If you’re a screenwriter who gets handed a contract, but doesn’t have a lawyer, here are some things to keep in mind so you don’t get completely screwed over.
- Your first contract will probably be an option/purchase contract. That means the producer will have an exclusive period (“the option period) to purchase your script. My first rule is: The less money they pay you for the option, the shorter the option period. The producer will tell you that the typical option period is 12-18 months. Yeah, well the typical producer pays for the option (WGA minimum for an option is 10% of the purchase price). As this producer is paying $0 or close to it, limit the option period to 3-6 months. If the producer doesn’t like it, tell them they can always pay you for a longer time, but you don’t want to tie your script up for 18 months with a producer who is no longer actively trying to set up your script.
- How much should the purchase price be? Well, that depends strongly on what the budget is. A good rule of thumb is that the script fee is between 2.5-5% of the total budget. As the budget goes up, your % goes down. But if someone is spending $5 million to turn your script into a movie, they can easily pay you $150,000 in the budget.
- Don’t agree to a work-for-hire clause if it’s a spec script. You can’t ever terminate the transfer if the contract says it was a work-for-hire.
- Register your script with the Copyright Office (not the WGA!) before you send it out. This is the only way to protect your script. The WGA script registry is just a waste of your money (as I’ve explained in earlier posts).
- If they are paying you a small amount for your script, don’t agree to give them sequel/remake rights or other rights (e.g., book rights, live stage rights). If they want those rights, make them pay for them separately.
- Include a clause that says that if they buy the script but don’t make a movie within a set period of time (3-5 years), you can get the rights back by paying them back the money they paid you. You never know when someone else might want your script.
- Make sure that the contract contains an attorney’s fees provision. If they don’t pay you, and you have to sue, you need that expressly stated in the contract in order to get your attorney’s fees (USA only).
- Try to get some net profits in the deal. Make sure that the agreement says your net profit definition is on a “most favored nations” basis with other talent (actors, director). That will give you some protection.
- Make sure that the contract says that you will get a screenplay credit. Since this isn’t a WGA deal, there is no WGA arbitration to turn to if there is a credit dispute. Just insist on the credit since you are the original writer.
- If you can possibly do so, have a lawyer look at the agreement, but if not, don’t be afraid to walk away. Saying “no” is the only power you have when negotiating a deal, so don’t be afraid to use it.
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