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<b>Decision of Note: </b>Audit Clause Sinks Allman Brothers' Royalty Claims
The U.S. District Court for the Southern District of New York decided that a breach-of-contract suit by the Allman Brothers Band (ABB) alleging royalty underpayments from Jan. 1, 2000 through Dec. 31, 2003, was barred by the limitations provision of the band's recording agreement. Allman v. UMG Recordings, 06 Civ. 8327.
The district court first examined a provision in the recording agreement that stated that all royalty statements were binding on the band 'unless specific objection, in writing, stating the basis thereof, is given to UMG within two (2) years from the date rendered.' The court found this to be 'an enforceable incontestability provision' that barred the ABB's claims to all but one of the six semi-annual statements challenged.
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