Entertainment Contracts: Part One–the Basics

People often come to me with contracts they have cut and pasted from samples they have seen in a book or borrowed from a friend. Later they’ve gotten into trouble because the contract does not reflect what the parties intended.

When people ask me whether they can use form contracts found in books or on the Internet or borrowed from a friend, I say “no.”

Form contracts, especially those in books, are not meant to be used by anyone. They are samples of fictitious ideal transactions which never took place. These samples are meant to show the types of things that go into an agreement, but not necessarily your agreement.

Many of the agreements you get from friends were not written, or even reviewed, by an attorney. Most of them are not written correctly, do not make sense, and do not apply to your situation. They are passed from filmmaker to filmmaker and their errors are perpetuated, or even magnified if someone decides to make a “little” change in the wording.

Contract basics

A contract is an agreement between two or more parties and reflects what the parties agreed to. If it doesn’t reflect what these particular parties want to do, it’s detrimental rather than helpful because it may set conditions the parties never intend to observe.

Among the essentials in an agreement, whether it’s oral or written, are:

• the names of the parties to the agreement;
• what each of the parties will do;
• when they will do it; and
• the consideration.

Consideration means what each party will give to the other. It can be money, services, or goods. Without consideration, you have a gift, not a contract.

In written agreements, you must be sure to have the exact name of the parties. Non-attorneys are often vague or incorrect in how they name parties. Sometimes they will put in the name of a person when the party to the contract should actually be a corporation. Sometimes the name of the person or company will be spelled incorrectly. Be aware that XY Corporation is not the same as XYZ Corporation, and XYZ LLC is not the same as XYZ Corporation.

If the contract is a contract for services, be sure to specify exactly what services are being rendered. Being vague here can lead to misunderstandings and disputes. Likewise, it is important to specify the timing of when services are to be rendered and where.

It continues to surprise me how often I see contracts that are missing one or more of the above basic elements.

The Importance of a Written Contract

A properly written contract can save your deal, save you money, describe how you will be paid, make sure the rights are properly allocated, describe what happens when disputes arise, provide a back-up plan if things do not work out as intended, and much more.

In my book and video on Contracts, volume 4 of the What Every Filmmaker Needs to Know About the Law series, I go into great detail about the components of entertainment agreements. That DVD is a great resource for understanding entertainment transactions and I recommend you take advantage of it. If you don’t already own the set (which is available at a discount to my readers), go to the What Every Filmmaker Needs to Know About the Law website to purchase it today.

If you’d like my help with your production or your agreements, click the “Production Counsel Website” link above.

© Keith E. Cooper. All rights reserved. You may freely link to this post, but please do not copy (in whole or in part) without permission of the copyright owner.

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