## Facts

- In the 1960s, songwriter Gilbert Cabot entered a master purchase agreement with Jamie Record Co. (Jamie), selling Jamie two master recordings in exchange for a cash advance and promised future royalties.
- Cabot also entered a participation agreement with Jamie Music Publishing Co., doing business as Dandelion Music Co. (Dandelion), under which Dandelion acquired copyright ownership of two musical compositions for licensing and other commercial uses, again in exchange for an advance and future royalties.
- Both agreements required Jamie and Dandelion to provide Cabot with regular accounting statements.
- Broadcast Music, Inc. (BMI) was licensed to collect performance royalties for the works and remit payments to Cabot and Dandelion.
- Cabot alleged Jamie and Dandelion provided required accounting statements only occasionally, including a period from 1972 to 1976 when no statements were provided.
- Cabot further alleged Jamie and Dandelion failed to make all required royalty payments, including a period from 1991 to 1995 when no royalty payments were made.
- Despite the alleged lapses, Cabot received more than $60,000 under the two agreements and received several performance-royalty payments from BMI.
- Cabot sued seeking rescission of the master purchase and participation agreements based on the alleged failures to account and pay royalties.

## Issues

1. Whether intermittent failures to provide royalty accountings and to make all royalty payments under long-running recording and publishing agreements justified rescission of those agreements.

## Decision

- The district court denied Cabot’s request to rescind the master purchase and participation agreements.
- The Third Circuit affirmed the district court’s judgment without a written opinion.  

## Legal Principles

- Rescission is an extraordinary equitable remedy and is not granted for contract breaches that do not go to the essence of the agreement.
- Failures to provide periodic accountings or to make all royalty payments may constitute breaches, but rescission may be denied where the nonbreaching party has received substantial benefits under the contracts.
- When the claimed harm from royalty and accounting breaches can be addressed through monetary relief, rescission may be inappropriate.

## Conclusion

The district court concluded that Jamie’s and Dandelion’s lapses in royalty accounting and payment, in the context of decades-old agreements under which Cabot had received substantial compensation, did not warrant the extreme remedy of rescission; the Third Circuit affirmed without opinion.


Cabot v. Jamie Record Co., 1999 U.S. Dist. LEXIS 5549 (E.D. Pa. 1999), aff’d, 248 F.3d 1129 (3d Cir. 2000)