Anytime a person places their trust in another person to handle
things on their behalf, you have what is called a fiduciary relationship.
A fiduciary is a person in whom another person has placed their trust.
It's a legal concept that applies to personal manager's agreements.
You might not see any specific provision alluding to that
in a personal management agreement, but it is implied in most states.
A fiduciary relationship means the person in whom you placed
your trust to look out for your benefit has to do exactly that.
They have to put your interest in this case, in a personal management agreement,
the artist's interest,
the manager has to put the artist's interests above their own.
In other words, the deals that they strike, the type of activities they
pursue, have to benefit the artist first before benefiting the manager.
If a manager breeches that responsibility,
the artist can sue them to break the contract.
I'll give you an example.
There was an act in the beginning in the first decade of the century that had
a big record with a record company.
And by big record I mean it sold millions of copies.
And their personal manager, unbeknownst to them,
entered into a consultant's agreement shortly after that
success with the very record company that the artist was signed to.
And the manager didn't tell the artist that they had a consultant's agreement.
In other words, the manager was being paid thousands of dollars a month as
a consultant with the record company that the artist was signed to,
which could clearly be considered
putting his interest before that of the artist, in that, should, at some point,
the artist say, you know, you need to go in and really renegotiate our contract,
and try to get much more money for us, the manager's position could be compromised
because they're receiving a monthly check from the record company.
That resulted in a lawsuit between the artist and
the personal manager that was eventually settled.
But, that's an example of a claim for a breach of fiduciary responsibility.
In addition to the fiduciary relationship, you also have another provision in
a personal management agreement that's very important.
It's called the Power of Attorney.
The Power of Attorney is a provision that basically states that the manager
has power of attorney from the artist
to do things that the artist could do, anything the artist could do.
Sign checks.
Enter into agreements.
All of these things are gonna be very important to the artist, and
it's advisable for the artist to try to limit the power of attorney so
that the manager can only sign for certain types of activities, say,
a contract for only a few days as opposed to a contract for a number of years.
You can limit the amount for checks that can be signed by the personal manager.
Many entertainers say always sign your own checks.
Well, that can become very difficult when an artist is on the road performing a lot.
So, most manager's agreements have power of attorney clauses, and
it's important for
artists to recognize that they can place limitations on the power of attorney.