Judicial Approval of Contracts With Child Entertainers
In this era of media giants like Disney and Viacom/Nickelodeon creating shows for a younger and younger demographic, child TV stars and pre-teen musical artists are in ever-increasing demand and wielding ever greater power in the entertainment industry. It is almost inevitable that many practitioners in the entertainment field will eventually encounter the predicament of dealing with a personal services contract which involves a contracting party under the age of 18. The dilemma is that the minor may disaffirm the contract at any time during minority or upon reaching majority, thereby seriously jeopardizing the other party's financial investment in developing such an artist.
Practitioners should know that the mere exercise of having the minor's parent or guardian co-sign, approve or "guarantee" the contract does not resolve the problem. The minor may still disaffirm the contract on the ground of infancy, asserting that the parent or guardian lacked authority to make the contract.
Several states have laws regarding judicial approval of contracts with minors. New York's Arts and Cultural Affairs Law §35.03 provides for judicial approval of certain contracts for services of minors or "infants" under the age of 18. The provisions of the statute specifically relate to performing artists (such as actors, dancers and musicians) and players of professional sports. The arduous procedure involved, however, can be expensive for the client and may prove to be a difficult gauntlet for the practitioner to run. Moreover, the probability of actually achieving court approval is discouragingly low.
Many judges, particularly outside the City of New York, are wary of approving what are often incomprehensible contracts replete with the convoluted formulas and the impenetrable nomenclature of the entertainment business. It is understandable that a judge's trepidation with respect to certifying that a minor has adult responsibility for contractual obligations might be analogous to the reluctance a judge would experience when requested to declare someone judicially incompetent or insane.
As a practical matter, a proceeding for judicial approval of a minor's contract under New York's Arts and Cultural Affairs Law §35.03 is commenced by filing a verified petition. It can be filed by a parent, the guardian, a relative of the infant or any interested person or entity on the infant's behalf (e.g., the record company or film studio with whom the infant is contracting).
Under the statute, the petition may be made to the Supreme Court or the Surrogate's Court in the county where the infant resides. For proceedings commenced in New York County, there is a specific judge designated to handle such matters in the Supreme Court in Manhattan. If it so happens that a guardian has been appointed or qualified in New York, then the petition should be made to the court in which the guardian was appointed or qualified.
If the infant is not a resident of New York, then the petition may be filed in any county in which the infant is to be employed under the contract (which includes New York City if the record company or film studio contracts is in New York). In the event that the determination is made to file in the Supreme Court of a particular county, it is advisable to check with the clerk of the corresponding Surrogate's Court. The Surrogate's Court may require that special forms be completed and filed together with the petition to the Supreme Court, specifically with respect to appointment of a guardian.
A complete list of the information which must be included in the petition is set forth in Arts and Cultural Affairs Law §35.03(5) subsections (a) through (k).
Most importantly, the petition must stipulate the term and all other relevant, material terms of the agreement. Previously, the petition had to contain a statement that the term of the contract during which the infant was to perform could not extend for a period of more than three years from the date of approval of the contract. However, amended section 35.03(d) as it now stands provides that "if the court finds that such infant was represented by qualified counsel experienced with entertainment industry law and practices" then the contract could be for a period of not more than seven years. Moreover, certain covenants and conditions (e.g., re-recording restrictions) may also be approved for an extended term under the same conditions if the court finds them reasonable.
The petition must identify the nature of the infant's employment and the compensation to be paid. In addition, the petition must contain a statement of who, if other than the infant, is entitled to the infant's earnings and facts regarding the property and financial circumstances of the parent or parents so entitled. The petition also must include a schedule showing the infant's projected "gross earnings," estimated outlays and estimated "net earnings", as such terms are defined in §35.03(3)(b).
If no guardian of the infant has been appointed or qualified in New York, the petition also must request the appointment of a limited guardian. The petition may nominate a person to be appointed as limited guardian solely for purposes of establishing a trust account for this proceeding and should set forth the reasons why the person nominated would be proper and suitable. A parent or other petitioner is not precluded from being appointed as limited guardian by reason of his or her interest in any part of the infant's earnings or in the contract, provided such interest is disclosed. The court also has the option to appoint a special guardian to represent the interests of the minor at any time after the petition is filed.