Restraint of Trade in the Music Industry in Sri Lanka- Sterilization after Limelight?

In recent years, the music industry has become a rapidly-growing lucrative field, as a result of the booming reality show culture. However, potential artists do not remain in the field for years, except for few successful cases. One of the possible reasons for this phenomenon is the agreements these performing artists have to enter into; either with the reality media or the recording firms which restrain their personal freedoms. Little is known, however, about the validity and enforceability of such contracts. In this context, this paper aims to examine this issue from the perspective of contract law relating to restraint of trade in Sri Lanka. The underlying rationale of contract law is to support and promote the public policy of trade, freedom of contracts and competition. Therefore, restrictive covenants are prima facie void, unless the restrictions contained are justifiable as illuminated by Lord Macnaghten in Nordenfelt v. Maxim Nordenfelt Guns and Ammunition Co. Furthermore, in view of the relatively unequal bargaining power of the parties, the duration of the contract and the exclusivity of the services, it might also be argued that such kinds of contracts are void as judicially examined in ZangTumb Records Ltd and Another v. Holly Johnson. Interestingly, however, as reflected in Silverstone Records Ltd. v. Mountfield and Others (The Stone Roses Case) , the court has been sympathetic to the fact that recording and publishing companies hesitate to invest huge sums of money in an artist without some form of protection on any future return. Thus, it is a matter of balancing of competing interests involved between the recording or the media company and the artist. This study finds that the performers in the music industry in Sri Lanka are particularly vulnerable due to the restraint of trade contracts. In dealing with this scenario, the emerging case law jurisprudence from other jurisdictions may be used as a guide for Sri Lankan courts. Furthermore, there is evidence that an artist, who is in a relatively small sized market like Sri Lanka, would not choose the path of litigation since such a step would no doubt add a negative reputation to an up-coming artist. The research findings indicate a need for a legislative intervention, even though an introduction of a new law alone would not be the panacea for the problem