Stokes O'Brien

California’s “Seven-Year Rule” for Employment Contracts

The hard rock band Avenged Sevenfold is in a contract dispute with its label, Warner Bros.  The band is attempting to cancel its recording contract based on California’s “Seven-Year Rule” for employment contracts.  After receiving the band’s notice of intent to cancel, the label filed a breach of contract lawsuit.

According to Billboard, the band originally agreed to provide the label with 5 albums, but has only provided 4.   The band, on the other hand, claims that things have changed so much at the label, including A&R personnel, that it’s entitled to cancel the agreement pursuant to California’s “Seven-Year Rule” for employment contracts.

Generally speaking, in California, you cannot force someone to perform under an agreement — the law says that money damages are the remedy for non-performance.  However, where the performance is of a special, unique, usual, extraordinary, and/or intellectual character, the Court may force a party to perform (e.g., recording contracts).  Nevertheless, California’s “Seven-Year Rule” for employment contracts, or personal service contracts, provides that these employment/ personal service contracts may only be enforced for 7 years.

As applied to the recording industry, however, there is a qualification — while the record label may not force the band/artist to make another album after the 7  years, it may sue for money damages.  So, the record label may lose the remedy of forcing performance, but they retain a breach of contract lawsuit for damages (past the 7-year mark).  For a more in-depth (and entertaining) article on the 7-Year Rule, see attorney Gregg B. Ramer’s article here.

For information on employment or entertainment contract disputes in San Diego, contact our breach of contract attorneys by email or at 619-535-5151.