Understanding Rider Contracts: Essential Provisions and Tips

What is a Rider Contract?

Rider Clarification-What is a rider Contract
In the broadest terms, a rider contract is an attachment to a main agreement that modifies it in some way. Rider contracts may be made after the main contract has been created, or they may be generated at the same time, with the expectation that they will eventually be attached to the main contract. Rider contracts are intended to modify an existing contract in some way. These modifications often involve lengthening or shortening the statute of limitations for specific types of claims, or stating explicitly what is covered in the event that the main contract and rider do not match. In the event that a main contract omits important information that is included in its rider , the rider contract will help the involved parties to understand the contract’s intentions more clearly. Some forms of rider contracts will append likewise consent forms, intended to limit the liability of one or both of the involved parties. In some countries, rider contracts are called appendix contracts. The word "appendix" means the same thing as the word "rider" in this context. Rider contracts are commonly found in union agreements where it is necessary for a person to be employed as both a contractor and a subcontractor for the purposes of insurance and tax laws. In this situation, a union will classify them as one or the other (commonly, subcontractor). If the employee is classified as a subcontractor to avoid premium taxes, the prime contractor would be responsible for remitting payroll taxes.

Key Features of a Rider Contract

A rider contract has similar components to any other service type contract, but it will usually have some additional clauses. Whether you are a juggler, magician, vocalist, etc., it is important to define the service you will be providing for your client(s). This is where you can clarify what services will be provided, when, and where. Don’t just assume that your client knows or remembers the conversations you have had about your performance. The client might be just as busy with other tasks associated with the show as you are, and you do not want to run the risk of miscommunication.
All rider contracts should have payment terms. The contract should indicate how much the client is paying, when payment terms are due, and methods for how to make payment. Clients often make payments by credit cards, check requests, or cash—we recommend requiring a deposit or at least 50% of the total fee upon signing the contract. The remaining fee is usually due upon arrival or on the day of the performance. How the remainder of the fee is paid might depend on whether the performer is getting paid directly or if there should be a check request authorized by a board.
As noted above, it is important to define the services being provided. We recommend that you include things such as:
Payment methods are also a concern from a contractual standpoint. It is important to make sure you are getting paid in a timely manner for the work you are putting in. A clause requesting a short interest penalty if payment is delayed is a good way of making sure you and your client are on the same page. It might also be beneficial to make the contract contingent on payment of the prior performance.
Cancellation clauses are used in both service agreements and in settlement agreements. For service agreements, in almost all cases, an artist will want to be free to book other performances while they are waiting to perform. Often, an artist will be worried about getting left high and dry for a gig that was confirmed at an earlier date. On the other hand, the client might be worried about confirming the date too early in the process, and then having to change the date because the entertainer double-booked. We recommend that a cancellation clause outline each parties’ obligations if a cancellation should occur within a week (or some reasonable timeframe) of the gig. For example, if the client cancels within 72 hours of the performance, then the artist is entitled to an additional 25% of the fee. In turn, if the performer cancels within 72 hours of the performance, then that entertainer agrees to refund a portion of the deposit. Each party is incentivized to provide as much notice as possible. Of course, you should always remain flexible when trying to come up with a solution for an unreasonable cancellation.

Advantages of Implementing Rider Contracts

A rider contract is centralized whereby both parties mutually agree to the contractual terms, or requested changes, to be added to or rescinded from the original contract. In addition to being clear and precise, both parties benefit from the fact that the rider contract is a succinct addendum.
Risks are inherent for both parties in any contract. It is advantageous from a legal point of view. A rider contract is an effective way to ensure that both parties are in agreement of the updated terms, or special requested terms. It minimizes any possible ambiguity that may arise from the modifications to the original contract.
For example, if an agent books a client for a firm concert date and within moments of finalizing the booking, the agent finds out that it was booked inadvertently, a rider contract can be used to have the promoter acknowledge and agree that it will not compete against the agent for the next six months.
Offering a rider contract to another party shows a level of professionalism, communication and transparency to a relationship. Regardless of the level of the contract, a rider contract enhances, protects and preserves a relationship and helps expedite the interaction.

Common Pitfalls to Avoid

One common mistake is not specifying all of the relevant details in the contract. The contract should list the parties (names and addresses), the services performed or work done, the amounts paid (including a breakdown of any expenses), and the specific dates of the work. In addition, sometimes riders are presented at the last minute after the parties have already agreed to everything else. When this happens, it’s easy to look the other way when we see something we don’t understand. A better plan is to refuse to sign until you’ve had the chance to read through the document, note all of the unclear terms, and then have them explained to you before signing.
Another mistake is not understanding what rights the contract gives up. For example, a contract may require that all work is performed exclusively for Company A, but are you free to work for Company B on the side? If a dispute arises, does the contract dictate where any lawsuit must be filed? If you actually perform services for Company B, will that constitute a violation of this exclusivity clause? Who ends up paying attorney’s fees if there’s a disagreement? A good contract should define all key terms, including generally understood words like attorney’s fees or exclusivity. It should also specify that each party has had the opportunity to have their interests protected by an attorney and that they understand what rights they may be giving up by signing.

Rider Contracts in the Entertainment Sector

In the entertainment industry, rider contracts are common and can be quite detailed. These documents, also referred to as "riders," are often used by musicians and other performers to outline specific requirements for their performances. A concert rider is a separate document from the main agreement with a venue, and it can include everything from technical specifications to hospitality requests.
One of the most famous concert riders is that of rock band Van Halen, which included a clause about the color of the M&Ms in the band’s backstage candy dish. Although this clause is often described as quirky or humorous, it has a practical purpose. The band included a variety of detailed specifications in its rider, and if any of them were overlooked, the clause about the M&Ms served as an "in-country" test: if the venue had failed at something so simple as removing the brown M&Ms , it likely had not been attentive to the band’s other requirements, which were often quite complex and technical.
Concert riders can also include provisions for each of the band’s unique requirements. Venues are generally not required by law to accept a rider, but they may do so in order to get significant business from a band or to avoid potential problems on the day of the concert.
Though often considered mostly a musician’s tool, rider contracts can also help event organizers work with venues. Sometimes, an event organizer’s contract with a venue gives the organizer the right to impose certain requirements on the venue, but leaves the details of those requirements up to the organizer. When the specific requirements are provided in a signed contract, it can be difficult for the venue to later challenge those requirements or to back out of its commitments to the event organizer.

Rider Contract Considerations

For all contracts, a basic starting point is: (1) what is the scope of services (i.e. what are the obligations); (2) how much is the compensation; and (3) when will particular actions be performed (e.g. when rehearsals, clinics, private lessons, workshops, and/or check payments will occur). The musician should closely read and understand any type of contract before signing. With rider contracts, if there is a budgetary issue, the rider necessitating the additional services should not be contractually binding on the performer in a way that conflicts with their budgeting constraints. It is important to keep in mind that it might still be cost effective for a performer to provide services that are not included in the initial offer letter rider, even if they are to be provided without contractual obligation.
If there is a dispute regarding the scope of services to be provided, if there is a disagreement on whether a performer actually provided the services as outlined in the offer letter rider or a dispute regarding the compensation due for the quality or quantity of the services provided by the performer (as offered in the rider), if there is any concern that the rider is too vague to avoid such issues, or if there is any other concern, it is recommended that the performer seek out a music attorney to review the specific facts of their situation and offer legal advice that is tailored to their particular circumstances. If the rider has been included in the original offer letter (and not added as an attachment after the fact), the hire can be specifically challenged for its vagueness, but that can be an expensive challenge unless the difference is significant.
Although it is usually better to have the related offer letter and rider reviewed all at once, the performer can insist on a change in the proposed services if they are attempting to minimize the dated owner’s liability for claims related to the additional services. If the performer cannot get satisfactory changes made, they can always decline the position. A carrier can never go back on the rider offer since they accepted the additional scope of services, but they are free to decline the extra services if they fear the rider will interfere with other work. As long as a carrier’s decision is away from the offer letter/rider context (or simultaneously honors the rider while making a statement of unwillingness to perform particular artistically" based services), the carrier should be under no liability for loss of money to decline over-extension in the rider. This is unless the rider is untenable for the good of business (i.e. causes too much distraction).

Best Practices for Drafting a Rider Contract

When drafting a rider contract, it’s essential to use clear and precise language. Any ambiguity in the written terms may result in protracted disputes over the meaning of the rider contract, making the addition of the rider an unnecessary source of complication and expense. Use common terminology with well-known meanings, instead of creating new terms.
For example, instead of using the phrase "subject to the buyer obtaining financing", use the term "subject to the buyer obtaining a satisfactory approved loan". Avoid ambiguities by specifying whether the buyer is not required to move forward with the contract in the case of an unsatisfactory response from a lender, or if the buyer must provide notice of financing within a particular time-frame.
Similar clarity is necessary when defining contingencies. The rider should specify the actions that constitute satisfying the contingencies, the consequences of failing to satisfy the contingencies , and the timeframe by which the contingencies must be satisfied.
A common contingency requires the buyer to sell their existing home before closing on the new property. The rider should be clear about whether the buyer must close on the sale of the existing home prior to closing on the new property, or whether they can close on the sale of the new property under a seller-funded second mortgage, with the requirement to sell the existing home satisfied within a specified time after closing. The rider should also specify what happens if the buyer fails to satisfy the contingency.
Lastly, always include spaces for the signatures, initials, and dates of the parties. Even if you’re expressing that no changes will be made to the seller’s standard contract, or if the changes are negotiated verbally, you should still document the changes in writing and make sure the parties sign below the changes.
Working with a Nevada real estate attorney can help you navigate the drafting process for a rider contract. This can help ensure that the contract effectively meets the needs of the parties and is enforceable under Nevada law.