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Clause & Effect
Record-Distribution Agreements/ Contract Breach. The U.S. District Court for the Eastern District of Michigan decided that unresolved issues of fact as to whether a distributor or a record label abandoned a record-distribution agreement precluded summary judgment for either party on breach claims by the distributor. TeeVee Toons Inc.(TVT) v. Overture Records, 05-71243. TVT and Overture Records entered into a five-year agreement under which TVT would press and distribute Overture's product. Overture then entered into an exclusive licensing agreement with artist Esham Smith and the band Natas for the artists' existing product, and an exclusive recording agreement for the artists' new product.
A notice-and-cure provision in the TVT/Overture distribution agreement stated: 'Other than a breach of the exclusivity provisions hereof, no breach of this Agreement by Overture shall be deemed material unless within 60 days after TVT learns of such breach, TVT serves written notice on Overture specifying the nature thereof and Overture fails to cure such breach, if any, within 30 days after receipt of such notice (or 10 business days in the case of a failure by Overture to pay a sum certain). No breach of this Agreement by TVT shall be deemed material unless within 60 days after Overture learns of such breach, Overture serves written notice on TVT, specifying the nature thereof and TVT fails to cure such breach, if any, within 30 days after receipt of such notice (or 10 business days in the case of a failure by TVT to pay a sum certain).'
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