Cameo Clips

A 1989 management agreement between musician Trent Reznor and his manager John Malm wasn't unconscionable, a Manhattan federal district court decided. Reznor v. J. Artist Management Inc., 04 Civ. 3808. Malm, who was a part-time music promoter in Cleveland, where Reznor's career was launched, began managing Reznor in the 1980s. After Reznor's group, Nine Inch Nails, signed a recording contract with TVT, Malm retained attorney Michael Toorock, who he had hired to represent Reznor's interest in the recording contract negotiations, to prepare a written management agreement. Toorock then used a management agreement for another client to which he added material terms supplied by Malm, including a 5-year term and commission rate, so that Malm and Reznor “could see what a management agreement looked like” (though Toorock claimed he didn't intend to represent either party as negotiations progressed). Reznor subsequently signed the agreement when Malm presented it to him.

In response to Reznor's claim that the agreement was unconscionable, the district court noted: “There is no allegation here that Reznor lacked bargaining power relative to Malm or that Malm pressured him into signing any deal. … While it is possible that Reznor could have commanded more favorable terms [eg, Malm's commission was based on 20% of artist gross income] had he driven a tougher bargain, there is no admissible evidence that the objected-to provisions in the management agreement were unusual for the industry, let alone that they violated any public policy.”