order to determine the rights of the parties, you should gather all paperwork and visit your local attorney. Who is entitled to what compensation depends on 1. the written contract, if any, 2. oral promises and assurances, if any, 3. and perhaps customary practice of the industry.
Please feel free to contact my office if you have any further questions.
Re: Royalties
Agreed. Evaluating the strength of your case and of the company's claims begins, first, from the agreement you signed. Then, perhaps from examining the conduct of the parties, their mutual intent, and industry standards.
Judging from the company's conduct you describe, I would not be surprised to learn they are trying to pressure you to relent, b/c they recognize (1) the royalties may ultimately be significant, and, maybe, (2) because they do not have a good agreement entitling them to royalties, so they are trying to pressure you to give in to them without resorting to a formal dispute about the terms of the agreement.
At least, their conduct suggests that you have strong incentive to investigate your rights further before doing anything more. Depending on the contract terms and analysis, retaining an attorney on your behalf in the process could easily pay for itself several-fold by ultimately bringing about a significantly higher settlement payment to resolve the dispute than if you handled this unrepresented. Feel free to contact me directly for a no obligation initial office consultation. Often in these cases, the companies use their size and bargaining power to push you around or take what they are not due, especially when intellectual property is involved. But there is much you can effectively do to prevent it.
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