Writing for the Green Light

by Scott Kirkpatrick

  7. Warranties. Sometimes called “Warranties & Representations” this section is another standard in any Agreement. But unlike a Warranty offered to you as an up-sell at an electronics store, this one has a little more clout for both sides.

  (a) First, the Company wants to make the Writer promise that she has the right to enter into this Agreement (that she’s not under an exclusive contract with another company, that she is who she says she is and that she’s not misrepresenting herself to the Company).

  (b) Second, the Company wants Jessica to promise that all the work she’ll be creating and submitting is original work (and not plagiarized or stolen from another source). That way, if the Company were to ever be sued by another writer or entity for plagiarism, the Company could pass along the damages to Jessica for submitting non-original work. Don’t panic on this point, it sounds scary, but theft of literary material is actually quite rare in Hollywood and it’s very difficult to steal and/or even prove work has legitimately been stolen.

  (c) Third, the Company Warrants and Represents similar things, that it has the right to offer this job to Jessica and that it’s in good standing professionally and financially to fulfill its promises.

  8. Indemnity. Another standard. In short, this Agreement is only between the Company and the Writer. In a legal dispute, all of the Companies’ employees, investors, partners, etc. would not be personally affected. Same for Jessica, this Agreement only extends to her and cannot be used against partners, spouses, parents, etc. Also, this will go into other protections—let’s say the finished film gets sued by an organization, or a piece of music in the film wasn’t cleared and a record label is suing the production company… . None of this affects Jessica; it’s not her problem. This stuff seems scary, but it’s to your benefit too. Just follow the rules listed herein and you’re good to go.

  9. Remedies. How both sides make a note of issues/conflicts and a procedure of how both parties can work through them. Again, follow the terms and you’re fine.

  10. Assignment. If Jessica Screenwriter decides to quit, is terminated, or for any other reason, the Company may “assign” this exact agreement (and Jessica’s project) to another Writer. On the other hand, Jessica CANNOT assign this agreement to another company or another writer.

  11. Conflicts. This section defines what a conflict is in a legal sense. It also outlines how a conflict would be resolved. Generally, it would go into “arbitration” (a third party to hear both sides and make a judgment). Realistically, if Jessica weren’t performing up to speed, the company would simply terminate. If Jessica is making a big enough fuss about something to go into Arbitration, she will probably never get another screenwriting job. In a deal like this, there’s very little to complain about from either side. Company wants a script and Jessica says she can provide it. If Jessica decides she doesn’t like writing the script, the Parties go separate directions. Jessica doesn’t own the work anyway, she simply owns the talent that can give the Company what it wants in a short period of time.

  12. Confidentiality, Publicity. The terms of this Agreement would need to remain confidential. Jessica shouldn’t talk about how the Company works or what the real budgets of the movie she’s writing for are, for example. That might be in a separate “Confidentiality Clause” or it might be defined here.

  Another point here is the Publicity. This states that if Jessica receives Screenwriting credit in the main titles of the film, then her name will also appear on the billing block (that block of names on a movie poster for Actors and Crew), and if Jessica were to ever become one of those rare household name Screenwriters (like Kauffman or Towne), then the Company could use Jessica’s name to promote their movie in the future.

  13. Use of Services or Products. Your film school professors might hold great screenwriters (and their scripts) on pedestals, but the law looks at a script as a “Product” and the screenwriter as a “Service” provider. This clause states the Writer gets paid only when the Service Jessica is providing results in a finished Product (each of the steps listed previously like Outline, First Draft, etc.).

  14. Non-Union Production. Here the Writer (as initialed below and signed for on the whole) acknowledges that she is Agreeing to write as a non-union writer on a non-union film. If Jessica is actually a member of the WGA, she is here acknowledging that she’s breaking the rules of her organization. This protects the Company. Also, Jessica cannot come back later and try to use the film to springboard herself into a union with back pay on previous projects since this film is non-union.

  15. Attorney. Jessica has the right to show this Agreement to an attorney. She has a period of X days (let’s assume five days) to send this Agreement to a lawyer and get a legal point of view on elements she doesn’t fully understand. She is allowed to make minor changes (that the Company may or may not accept) based upon her own, or her lawyer’s, wishes. If Jessica hires a lawyer, she can add her legal representative’s address to the front below where her agent’s name and contact information would be written.

  16. Governing Law and Jurisdiction. Yes, they even get this detailed, so that in the event of a dispute, you know the exact State, County, and City with which the laws will be reviewed. Ninety-nine times out of hundred, in the movie business it will read: “in accordance with the internal laws of the State of California in the City of Los Angeles.” But it can be anywhere.

  17. Miscellaneous. Yep, everything else they can squeeze in. Let’s highlight a few simple terms, but go ahead and assume they’ve thought of every contingency here:

  (a) Entire Agreement—Just because one sentence on page three could mean one thing, but another sentence of page four means the opposite, an Arbitrator or Lawyer should only be reading both in context within the “entire Agreement” or how they related to the whole Agreement.

  (b) Definitions of what “minor tweaks or polishes” mean in relation to the act of payable service “polish” or “rewrite.”

  (c) Definitions of what submitting a “draft” are. How these elements are to be submitted, and to whom, what format everything should be in, etc.

  (d) Payment obligations (this is where it states the Company must pay within thirty days after a step is considered complete).

  (e) More details on non-union projects.

  (f) More details on the Writer’s non-ownership of the script but full right to accurate credit.

  (g) Time constraints, etc.

  (h) Blah, blah, blah, ongoing details that have very little to do with writing a movie.

  And then both parties again sign… .

  AGREED AND ACCEPTED:HIRING PRODUCTION COMPANY, LLC

  ______________________________By: ________________________

  Name: JESSICA SCREENWRITERIts:

  SSN: 123-45-6789

  Certificate of Authorship

  This is very similar to a release form that an Actor must sign before he or she appears on camera. The Certificate of Authorship is essentially a statement saying that all words, ideas, characters, scenes, sequences are unique and original, coming only from the imagination of the Writer, and that the Writer is providing the Company with a script that cannot be seen as anything other than original. Or, that in the event another Screenplay were to surface from a third party that was strikingly similar to the script our Writer is turning in, it would be a complete coincidence and that the Writer would be able to prove drafts, progression, and notes detailing the personal origin of the script.

  If there would be any conflict, the Writer agrees to work with the Company to clear the originality of the work he or she has submitted.

  Face it, there’s only so many scripts/stories out there. Every writer has worked hard to produce a spec piece of work, only to find out something very similar is in the works or is in production. If you turn in a script, chances are there are dozens very similar to yours. It doesn’t mean someone stole your work or that someone will think your work is stolen. Truth be told, the vast majority of Hollywood execs are legit and wan
t to do the right thing. And the vast majority of original scripts—even if very similar to others—are in fact original and only coincidentally have resemblance to others already in the marketplace. All this ongoing legal speak is because of the one or two times where someone has actually sold a script that was knowingly ripped off. Don’t ever worry about this stuff. Just do good work, turn in the work you create, and you will be fine!

  Sometimes, in these statements, you might come across one of the most confusing terms in contracts: “Droit Moral.” This phrase refers to the moral rights of you as an individual. With regards to a screenplay, since you are a person and you have “created” this script, you somehow own a piece of it because it wouldn’t exist in quite the same manner if your fingers never graced the keyboard. The Certificate of Authorship further considers the Company the owner of the material and that you are being paid for your services. Don’t put up a stink about this. Take the money and move onto the next script so you can build a career. If you want to hold onto your script rights, then sit in your apartment for the rest of your life writing on spec for readers who will never read your work.

  The Undersigned hereby agrees and executes these Terms:

  _________________________________

  Jessica Screenwriter

  Exhibit 1

  Net Profits Definitions

  Look, I’ll keep this simple. The chances a writer makes a penny on royalties for non-union low-budget indie productions is slim to nil.

  First, this Agreement is based upon a production that doesn’t yet exist.

  Second, the Writer is in last place to receive any royalties that would trickle down anyway.

  Third, your agreement will only ever say “net profits.” If it says net, you probably will never see anything. Why? Because “net” means after other costs and payouts have taken place. Sure, money will come in. But then the Company must make other payments (like its full-time staff, costs associated with selling the movies, etc.). Real costs, not invented ones. They also have to pay the accounting staff to keep track of all these payments and payouts, plus there are the costs associated with paying taxes and printing/shipping checks out. Long story short, there’s thousands of costs and deductions to be made on each dollar the Company earns from the film, so unless it turns into a billion-dollar franchise, you’ll most likely never see a penny… . And even if it does become a billion-dollar franchise, you don’t own it anyway, the Company does.

  Instead, I’m going to list common phrases that are used against the gross profits of the movie before any net payouts take place. You should view this as a fun fantasy and accept that the crux of this agreement is a $25,000 flat payout (which is what it really is). Don’t spend time arguing percentages like other novices. Production companies will go through the motions with you, but they know it’s wasting time.

  “Contingent Amounts”—Can mean any cost the Company decides relates to the movie.

  “Material Costs”—Can mean any “physical material” cost (shipping, DVDs, postage stamps, etc.).

  “Sub-distribution Costs”—Cost of having other companies sell certain rights.

  “Collected Taxes”—Taxes collected against earnings of the film

  “Distribution Expenses”—Means, without limitation, the cost of duplication, advertising, phone call expenses, foreign language dubbing costs, collection costs, litigation costs—the list is endless.

  “Audit Rights”—Sure, you can audit… . But you pay for that, and your auditor won’t find anything that the Company doesn’t have the right to hold.

  Be a professional, fight for the flat fee and don’t make a big fuss over percentage points. Deliver what the Company wants and move on!

  Appendix III

  The Non-Union Option / Purchase Agreement

  If a Production Company likes your script as is, they have two ways to acquire its rights: They can either “Option” your script (or “borrow” its rights for a limited window of time in exchange for a small fee) or they can outright “Purchase” your script (meaning you’ll be handing away all rights into perpetuity in exchange for a larger bulk payout or payment offering).

  Production companies and producers like to keep their hands inside as many cookie jars as possible (and by optioning instead of purchasing, they spend less money yet have access to more scripts).

  If you are ever presented with an offer of Option on any of your scripts, push to see if they would just outright purchase it from you… . How much should you ask them for? If they’re open to the idea, let them make the offer—your target should be to get them to approximately two to three times the “Option Fee” or “Initial Option” price they offered.

  Although the total figure you’d receive would much smaller than if the script were to be purchased after a successful option cycle, the truth is that most options never progress to a green light. On rare occasions, producers might do the math and see the purchase of your script as a worthy investment (which means you can simply cash your check and move on to the next project). However, most companies would prefer keeping the deal on an Option/Purchase basis only—and that’s still a fantastic spot to find yourself in. If you’ve tried pushing the idea of a purchase and they’re still leaning toward an option, don’t force the issue… . Just move forward with what’s on the table and play ball.

  To give you a better sense of how an Option/Purchase Agreement might work in the real world, we’re going to assume the following scenario:

  A young novice screenwriter, named Jessica Screenwriter, has successfully pitched her latest screenplay SELLABLE FEATURE-LENGTH SCRIPT to a new Production Company, called Purchasing Production Company, LLC. Her spec script was quickly vetted by the readers and came highly recommended to the production team, who’ve decided to move forward in acquiring the script’s rights.

  The head of development reached out to Jessica by email, asking if she would be interested in optioning the rights to SELLABLE FEATURE-LENGTH SCRIPT to Purchasing Production Company, LLC for a period of 1 year for $1,500 (a very reasonable offer). Jessica replies by asking if there would be any opportunity for a purchase of her script rather than an option. The head of development explains that Purchasing Production Company likes her script very much, but that they’re not in a position to move forward with a purchase; however, they’d be open to sending over an Option/Purchase Agreement to secure the rights in the short term (with the opportunity for a purchase at a later time).

  Being a smart young woman with a strong career ahead of her, Jessica decides to move forward with this fantastic opportunity knowing that an option for $1,500 (even if it never progresses toward a green light) is better than no option for zero dollars.

  What follows is a sample of how Jessica’s contract might appear:

  Short Form Non-Union Option/Purchase Agreement

  DATE: As of ___________________, 20___

  PURCHASER: Purchasing Production Company, LLC

  123 Sunset Blvd., Suite 456

  Hollywood, CA 90028

  Tel. (323) 555-5555

  Fax (323) 555-5555

  Email: legal@production.com

  OWNER: Jessica Screenwriter

  789 Novice Street, Apt. 3D

  Los Angeles, CA 90028

  Tel. (310) 555-5555

  Email: Jessica@screenwriter.com

  (If Jessica Screenwriter has an agent, Jessica’s address will still remain as listed above; her agent’s company and contact information would be written as a second billing, meaning exactly where you’re reading this text block.)

  This confirms the agreement (hereafter, “Agreement”) by and between PURCHASING PRODUCTION COMPANY, LLC (referred herein as the “Purchaser,” which shall also include any possible entity, or assumed entity, that the Purchaser can in any way, shape, or form, mildly prove is “related” to itself—meaning once you sign this, Purchasing Production Company, LLC holds all the cards), and JESSICA SCREENWRITER (referred to hereinafter as the “Owner,” but shall only ref
er to her and no successors, heirs, or representatives), with respect to that certain feature-length Screenplay, which the Owner solely has created, currently entitled “SELLABLE FEATURE-LENGTH SCRIPT” (referred to hereinafter as “the Property”).

  1.“Non-Union Agreement”: At the onset of your career, the non-union indie world will be your most likely entry point to early screenwriting success—meaning the production companies you will be dealing with will not be affiliated with the Writers Guild of America and, therefore, will not be bound by their rules or operating procedures. In addition to the clear “Non-Union” title heading of this contract, there will usually be a clause (just like this one) clearly explaining that this is a Non-Union Agreement… . But this is not here to freak Jessica out or cheat her out of anything; it’s actually here to protect the Purchaser. Once a writer joins the WGA, they cannot work on any non-union production (even if they use a pseudonym). As a result, non-WGA-signatory companies will use very clear language announcing the project is non-union to avoid any confusion should a claim about misrepresenting themselves ever be made against them in the future.

  2. “Option”: In consideration hereof (and a bunch of other legal text), if this Agreement moves forward as an Option Agreement rather than a Purchase (or Buyout), then the Purchaser shall pay the Owner the sum of One Thousand Five Hundred United States dollars (US$1,500) upon executed signature of this Agreement. Upon receipt of said monies (meaning once Jessica cashes her check), the Purchaser shall have the right to Option said Property (attempt to sell Jessica’s script) using its best business judgment during an Initial Term (“Initial Term”) of twelve (12) months.

  (The amount of money for the Initial Term of an Option will always be a relatively small amount; but even one (1) dollar is enough to legally obtain the rights and legally shop Jessica’s script around—and yes, you might actually receive a request for a $1 Option/Purchase Agreement at some point in your career. The general rule of thumb is that the Option Price is about 2.5 to 3 percent of the anticipated budget of the title… . But the inherit problem here is that since so many things can change in the script before it’s ever officially green-lit, an estimate on budget is nearly impossible. In real life, you’ll actually be looking at a very small amount of cash. My advice: any money is good money in the world of indie non-union deal making.)