Unconscionable Contracts In The Nigeria Entertainment Industry: A Legal Wake-Up Call For Nigerian Artists In View Of The Recent Wizkid And Banky W, 80-20% Deal

Lanase Usman A[1]

1.0: INTRODUCTION

It is not uncommon in Nigeria entertainment industry that record labels sign artists who have distinguished themselves among their peers. This act appears gratuitous. However, due to the lucrative nature of the entertainment industry in Nigeria, record labels are more concerned about the commercial aspect of the relationship, as the process of “blowing” (promoting) an artist in Nigeria is highly demanding, financially. The artistes on the other hand leverage on the record label to showcase their unique talent which comes with immense financial benefits and fame as they progress in their career.

As can be gleaned from above, on the face of it, it appears that the relationship is symbiotic. This symbiotic relationship is with respect to its mutualism. In biological parlance, a relationship is deemed mutual when two different species relating together both benefits in their relationship and interaction[2]. Artistes often accepts and sign record label agreement wholeheartedly out of desperation to become famous without taking note of the long-term consequences of the contract/agreement they have signed. At the long run, it appears that most of the relationship between artistes and their record labels is parasitic, where one specie benefits immensely at the expense of the main host.

Recently, a Nigerian entertainment lawyer, Oluyemisi Falaye mentioned that Banky W still earns 80% from Wizkid’s first two albums till this moment[3]. This comment has reignited conversations around the nature of music contracts, the fairness of such deals, and the legal framework that governs them.

This article therefore seeks to discuss the nature of unconscionable contract and the implication of same from the perspective of entertainment law. It examines how unconscionable contracts also known as (Adhesive, one-sided, unfair, or oppressive contracts) can trap talented creatives in exploitative relationships, what the law has to say about it, and how artistes can guard themselves against exploitative deals.

2.0: What Is an Unconscionable Contract from entertainment law perspective?

In simple terms, an unconscionable contract is an agreement that is grossly unfair to one party, typically due to an imbalance in bargaining power[4]. It offends not just legal reason, but moral standards. This presents the weaker party in the transaction with a “take it or leave it” opportunity. Unconscionability[5] in this context refers to a situation where a contract (or part of it) is so unjust or overwhelmingly one-sided in favor of the party who has superior bargaining power that it shocks the conscience of the court[6]. In situations like this, courts may refuse to enforce such contract to prevent injustice if it finds out that one party was unduly taken advantage of, especially where there’s evidence of[7]:

• Overwhelming inequality in bargaining power
• Lack of legal advice or proper understanding of the terms
• Harsh or one-sided clauses that result in oppression or injustice

In the realm of entertainment law[8], unconscionability arises most often in situations where young, inexperienced artistes who are desperate for fame are presented with “take-it-or-leave-it” deals by labels, managers, or promoters with far superior knowledge, experience, and legal backing.

In most cases, these artistes are merely presented with an already drafted agreement to sign without affording the other party the opportunity to negotiate the terms and conditions of the so-called agreement. It is either the artiste signs or there is no deal. Expectedly, most young and naive artistes sign them out of desperation.

While it is true that parties are bound by their agreement[9], provided same was entered into voluntarily without duress, court has on different occasions acknowledged the fact that a party may be made to sign an oppressive agreement and court will not enforce such contract which seeks to take undue advantage of a party.

In Nigerian, although the term “unconscionability” is not always explicitly used, courts however, have jurisdiction to set aside contracts when there is element of undue influence, fraud, threat, coercion, misrepresentation[10]. Courts in some instances may set aside a contract to prevent oppression and unfairness.

David Andy[11] noted that unconscionable bargain is an offshoot of the equitable jurisdiction of a court[12]. It is a transaction that is fraught with unfairness and lack of honesty in the terms and conditions of the bargain, portraying that one party had taken advantage of the other.¹¹

In the case of Alhaji Musa Bua v. Bashiru Dauda,¹² the Supreme Court noted as follows:

There are cases where a bargain is seen to be unconscionable or where there has been equitable fraud, victimization, taking of advantage, overreaching or other such palpable inequity or unfairness which affected the conscience of the plaintiff and which might justify the intervention of equity to come to his assistance to avoid the bargain.

To determine if a bargain is unconscionable, the case of Alec Lobb (Garages) Ltd. v. Total Oil (Great Britain) Ltd, 1885 1 ALL ER 303 comes to mind. In this case, it was observed that three elements have to be established before a court can interfere in a contract on the ground of unconscionability[13]. These elements include[14]:

1. It must be shown that one party has been at a serious disadvantage to the other, whether through poverty, or ignorance, or lack of advice, or otherwise, so that the circumstances existed of which unfair advantage could be taken.

2. It must be shown that this weakness of one party has been exploited by the other party in some morally culpable manner.
3. It must be shown that the resulting transaction has been not merely hard or improvident, but overreaching and oppressive.

Dovetailing from the above analysis, it is evident that most of these record label contract, not all, with young artistes falls within the purview of unconscionable contract. These contracts are often pre-drafted and standardized contracts whereby one party has all the negotiating power, and the other is merely expected to sign. In such cases, the weaker party (the artiste) has little to no room for negotiation.

Let us take for an instance, a young artiste promised to be signed into a record label deal for the first time, studio time was promised, publicity (local and international), and distribution of their music has also been promised. These promises are so attractive that most young artistes sign the contract immediate while unknowingly parting away with their rights to future royalties, and creative control for an indefinite period, with no independent legal advice. Typically, this arrangement reveals imbalance of power, lack of negotiation, and harsh terms which makes the three elements stated above to be realized.

This principle has been applied in plethora of cases in some foreign jurisdiction like India, United Kingdom and United State of America. In the case of Central Inland Water Transport Corporation v. Brojo Nath Ganguly, 1986 AIR 1571, the Supreme Court of India maintained the position that:

The types of contracts to which the principle formulated in this case applies are not contracts which are tainted with illegality but are contracts which contain terms which are so unfair and unreasonable that they shock the conscience of the Court. They are opposed to public policy and required to be adjudged void.

Similarly, in the case of Life Insurance Corporation v. Consumer Education and Research Centre (1995 INSC 367) it was observed that the unconscionability principle will apply where there exists inequality of bargaining power as a result of great disparity in the economic strength of the parties in a contract. The principle also applies where a party has no choice, or rather no meaningful choice, than to agree to the terms and condition of the contract, however unfair and unreasonable. In the United Kingdom[15], the concept of unconscionability is closely related to unfair contract terms as provided for under the Unfair Contract Terms Act 1977 and the Consumer Rights Act 2015.

In the case of Lloyds Bank Ltd v Bundy [1975] QB 326[16], the court recognized unconscionable bargains where one party exploits a significant imbalance in bargaining power. The court held that the bank took advantage of the elderly defendant’s trust and confidence, making the transaction unconscionable.

The above decision is similar to the position of the court in CIBC Mortgages plc v Pitt (1993) UKHL 7. In that case the House of Lords held that a loan agreement signed under undue influence, where one party was in a position to dominate the will of the other, could be voided.

Similarly, in the United State, the Uniform Commercial Code (UCC) and various state laws address unconscionable contracts. In the case of Williams v. Walker-Thomas Furniture Co. 350 F.2d 445 (D.C. Cir. 1965) the court held [17]:

where there is an absence of meaningful choice on the part of one of the parties together with contract terms which are unreasonably favorable to such party, such contract may be set aside. Meaningful choice can be determined by the equality of bargaining power and a reasonable understanding of contractual terms that each party has when entering into the contract.

The court further established a two-prong test for unconscionability: procedural (lack of meaningful choice) and substantive (terms unreasonably favorable to only one party)[18].

The case of Campbell Soup Co. v. Wentz[19] is also apposite. In this case, a contract term which gives only one party the right to modify a contract was found to be unconscionable. This is typically common in Nigeria entertainment industry where only labels have right to modify contract and the artiste on the other hand has no right to vary or modify the terms of their label agreement which makes the agreement lack mutual fairness in terms of contractual obligations. Courts would exercise its power to void, vary or modify any such contract which provisions are excessively stringent and oppressive to a weaker party if such party approach the court and adduce evidence in that regard as the court is not a father Christmas.  

3.0: The Wizkid and Banky W Case

It is important to state categorically at this juncture that this writer have not read the full details of Wizkid’s early contract with Banky W’s EME[20]. The document remains private. However, based on the allegation by Oluyemisi Falaye that Banky W still receives 80% of Wizkid’s royalties[21], this article becomes necessary to educate artiste about the consequence of a long-term revenue structure that favors the label disproportionately even after the exit of an artiste.

Assuming this claim is accurate, several legal questions come to mind:

1. Was Wizkid independently advised before signing?
2. Did the contract contain exit clauses or reversion rights?
3. Was the duration of the royalty clause reasonable or perpetual?
4. Was there room for renegotiation as his fame (and bargaining power) grew?

From an entertainment law perspective, any contract that binds an artiste to a disproportionately low share of income over time, especially without clear justification or review is a typical example of a deal that may be legally enforceable, but morally and equitably unconscionable.

4.0: Indicators of Unconscionability in Artiste Contracts

It is important to state that it is not all unfavorable contracts that are legally unconscionable[22]. Courts usually require a high bar before intervening. However, the following are red flags to take note in entertainment agreements with record labels:

1. Unreasonably Long Duration: Artiste should pay attention to record label deals that are unnecessarily long (10-20 years) or runs in perpetuity[23]. An ideal duration of 2 years subject to renewal is reasonable.
2. Unfair Royalty Splits: It is not in doubt that the process of promoting artistes in Nigeria is financially demanding[24]. However, royalty split should be reasonable. An arrangement where the record label makes 80% and the artiste take 20% is not only ridiculous but oppressive. It is worse if such royalty split runs in perpetuity even after the artiste exit.
3. Perpetual Ownership of Intellectual Property: While record labels have the funds, artiste on the hand has the talent to create ideas that will be monetized. Copyright is very important[25]. An artiste should look out for situations whereby record labels may claim to perpetual ownership of their creative work and ideas. Brymo[26] had issues with his former record label. His label, Chocolate City alleged that Brymo had breached the agreement between them and subsequently got an injunction to claim every of Brymo’s recordings[27]. The express mention of a thing is to the exclusion of others. Intellectual property right clause should be in included expressly.  Any deals that prevent an Artiste from claiming their intellectual property even after exit is a red flag.
4. No Room for Renegotiation: Any agreement that takes away the bargaining power and negotiation ability of an artiste is a red flag. Any rigid contract that does not allow terms to be renegotiated as artiste grow and evolve should be seen as a red flag. It was reported that Wizkid fell out with E.M.E and started his own record label[28], Star Boy Entertainment because of the share he was given on his contract. Wikid earns less than 30% of his earnings. He requested for a review but the outcome was not favorable to him. This could have been avoided if there is a clause that allows for renegotiation
5. Lack of Independent Legal Advice: Although most record labels now give signee the opportunity to bring legal representatives[29], some labels still do not give artists right to legal representation. Any label that prevents artiste from seeking independent legal advice creates a fertile ground for exploitation.
6. Unclear or onerous exit clauses: Any contract deal that makes the process of exit very difficult or requiring payment of excessive penalties to leave a label or reclaim their intellectual property rights should be seen as red flag[30].
7. Lack of transparency in royalty accounting or distribution should also be seen as a red flag. It was alleged that while wizkid was earning less than 25% of his earnings the rest was shared between the owners of EME without any clear arrangement of the division[31].
8. Non-compete clauses that also prevent artistes from working independently is a red flag. Runtown[32] label once accused him of breached of contract because he signed up for and attending events behind the label. After long legal battle, Runtown was able to get a court order that gives him the opportunity to work independently and distribute his music[33]. Strict non-compete agreement lock artistes into exploitative relationships which at the end of the day leaves them with fame but with little financial reward.

Where these instances stated above exist, and particularly where an artist signs under economic or emotional pressure without full understanding, courts may be persuaded to consider the contract unconscionable especially if enforcement results in severe injustice. Artiste like Mohbad while alive made different videos where he alleged that his record label physically assaulted him[34]. He also mentioned that his record label should be held responsible if anything dangerous happens to him. Although the label denied the allegations and court later freed the label of allegations. It was gathered that Mohmad was indeed victimized since he left the label.

5.0: What is fate of Record label?

The position of the law is clear that that parties are bound by the agreements they voluntarily enter[35]. The courts generally avoid rewriting contracts, especially where there is no element of fraud, threat, coercion, or misrepresentation[36]. However, equity exists to prevent oppression and to ensure that contracts are not instruments of abuse.

In entertainment law, maintaining a balance is delicate. The entertainment industry thrives on risk and investment[37], but record label must not exploit artistes because of the financial risk[38]. Record labels are advised to ensure a balance and know that a signed contract does not always means a valid and enforceable contract. This is a misconception that needs to be clarified. There are circumstances where court will not enforce a contract if some vitiating element like threat, force, undue influence, misrepresentation, duress, or fraud is present[39].  All the plaintiff needs to do is specifically plead any of this element. A party may challenge the validity of any contract signed out of economic duress and contract may Courts may[40]:

1. Refuse to enforce the contract

• Strike out the oppressive clause
• Enforce the rest of the contract with modifications

 The doctrine of unconscionability[41] should remind labels and artistes that not all legal agreements are enforceable and just and when they are not, the law can intervene to protect the vulnerable party. Labels are urged to mandate new artistes to retain the service of an independent legal practitioner. Artistes who are minors should be signed only with the input of their parents, guardian and legal representatives.

6.0: How Artistes Can Protect Themselves

To avoid the trap of unconscionable contracts, artistes must:

1.  Avoid verbal agreement and ensure that everything is documented
2. Consult an entertainment lawyer before signing any deal no matter how tempting.  A competent entertainment lawyer will help renegotiate oppressive clauses, and ensure contracts are fair and legally sound.
3. Ensure that they understand the long-term consequences of contract terms like master rights, royalties, exclusivity, and duration.
4. Ensure there is opportunity for renegotiation rights which gives room for review as artiste career progresses.
5. Insist on exit clauses that do not impose undue burdens.
6. Insist on fair revenue sharing

7.0: Conclusion and Recommendation

The music industry in Nigeria still appears not to be strictly and properly regulated despite flourishing nature of the industry. It remains a flourishing but highly exploitative industry where record labels take advantage of young artistes. Labels exploit artiste due to these artistes’ desperation for fame. Expectedly, there is a misconception that once a contract has been signed, it automatically means same remains enforceable and cannot be challenged in court. This is a clear misconception. The doctrine of unconscionability exists to protect those with weaker bargaining power from grossly unfair deals, but prevention is better than litigation which is not only stressful but expensive and time consuming.

Thus, Artistes must therefore empower themselves with knowledge, surround themselves with the right legal and financial advisors, and should never sign any document they lack proper understanding of its clauses. Fame is fleeting but bad contracts can haunt an artiste’s entire career.

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[1] Lanase Usman, LL. B, BL, AICMC. He currently works at the Law firm of L.O Fagbemi (SAN) & Co (Rahma Chambers). He can be reached via: Email: lanaseabidemi@gmail.com, 08106646768.

[2] Symbiosis, https://www.britannica.com/science/symbiosis, Accessed 14^th July, 2025.

[3] Olyemisi Falaye https://x.com/yabaleftonline/status/1944132865777598548, Accessed 14^th July, 2025.

[4]Contractual Unconscionability: Identifying and Understanding Its Potential Elements, https://www.columbia.edu/~yc2271/files/teaching/unconsc.pdf, 14^th July, 2025

[5] Ibid.

[6] Ibid.

[7] David Andy, Delimiting The Extent Of The Applicability Of The Equitable Principle Of Unconscionable Bargains In Contracts Of Adhesion, https://www.mondaq.com/nigeria/contracts-and-commercial-law/1568490/delimiting-the-extent-of-the-applicability-of-the-equitable-principle-of-unconscionable-bargains-in-contracts-of-adhesion, Accessed 15^th July, 2025.

[8] Entertainment Law and Ethics in Nigeria, https://lawfuturepartners.com/overview-of-entertainment-law-and-ethics-in-nigeria/, Accessed 15^th July, 2025.

[9] West African Gas Pipeline Company Limited v. Express & Logistics Limited (2024) 18 NWLR 321.

[10] Energy Commission of Nigeria v. PSC Ins Ltd. & Ors (2025) 2 NWLR (Pt.1975) 67.

[11] Ibid.

[12] Ibid.

[13] Alec Lobb (Garages) Ltd. v Total Oil (GB) Ltd., https://www.casemine.com/judgement/uk/5a8ff87a60d03e7f57ec1197, Accesed 15^th July, 2025.

[14] David Andy, Delimiting The Extent Of The Applicability Of The Equitable Principle Of Unconscionable Bargains In Contracts Of Adhesion, https://www.mondaq.com/nigeria/contracts-and-commercial-law/1568490/delimiting-the-extent-of-the-applicability-of-the-equitable-principle-of-unconscionable-bargains-in-contracts-of-adhesion, Accessed 15^th July, 2025.

[15] Shriya Mehta,  Unpacking the Doctrine of Unconscionable Contracts: Protecting Vulnerable Parties in Commercial Transactions,https://www.linkedin.com/pulse/unpacking-doctrine-unconscionable-contracts-protecting-shriya-mehta/, Accessed 15^th July, 2025.

[16] Lloyds Bank Ltd v Bundy [1975] QB 326  https://www.lawteacher.net/cases/lloyds-bank-v-bundy.php, Accessed 15^th July, 2025.

[17] Williams v. Walker-Thomas Furniture Co.,  https://www.casebriefs.com/blog/law/contracts/contracts-keyed-to-knapp/avoiding-enforcement-incapacity-bargaining-misconduct-unconscionability-and-public-policy/williams-v-walker-thomas-furniture-co-2/, Accessed 16^th July, 2025.

[18] Ibid.

[19] Campbell Soup Co. v. Wentz 172 F.2d 80 (1948)

[20] Some Popular Artistes, Record Labels’ Rift in Nigeria Music Industry, https://www.thisdaylive.com/2025/01/11/some-popular-artistes-record-labels-rift-in-nigeria-music-industry/, Accessed 15^th July, 2025.

[21] Ibid.

[22] How to know unconscionable contracts,  https://www.lqplaw.com/blog/2023/01/how-do-i-know-if-a-contract-term-is-unconscionable/, Accessed 16^th July, 2025.

[23] Ibid.

[24] Ibid.

[25] Fatoba, Kehinde, Intellectual Property Rights – An Overview of Nigerian Legal Framework (December 10, 2019). Available at SSRN: https://ssrn.com/abstract=3501898 or http://dx.doi.org/10.2139/ssrn.3501898, Accessed 16^th July, 2025.

[26] Some popular artistes record labels rift in Nigeria, https://www.thisdaylive.com/2025/01/11/some-popular-artistes-record-labels-rift-in-nigeria-music-industry/, Accessed 16^th July, 2025.

[27] Ibid.

[28] Ibid.

[29] Some popular artistes record labels rift in Nigeria, https://www.thisdaylive.com/2025/01/11/some-popular-artistes-record-labels-rift-in-nigeria-music-industry/, Accessed 16^th July, 2025.

[30] Ibid.

[31]Ibid.

[32] Ibid.

[33] Ibid.

[34] Some popular artistes record labels rift in Nigeria, https://www.thisdaylive.com/2025/01/11/some-popular-artistes-record-labels-rift-in-nigeria-music-industry/, Accessed 16^th July, 2025.

[35] Energy Commission of Nigeria v. PSC Ins Ltd. & Ors (2025) 2 NWLR (Pt.1975) 67.

[36] Ibid.

[37] How investors can manage investment risks in the Nigerian entertainment sector, https://heirsinsurancegroup.com/how-investors-can-manage-investment-risks-in-the-nigerian-entertainment-sector/, Accessed 16^th July, 2025

[38] Ibid.

[39] Duru, Onyekachi, Vitiating Elements of Contract as a Source of Contractual Validity (October 4, 2012). Available at SSRN: https://ssrn.com/abstract=2156749 or http://dx.doi.org/10.2139/ssrn.2156749, Accessed 16^th July, 2025.

[40] Ibid.

[41] David Andy, Delimiting The Extent Of The Applicability Of The Equitable Principle Of Unconscionable Bargains In Contracts Of Adhesion, https://www.mondaq.com/nigeria/contracts-and-commercial-law/1568490/delimiting-the-extent-of-the-applicability-of-the-equitable-principle-of-unconscionable-bargains-in-contracts-of-adhesion, Accessed 15^th July, 2025.