(A NATAS speaking engagement personified)
By Andrew J. Contiguglia, Attorney at law
Put your contracts in writing!
Think of a situation where you go to someone’s office and you sit down and pitch a deal. Or you show up at lunch and you are talking and you say, “That seems like a great idea! Why don’t we go ahead and do that.” Or you might meet them in a conference room and try to put something together under more formal circumstances. One thing that I do after engaging in these types of conversations, whether it is dealing with someone on the telephone or sitting down with them, is them a deal memo, recapping the conversation. A deal memo says that, pursuant to the conversation earlier this afternoon, it is my understanding that we are going to do the following…. I usually conclude my deal memos with, “If this is not your understanding, let me know immediately.” This way, if they don’t get around to doing what they said they would, if it ever comes up in court down the line, you can say we met for lunch, we discussed these deal points and immediately that afternoon, I typed a letter, sent it to this person, and told him to let me know if he didn’t agree. And that person will be sitting on the stand saying yes, I did get that letter, and no, I didn’t tell them that I didn’t agree with them. There are number of ways that you can go about doing this. You can have a secretary perform these tasks for you or you can hire an attorney to do it for you. Or, just like trying to lose weight, you can change your habits. You have to learn to do these things. You have to take your industry seriously, not only from a creative standpoint, but also from a business standpoint. Because once you become creative, you have to become businessmen. If you do not do these things, you will continue to run into problems.
Another way to prove your deal exists is to come up with a boilerplate agreement. Boilerplate agreements are standard contracts that state you are going to develop a film working with particular people. Think of these agreements as a “fill in the box” type of agreement; they are very basic and not catered to any specific situation. You both sign the boilerplate agreement and you are done. If you are happy with the agreement, toss it into your file and move onto the work. If the need ever arises, you have a written agreement with both signatures.
There are a few reasons, however, that I am not a huge fan of boilerplate agreements. I do think they serve a particular purpose in some instances, but as I discussed earlier, the entertainment business is about relationships. You can’t build a good relationship with a generic agreement. What’s good about boilerplate agreements is that they are quick, but they can create a fissure between people because they don’t nurture any significant business relationships. You don’t sit down. You don’t negotiate. You don’t talk. You don’t create an atmosphere of wanting to do business. Part of being creative is building that type of relationship. You have to find a comfortable medium between being “all businesses” and being creative.
If you have a contract that everyone involved is happy with, it is less likely that you will have problems with it down the line. If everybody is happy, there is no reason to sue anyone. Lawsuits usually happen because one of the parties is unhappy. They may be unhappy because they feel like they were taken advantage of in a talent agreement, distribution agreement or editing agreement. By putting everything in writing, you avoid those pitfalls and you build the relationship. You go through the negotiation process. You finetune the aspects of your contract in order to help build and facilitate the relationship with everybody.
The bottom line is that it is important that you are very detailed in the type of business work that you do. As I mentioned, you can do the deal memo, which is just a letter or an acknowledgement to the other person a skeleton of the type of agreement you are going to put together. The deal memo also makes it clear that you are going to enter into another agreement down the line that will fill in all of the little details. The major points when people are going to get paid, the timeframe of the project and all of the other aspects will be done at a later date.
The first deal memo is essentially the first contract. Then you will have the second contract later on which has more detail. But this first contract is still a contract it still binds the parties. It still has promises in there. It has mutual understanding and inducement in it. Writing is just a way of proving what the deal is.
Sometimes you can have lunches and meetings with people, and follow it up with a letter afterwards. Then the ball is in their court. You have just protected yourself. Forget about them. If you are going to get into a dispute about anything, better you be protected. Sometimes, when you are dealing with big players, they can hold their thumb over you and say, “If you don’t like it, get out the door because there are plenty of other people in line wanting to do business with us.” Being a smaller independent type of producer or editor puts you in a difficult position. But that doesn’t mean you don’t have any rights, and it doesn’t mean you don’t have any negotiating power. And it is important to at least explore that and not take at face value these boilerplate agreements that big corporations throw at you. I think that in every deal you enter into, there is always room for negotiation.
I think people are under the impression that they don’t have the personal power to disagree and say, “I don’t like this part,” but in actuality they do have that power.
Forget the handshakes. Forget the pats on the back. You can have an oral contract, but the problem you will run into is proof. There are some contracts that must be in writing. Those contracts are contracts for real estate, and that includes leases. For example, office space or studio space to be part of your production. Other contracts that must be in writing that could be applicable to the entertainment field are contracts that cannot under any circumstances be performed in less than one year. So, if you contract with somebody and it is a twoyear agreement, you know that a twoyear agreement cannot be performed in less than one year because it is two years in length. Sale of goods over $500.00 contracts must be in writing. The reason these, and other contracts cannot be oral is because of the significance in the subject matter and the duration of the deal. Without a writing all you will have is your word against the other party’s word. And how do you go about proving what somebody else said? How do you go about proving what the deal is? Without a writing, proof problems will arise.
(C) Andrew J. Contiguglia, 2006, All Rights Reserved