Most creator and artist disputes trace back to one reality: people negotiate money first and discover control later. In a music or creator agreement, the grant-of-rights clause often determines who can exploit the work, license it to others, change it, enforce it, and collect revenue from it. Those outcomes usually hinge on a few words, assignment vs. license, exclusive vs. non-exclusive, territory, term, and media, and how those words interact with royalty clauses, audit rights, and termination/reversion rules.

Cross-border deals increase the stakes. A contract might say “worldwide,” but royalty collection, enforcement, and statutory rights can still differ by country. It is common to see Canadian creators sign agreements governed by New York, California, Tennessee, or Delaware law, while the exploitation plan includes Canada, the U.S., and beyond. That makes it essential to understand both legal frameworks and the practical royalty pipelines.

Start with the two copyrights that drive music revenue

Many people use “the song” as shorthand, but music typically involves at least two distinct copyrighted works:

1. the musical composition (music + lyrics), and
2. the sound recording (the fixed recorded performance/production). 

These rights do not automatically travel together. A deal that transfers the master (sound recording) might leave the composition with the writers/publisher, or the opposite. It is also possible to split rights by territory, by medium (film/TV sync vs. streaming), or by term.

A practical contract review usually begins by mapping exactly which copyright(s) the agreement touches, and which revenue streams each copyright feeds.

Assignment vs. license: the legal difference that changes control

A contract can give rights away in two primary ways:

• Assignment: you transfer ownership of some or all of the copyright to someone else.
• License: you keep ownership but grant permission for defined uses.

Creators often assume a license is always “safer,” but a license can be drafted so broadly (exclusive, worldwide, perpetual, fully sublicensable) that it functions like an assignment in practice. Conversely, an assignment can sometimes be narrow (limited rights, limited territory, limited term) and paired with strong reversion triggers. The key is reading the grant with the royalty, audit, and termination sections as one system.

The U.S. “work made for hire” concept is not interchangeable with Canadian ownership rules

U.S. contracts frequently include work made for hire language. Under U.S. law, a “work made for hire” is generally either (1) a work prepared by an employee within the scope of employment, or (2) a specially commissioned work in certain categories if the parties expressly agree in a signed writing. 

Sound recordings are a common pressure point. In 2000, Congress temporarily added sound recordings to the list of specially commissioned works that could qualify as ‘work made for hire,’ and then repealed that change, so whether a particular recording is work-made-for-hire typically turns on the standard statutory test and the facts of the relationship.

In Canada, the analysis is different. Canadian ownership often starts from the author being the first owner (subject to specific exceptions), and Canadian moral rights add another layer of creator control. When a Canadian creator signs a U.S.-style clause without understanding how it translates (or doesn’t) under Canadian law, the result can be surprises about who owns what, and which remedies exist.

Reversion and termination: Canada and the U.S. each have built-in “claw-back” rules

Even the strongest grant clause does not exist in a vacuum. Both Canada and the U.S. have statutory mechanisms that can override “perpetual” deal language—though they work very differently.

Canada: statutory reversion 25 years after the author’s death

Where the author is the first owner of copyright and assigns copyright or grants an interest during life (other than by will), Canadian law provides that the assignment/grant is not operative to vest Canadian rights beyond 25 years after the author’s death, and the reversionary interest devolves to the author’s legal representatives as part of the author’s estate, notwithstanding any agreement to the contrary.

This matters for catalogues that remain valuable for decades. It also affects long-term planning for heirs and estates, especially in creator businesses.

U.S.: termination of transfers under 17 U.S.C. § 203

For many grants executed on or after January 1, 1978 (and that are not works made for hire), U.S. law allows authors to terminate certain transfers and licenses under 17 U.S.C. § 203, subject to strict timing and notice rules. Upon the effective date, the rights covered by the terminated grant revert to the author/termination interest holders, with important limitations, including that certain derivative works created under the original grant may continue to be utilized.

Termination is not automatic; it is a process, and the notice windows, eligible signatories, and effective dates are highly time-dependent and fact-specific.

Royalties: the contract defines the math, but the system defines the money flow

Royalty disputes often come from the gap between (a) what creators think “royalties” means, and (b) what the agreement actually pays on.

Performance royalties (composition side)

In the U.S., performance royalties for musical works are commonly collected and distributed through performing rights organizations such as ASCAP and BMI. 
In Canada, SOCAN licenses music use and collects and distributes royalties in Canada and internationally through reciprocal relationships. 

U.S. digital mechanical royalties (composition side)

For U.S. interactive streaming and certain digital deliveries, the Mechanical Licensing Collective (MLC) administers the blanket mechanical licensing system created by the Music Modernization Act framework, collecting and distributing eligible mechanical royalties. 

The contract layer: what creators should watch

Even when the collection systems are functioning, your contract still decides how money is calculated and when it gets paid. Key clauses include recoupment of advances, cross-collateralization across projects, “net” definitions (and allowed deductions), reserves, payment timing, and statement detail. Audit rights matter because they provide the mechanism to verify whether the reporting and deductions match the contract.

Moral rights and credit: Canada’s rules can change negotiation leverage

In Canada, the author’s moral rights include the right to integrity and attribution (or anonymity). Moral rights may not be assigned but may be waived in whole or in part. 

This becomes practical in creator deals that anticipate edits, remixes, brand integrations, or localization. A broad moral-rights waiver can permit substantial changes and weaker credit protections. A tailored waiver can be drafted to allow what the project truly needs while preserving meaningful attribution and integrity protections where possible.

Indemnities: the clause that can turn a small fee into a large risk

Most creator contracts include warranties (originality, non-infringement, no conflicting grants) and an indemnity that shifts risk to the creator if a third-party claim arises. The “hidden” risk is often scope: is the indemnity capped, is it limited to proven breaches, does it cover defence costs, and who controls settlement? This is especially important in music where samples, interpolations, producer points, featured artists, and collaborator splits can introduce rights complexity.

One high-impact list: what to confirm before you sign

• Is the grant an assignment or a licence, and is it exclusive? What are the territory, term, and media limits?
• Does the agreement use “work made for hire” language, and is it appropriate for the work and jurisdiction? 
• What are the royalty base and deductions, recoupment rules, and your audit rights?
• Are you being asked to waive moral rights (Canada), and is the waiver broader than necessary? 
• What contractual reversion/termination triggers exist, and how do they interact with Canadian reversion and U.S. termination rights? 
• What warranties/indemnities are you giving, and are there practical limits (caps, exclusions, notice, defense control)?

A practical way to protect ownership and revenue before the ink dries

Creator and music contracts often look standard because the headings repeat across the industry. The risk is that small drafting choices, one word in a grant clause, one definition in “net receipts,” one sentence in an audit or waiver, can reshape ownership and earnings for years. That is even more true when a deal is intended to operate in both Canada and the United States, where statutory rights and royalty pipelines differ.

Need help interpreting a music, creator, or artist agreement that touches Canada and the U.S.? Our Corporate & Commercial team can review grant-of-rights language, royalty and audit provisions, reversion/termination considerations, and indemnities so you understand what the contract actually gives away (and what it does not).

FAQs — Music and creator contracts in Canada and the U.S. 

Is “work made for hire” always enforceable in a music contract?

Not automatically. U.S. law defines “work made for hire” in specific ways (employee works and certain commissioned categories with a signed agreement). Whether it applies depends on the facts and the type of work.

What’s the difference between the composition and the master?

The composition is the underlying music/lyrics; the master is the fixed sound recording of a performance/production. They are separate copyrighted works and can be owned or licensed separately.

What is Canada’s “25 years after death” reversion rule?

Where it applies, Canadian law limits lifetime assignments/grants by an author who is the first owner so that Canadian rights revert to the author’s estate 25 years after death, notwithstanding any agreement to the contrary.

Can U.S. copyrights be terminated and recaptured later?

In many cases, U.S. law allows termination of certain grants under 17 U.S.C. § 203 (for grants executed on or after January 1, 1978, that are not works made for hire), subject to strict timing and notice requirements, and with limitations for derivative works created under the original grant.

Why do audit clauses matter if I trust my label/publisher/distributor?

Because audit provisions define how statements can be verified, what records are accessible, how disputes are handled, and what happens if underpayments are found. They’re less about distrust and more about accountability and clarity.