Do We Need a Band Contract?
By Heather McDonald, About.com

Question: Do We Need a Band Contract?
The following advice is general in nature - your own situation may be different. This advice is not intended to take the place of legal advice - if you need legal advice, consult an attorney.
Answer:
Bands generally don't like discussing contracts, period, and of all the contracts they like to avoid considering, artist contracts top the list. It can be uncomfortable considering band member contracts, because discussing contracts can feel like acknowledging a certain level of distrust (or at least a certain amount of realization that the band relationship could fall apart). Usually, your band members are also your close friends - in many cases, they're like family to you - and you would like to think that your personal relationship means that no one in the band would take advantage of anyone else. Beyond that, there is the fact that contracts just don't seem very cool. You're in a band for the music, right? The business thing is the last thing on your mind. YOUR band would never fight about money or songwriting credits or anything else. Right?
Famous last words. Consider these reasons a band member contract may be exactly what your band needs:
• Every band that has ever crashed and burned over money issue or songwriting credits swore at some point in their career that these things didn't matter at all to them. The fact is, when your band is earning money, everyone will want their share. If you're not sure what that fair share is (especially when it comes to songwriting royalties), then the fighting will start.
• A band contract can actually help keep the friendships between band members in tact. When everything is set out in black and white, there can be no fighting down the road over who was supposed to get what or who was supposed to do what. When you're doing business with friends (and a band is very much like doing business), then it is a good idea to make sure your cards are on the table up front.
Of course, many bands function without band member contracts. If your band is more like a hobby than a career goal - if you like to play shows and play music together for fun, but don't have any interest in making music your career, than a contract is really not essential. If your band is playing together with the hopes of making music your full time job, than a contract is definitely worth considering. Here are a few scenarios in which you should give an artist contract some serious consideration:
• If your band has one songwriter - or if you think all of your songs are group efforts. Songwriting royalties are a constant area of contention for bands. It is a good idea to make sure everyone is on the same page as to who gets credit for what.
• One or two band members are paying most of the expenses for the band. Bands costs money, and some band members may be in a better place financially to be able to cover the costs of the band. Get it in writing as to how this person will be paid back when the band starts making money.
• Your band works with session musicians. Whether you're bringing in extra help on tour or in the studio, a contract can help draw the line between who is actually in the band and who is being hired as a sort of "freelance" musician.
• You have contracts with other people as a band. If your band has signed contracts with managers, promoters, agents or labels, it makes sense to have at least an informal contract between band members to make sure you can deliver on your contractual obligations. For instance, if you have signed on to do a 20 date tour, having the guitar player bow out of the band the night before you leave puts you in a sticky situation.
So - should you have a contract? Many, many bands do not - but many bands who have broken up and lost opportunities, friends (and money) that they will never get back again wish they had taken the time to write things down. You can function as a band without one, but the best way to protect everyone involved is to get one.