Hot for Contracts: How Van Halen Illustrates the Importance of Reading a Contract

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Surrounding the word “contract” is an air of importance and gravity.  Indeed, one does not need a lawyer to understand that contracts carry serious legal weight­, and accordingly, potentially severe consequences for their breach.  However, contrary to popular belief, these solemn covenants are not limited to complex business arrangements between sophisticated executives.  Contracts—and their consequences—govern virtually every aspect of our daily lives in one form or another.

With many of us living life in a rush, even those who know (or should know) of the weight accompanying contractual obligations often quickly sign agreements that effectively relinquish various rights.  Rights relinquished via contract can range from releasing troves of personal information to social media apps to giving up permanent ownership of a firstborn child all without even so much as reading the agreement.

The importance of reading every term in a contract cannot be overstated—after all, that is why they are included, right?  The legendary rock band Van Halen provides us helpful insight regarding the uses that particular material terms in a contract may serve and how everyone can better understand contracts.

Van Halen’s Eruption^[1]

While fans mourn the loss of Rock ‘n Roll Hall of Famer Eddie Van Halen this week and reflect on his musical feats, the band Van Halen also made history for their approach to contracts. Van Halen, the famous 1980s American rock band, is still known for its youthful bravado, innovative musical techniques, and exhilarating live performances.  Guitarist Eddie Van Halen was an inspiration for a generation of budding musicians, leading the inspired to further push the limits of their playing.  Similarly, original vocalist “Diamond” David Lee Roth brought outrageous exuberance that was central to elevating the group to the quintessential American rock band it became known for—that is, one built on the foundations of solid musicianship and unbridled excess.

Akin to their “everything-bigger-is-better mantra,” as Van Halen grew in popularity so did its theatrical presentation brand, which was the overarching feature illuminating its live shows.  As a mild example, Roth touts Van Halen as being the first band to take 850 parabolic, aluminized reflector lamps across the country on tours.  But at what was boasted to be the “biggest production ever” at the time, the band realized they needed a way to make certain that all of their technical requirements were met to ensure a smooth and successful show without any major issues.  This realization came as a result of earlier shows where there were serious dangers and accidents.  During those incidents, crew members were nearly electrocuted and structural issues arose due to the concert promoter’s and venue operator’s failure to read all the technical specifications necessary for the execution of the live shows.

Wisely wishing to avoid further liability, Roth and the band needed a way to make certain that the show would be outfitted appropriately for a “gigantor, epic-sized Van Halen production” and to prevent something (like this sort of tragedy) from again happening to a member of the band or the crew.  Enter the infamous Van Halen contract “rider.”

Somebody Get Me a Rider^[2]

In the field of contract law, a “rider” is not an unfamiliar fixture. Every law school across the country teaches them as part of the first-year curriculum in contract courses, and they are frequently used in contracts drafted for clients. In practice, riders can be found in everything from insurance policies to legislation. The rider is an excellent tool to make changes and additions to the formal contract without rewriting the entire instrument.

In particular, the use of a contract rider has become standard practice in the music industry to regulate every aspect of live shows.  The chaos that ensues when a band reaches its performance venue can be overwhelming.  This makes it vital for promoters and venues to work out and establish requirements addressing even the most mundane and vestigial issues, such as office space for tour personnel and the necessary number of security guards.  Technically speaking, the rider often functions as a sort of instruction manual for the venue to hopefully eliminate any confusion on how to set up the stage and what to include in the performers’ dressing rooms.  Essentially, the rider ensures that things run smoothly during the show.

Van Halen was one of the first major rock bands to make tour stops in tertiary markets.  In these smaller markets in the 1980s, venues were not often equipped with the same power supply and even loading space that large arenas and stadiums were.  As Roth describes it, “there were many technical errors, the girders couldn’t support the weight of the stage, or the doors weren’t big enough to move the gear in.”  Large amounts of people, small spaces, and lots of flowing electricity can make improperly-managed concerts a hazardous place to be.

Van Halen needed a way to guarantee that the technical precautions and specifications in their riders were being taken seriously, and it did so in a novel way.  In the 53-page technical rider, buried within the “Munchies” section, Van Halen would request a large bowl of M&Ms, specifying, “no brown ones,” for their backstage hospitality suite.  Upon their arrival at the venue, if the band checked the bowl and found the illicit brown M&Ms, they understood that it was likely that other more important technical requests were not followed.

Thus, the brown M&Ms clause served as an early warning of more severe problems with the electrical and lighting needs and that the contract had not been satisfactorily read.  However, if Van Halen arrived at a venue and the proper selection of M&Ms was there greeting them, they could be better assured that crucial details—such as the meticulous spacing of their 15-amp voltage sockets providing 19 amps of electrical current—were being adhered to, and the show could go on without a hitch.

Everybody Wants Some!!^[3] Lessons About Contracts

The “Brown M&M Test” has become wildly and widely circulated as pure rock star excess, but it reiterates a valuable lesson: contract terms have an important meaning.  Failing to adhere to the details of a contract could spell large consequences.

North Carolina courts tend to agree.  When a party that has the capacity to contract signs one without reading its material terms, they are nevertheless bound by those specific terms.  See, e.g., Ussery v. Branch Banking & Tr. Co., 368 N.C. 325, 336 (2015) (certifying one who signs a legal instrument may not base action on his ignorance); Leonard v. S. Power Co., 155 N.C. 10, 11 (1911) (finding the law will not relieve one of a contractual duty when he did not understand the writing and did not attempt to do so).  Indeed, courts in North Carolina are generally unforgiving to parties that raise the defense of failing to understand the specific terms.  See, Johnson v. Johnson, 259 N.C. App. 823, 832 (2018).  A party accepting an offer has an absolute duty to read and understand that offer.

On a handful of tour stops where there were brown M&Ms, Van Halen would have to conduct a detailed check to identify other possible violations in the specifications.  Contained in the rider was a clause that any deficiencies would result in forfeiture by the promoter at full compensation.  Applying North Carolina law, the promoters and venues that did not comply with the strict stipulations of the rider would have no excuse for their nescience and be faced with costly ramifications.

Fair Warning^[4]

Van Halen’s “Brown M&M Test” provides a helpful tool for identifying a party’s commitment to the contract.  In a perfect world, the test is unnecessary, and all contracting parties read and abide by the terms they agreed to.  However, we do not live in such a world, and using a method like adding something absurd to a contract sounds like an easy enough way to make sure a contractual counterpart is paying attention to the specifics of the agreement.

On the other hand, tests mimicking that of Van Halen’s can create unnecessary wastes in time and resources along with burdening parties with arbitrary duties that have nothing to do with the ultimate performance of the contract.  If overused, parties further run the risk of losing sight of the actual purpose the contract is intended to serve.

The most important takeaway to consider is this: while reading contracts can be incredibly tedious, how else can a party know what they are really agreeing to if they do not even know the terms of what they are signing?  With terms that seem unclear, the best practice is forthright communication between all parties to clear up any ambiguities so that the contract may be fulfilled as intended.

Freedom of contract and the parties’ ability to decide for themselves what responsibilities to undertake is a foundational principle of contract law.  Equally important is the idea that parties to contracts will hopefully emerge better than where they started because of their agreed-to union.  In Van Halen’s words, do not go a “Runnin’ with the Devil”^[5]; instead, take it from David Lee Roth and read your contracts.

In Memory of Eddie Van Halen (January 26, 1955 – October 6, 2020)

 

[1] VAN HALEN, Eruption, on VAN HALEN (Warner Bros. 1978).

[2] VAN HALEN, Somebody Get Me a Doctor, on VAN HALEN II (Warner Bros. 1979).

[3] VAN HALEN, Everybody Wants Some!!, on WOMEN AND CHILDREN FIRST (Warner Bros. 1980).

[4] VAN HALEN, FAIR WARNING, Warner Bros. 1981.

[5] VAN HALEN, Runnin’ with the Devil, on VAN HALEN (Warner Bros. 1978).