A recent court case saw rapper Armando Christian Perez (aka”Pitbull” ) take on an Aussie promoter and win.

In Fernandez v Perez [2012] NSWSC, the main issue before the court was whether Pitbull validly terminated the contract under which he agreed to tour Australia. Suave Productions contracted Pitbull to tour Australia and perform at least three shows in Sydney, Melbourne and Perth.

The Agreement consisted of just two pages with the cover page stating the key terms and conditions. Under the agreement Pitbull was to be paid $60,000 with a deposit payment of $30,000 due upon execution of the agreement and the balance due 7 days prior to the scheduled departure from the US.

The case hinged on part of clause 7 which stated: “If Artist has not received the deposit in the amount and at any time specified in subsection 4(b,c), then Artist thereafter at any time shall have the option to terminate this Agreement.”

Under the Agreement, dated 1 November 2008, Sauve Productions was required to pay the initial deposit of $30,000 upon execution. It did not. Part payment of the deposit was subsequently made on 14 November 2008.

The final payment was due on 25 November. Despite a series of email exchanges and conversations that payment was not made.

On 2 December 2008 Pitbull’s management advised in a conversation with Suave Productions “we’re cancelling the tour“.

The question before the court was whether Pitbull had validly terminated the agreement on 2 December 2008 under clause 7 of the Agreement for non-payment of the full amount of the deposit or for non-payment of the balance of the amount 7 days before his scheduled departure or both.

The Agreement did not specify any form of notice or method of communicating a termination. The Court held that the words were sufficiently clear communication of Pitbull’s termination of the Agreement.

The court also held that in relation to clause 7, although the only reference to a “deposit” in the contract was the initial payment, because clause 7 referred to a specified subection (being 4(c)), that was sufficient to make the failure to pay either of those amounts grounds for termination. Pitbull had therefore validly terminated the contract.

The case highlights the importance of having effective contracts and ensuring that what you intended is clearly stated in the contract. Just because you think the contract says one thing, doesn’t mean that your thoughts are reflected in the actual wording.

As an aside the judgement is worth reading if for nothing else than the analysis of the history of rap and hip-hop music by Justice Beech-Jones…

This information is intended to provide a general summary only and should not be relied on as a substitute for legal advice.

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