FAQs

The answers to the frequently asked questions below have been grouped in such a way that it should be easy to find both the question and the answer you are looking for.

The advice contained in these pages is for general guidance only. On all legal matters you are advised to take legal advice.

The excerpts from the legal column in ScriptWriter Magazine are written by Sean Egan of Bates, Wells & Braithwaite:

A BASIC FILM AGREEMENT

This is a chapter from Julian Friedmann’s book:
How to Make Money Scriptwriting

The importance of legal awareness

Most areas of the law require specialist advice. But writers should be aware of aspects of law that particularly affect them. Certain decisions about what to write or how to write it may be possible only with some understanding of the law. How do you write about potentially litigious matters without infringing anyone's rights ? How do you avoid libelling anyone if you don't understand something about the law? And does your contract cover you on these points?

A detailed catalogue of all the possible clauses in the most common contracts involving writers and producers working with writers, would fill a book longer than this one. Legal or contractual negotiating advice that is both basic and brief is likely to be misleading. The caveat therefore is that these chapters are for guidance only and are necessarily general. Before acting on the information here you must be aware that there are risks in not seeking professional advice over legal matters. I am only an agent, not a lawyer.

Should there be a potential infringement of copyright either by or against you, or should there be a potential libel action either by or against you, you should get professional help sooner rather than later. Not only are these complex areas of the law, but they have potentially severe penalties. Having a good lawyer can be a valuable insurance policy. If you can't afford a lawyer, find out from the Citizens Advice Bureau what your legal rights are. If you are a member of PACT or the New Producers' Alliance, you can book a free session with a lawyer. The Writers' Guild, the Society of Authors and the Authors' Licensing & Collecting Society can also provide legal advice.

Negotiating realism

When you sell something you have written, or when you are commissioned to write a treatment or script, you will usually be asked to sign an agreement. The terms of this agreement should always be negotiated to improve on whatever was first offered. In other words, don't just accept what you are offered. Always try to improve the proposed deal. Producers or broadcasters generally make offers close to what they are prepared to pay, but rarely do they make their best offer at first. Negotiating can make a significant difference to the initial offer. But counter-proposals must be realistic to be effective.

Without any knowledge of the terms and conditions in typical writers' agreements, or a basic understanding of the agreements or contracts that determine the obligations and remuneration, writers cannot know whether it is worth their while committing the necessary time to a project.

In addition to this, many writers fear that they are in danger of being ripped off. This is often because they don't understand their contracts. Some writers have been ripped off, but most producers are honest and honourable. To prevent suspicions creeping in to spoil the relationship, it is important that both sides are open with each other about deal points and contractual matters. It pays to make sure that all the details are clearly understood by both parties; this is one of the most time-consuming but useful aspects of an agent's work.

In this chapter we will look in general at the commissioning process and at options, by going through some of the main clauses found in 'standard' contracts. First we will look at the legal requirements for a contract to exist.

WHAT IS A CONTRACT?

Certain things have to happen for a contract or an agreement to exist. There has to be:

a) an offer, which contains the principal terms of the deal unconditionally and absolutely: ie if you reject one term of it it is not absolute;

b) it must be accepted unconditionally;

c) there must be an intention on the part of the parties to be legally bound by the agreement;

d) there must be some consideration; in other words, there must be a payment of some sort, not necessarily in cash, which must relate to the present or the future not to the past.

The basic agreement

Two of the most common kinds of basic transactions for writers working in film and television are determined by whether the writer is being commissioned, ie, hired to write something (sells his or her services), or sells an option to something that he or she has already written. The latter may be an idea, a treatment, a script, short story, novel or whatever. There are, of course, many other types of deal, such as those involving the licencing of books, articles or doing rewrites. But these two transactions are the most common involving script writers:

1) Writers can be commissioned by another party to write a treatment or script. There will be payment for the service of writing. The contract will probably be governed by union agreements, and will usually involve the assignment to the commissioning party of copyright in the products and services of the writer.

2) A writer may have written a spec script (or a novel) which another party wishes to acquire rights in to make and exploit as a film or TV programme. This usually starts with an option to acquire the rights at a later date on pre-agreed terms. (Although this may be a sale of rights or a licence, for convenience I will refer to it in this chapter as the 'assignment'.)

When there is more in development than can be absorbed either by the broadcasters or by producers with development finance looking for feature films (as has been the case in the UK since the early 1990s), producers and broadcasters option less, and attempt to pay less for what they do option. Deals therefore become tighter.

Against this background of difficult market conditions, writers have to negotiate the sale of their services or of their already-written work. In the first category of basic transactions the producer is most likely to commission a treatment before commissioning the script.

The deal is usually in stages, and until the writer has delivered stage one (usually the treatment) and it is accepted, the commission of stage two would not proceed. Some contracts stipulate payment on delivery, others on acceptance of the work delivered. It is preferable for the writer to be paid on delivery, although this is not always possible.

The Writers' Guild/PACT agreement for film script commissions by independent producers has seven stages for delivery/payment:

1) commission of treatment/payment of about 10% of total fee

2) delivery and acceptance of treatment/payment about 10%

3) commission of first draft script/payment about 20%

4) delivery of first draft script/payment about 20%

5) commission of second draft/payment about 10%

6) acceptance of second draft/payment about 10%

7) principal photography payment the remaining 20%

For television there are four equal stage payments (see WG/PACT agreements elsewhere on the WG website).

Variations in negotiations (apart from the payment sums) include whether the second payment is due when the treatment is delivered or only when it is accepted, and whether the fourth and sixth payments are due on delivery or acceptance. I do not have strong objections to payment on acceptance for the treatment, as it is very rare for the first or even second draft of a treatment to get it right. So a couple of rewrites of a treatment without additional payment, as long as the goal-posts are not moved by the producer, may not be unreasonable, especially if the payment on commission is an adequate one.

As long as the brief from the producer has not changed, the writer should be willing to do a certain amount of rewriting without additional pay before acceptance, as long as the producer is providing constructive and prompt feedback. Should the writer be a very experienced one, and should the brief be consistent (ie not have radically new story or character elements introduced by the producer), then limiting the number of rewrites to one or two and a polish is sensible. Should the writer be inexperienced then more protection for the producer is not unreasonable.

What is clearly unreasonable is the established industry practice whereby film treatments attract only 20% of the basic fee. This has a direct and detrimental effect on the development of scripts, as it effectively reduces the amount of time spent on the treatment. Underdeveloped treatments usually lead to inadequate scripts. This practice is a significant contributory factor to the relatively poor level of development in scripts in Britain and the rest of Europe. In television the BBC may pay only 10%; under the WG/PACT agreement for television it is 25%. Neither is satisfactory.

TYPICAL CLAUSES FROM A SCRIPT COMMISSION AGREEMENT

To save you having to read through the sometimes arcane legalese in which most agreements are written, I will list some of the typical clauses in a script commission agreement, together with a brief description and some comments. This is not an exhaustive list, but should provide the basis for more detailed discussion, either with your agent, your lawyer, the staff of writers' associations or with other writers. Try to find ways of improving not only deal points (money, periods of time etc) but also the protection afforded to you in the agreement.

There are of course many types of writers' agreement, including those for the commission of a pilot episode, for the option of a spec script, for the option of a book, for a television movie (as opposed to a feature film), or for the development of a treatment or series 'bible'. This chapter will cover some typical clauses common to these. It will not cover every possible clause.

You can also compare these clauses and the topics in the section of the FAQs called A Brief A-Z of Contracts and Law for Writers with contracts you have or are offered. This has a wide range of topics of a legal and contractual nature that affect writers. For convenience these will be listed in alphabetical order, and many of the terms used in the clauses discussed in this chapter are described elsewhere in the FAQs.

Preamble

There can be clauses at the beginning of a contract that set out the date, the parties to the agreement, and provides the agreed addresses for the parties to which correspondence about the contract must be sent.

Recitals

This clause tells us what the set up is prior to the clauses which make up the agreement. In other words, the Recital is not an operative clause and neither party is bound by the contents of this clause. It usually begins with the word WHERAS, and has phrases such as 'WHERAS the Writer has written...' It ends with the phrase NOW IT IS AGREED, and everything after that phrase is what the parties have agreed and are bound by once they sign the document.

Definitions

Numerous definitions are listed at the beginning of a contract to make sure that it is unambiguous. A number of words and expressions may be defined. 'Writer' is usually the description given to one of the parties. When later used in the contract, the meaning given in the Definitions Clause is the meaning specifically and expressly agreed in the contract. The word in question is always spelled with a capital letter, eg Writer, Producer, Work etc.

Other definitions might be of the Treatment, the First and Second Draft Scripts and the Principal Photography Script, Television Series and Serials, and any other relevant form that the Work can take.

Engagement

This clause states that the producer engages the writer and the writer agrees to render his/her services to the best of his/her ability and skill in writing the Work which is the subject of the contract. The clause can contain details of the delivery schedule for the various drafts of the treatment and script(s).

If the contract is for a series originated by the writer, the writer, as a negotiating tactic, should try to get a guaranteed number of scripts in the series. One formulation of this could be that, subject to the writer's availability, the writer will be guaranteed at least half the scripts in the series (if it not a 13 or 26 part series) on condition that the scripts delivered by the writer are acceptable and that the writer can deliver within the reasonable schedule required by the producer. The longer the series, the fewer the guaranteed scripts.

In other words, if your scripts are not acceptable you get no more to write. Or, if you cannot meet the delivery dates required by the producer, you will not be further commissioned. But if it was your original idea/treatment you could argue in respect of the scripts that you don't write, that you should receive a format fee of at least 10% of what you received for your script or of what the best paid writer receives (whichever is the higher) on all the scripts you do not write. You should also try to get a 'created by' credit on all the episodes you didn't write.

Assignment of Copyright/Grant of Rights

The writer will have to assign or license some or all of the copyright in the work to the producer. This clause can also cover reversion in the event that the producer has not commenced production within an agreed period of time.

It can include details of what specific ancillary rights, like merchandising rights, are included in the grant of rights, and whether the writer has to waive his/her moral rights. (See elsewhere on Moral Rights.)

Reserved Rights

Where a script or treatment is commissioned it is usual for all rights to be assigned or licensed to the commissioning party. If rights are acquired in an existing work it is more common for the rights' owner to be able to withold some of the rights.

In order to permit the making and exploiting of a film, some of the copyright rights need to be assigned or licensed to the producer. But it is not necessary for all the rights making up copyright to be licenced or assigned. Where successful in witholding certain rights, these commonly include publishing, radio and stage rights. There is usually a period of time, called a 'hold-back' (perhaps between three and five years), after the grant of rights before the reserved rights can be exploited by the holder of those rights. Merchandising rights are not usually held back, because their main value stems from the 'screen time' created by the film or television programme(s).

It is important to reserve as much as possible, without jeopardizing the deal as a whole. However, if you do not have an agent or are unable to exploit reserved rights, it may be better to let the producer control them as long as you receive an appropriate share of the revenue. For example, if you reserve the publishing rights, you might be able to get 100% of the royalties if you write the book. If the producer controls the rights, you might get 50_75% if you write the book. But if you do not write the novelization, and another writer is brought in, you might only receive 25% of the royalties, with the rest going to the novelizer (perhaps 50%) and to the producer (25%).

Warranties

The writer will have to provide certain warranties, which can include the following:

that the writer is free to enter into the agreement and shall not enter into any agreement that might conflict with it;

that the material written by the writer is original (this will be modified if the material is based on a novel or is otherwise supplied by the producer);

that the writer has not previously assigned granted or licenced the rights in the material that are the subject of the agreement;

that the material will not infringe anyone else's copyright;

that the material will not defame anyone;

that the material is not obscene.

The writer will have to indemnify the producer against any breach of any of the warranties given by the writer. This will usually mean covering all costs and damages arising out of or resulting from legal actions against the producer arising from a breach of the warranties made by the writer. Should there be claims regarding a breach, which fail to prove that a breach actually took place, then I do not think the writer should have any obligations. For example, the writer should not be liable to pay if a crank chooses to sue and fails to win. If no breach is proven, the producer should cover the costs. If a breach has taken place then, depending on the wording of the indemnity, the writer may be liable under it.

The writer should always try to ensure that there is a reverse warranty, so that if legal action results from information or material provided by the producer to the writer, the producer agrees to indemnify the writer.

Warranties must be taken seriously. Whenever possible, writers should attempt to insert the qualification 'to the best of my knowledge and belief'.

Suspension/Termination

In a commission agreement the writer can usually be fired or the agreement terminated if he or she fails to deliver an acceptable treatment or script, delivers very late, fails to fulfil their obligations because of illness, for example, or fails or refuses to perform or observe services undertaken in the contract. The clause usually deals with what payments the writer is still entitled to after suspension or termination.

It is important for writers to notify producers as soon as they know delivery will be late. This may not stop them from being fired, but it decreases the chances. Writers should also insist on being given the right to do at least one rewrite before termination. In other words, if the first draft delivered is not acceptable, the producer should provide notes detailing what changes they require, and the writer should be given the chance to revise the script accordingly.

Even if it is an original idea or treatment, if a writer fails to deliver an acceptable treatment or script after being given a chance to rewrite, or if the writer is in default of the contract, the producer must have the opportunity of getting another writer. The original writer should still be entitled to certain payments (depending on the details of the agreement).

Assignment to Third Party

This clause allows the producer to transfer or assign their rights to the material written by the writer to a third party (the assignee or licencee). The clause should provide if possible that assignment is only permitted '...provided the Assignee or Licensee enters into an agreement directly with the Writer to observe and perform the Producer's obligations.'

It should be made clear that any assignment will not relieve the producer of his or her obligations to the writer, except perhaps to the extent that the assignee complies with its direct obligations to the writer. It is an important protection to have this 'direct covenant' and producers should have no objection to its inclusion

Compensation/Payment

This describes the payments that the writer will receive 'subject to the performances of the Writer's obligations and warranties'. The payment stages are usually clearly laid down, and these tend to be contingent upon delivery by the writer of the appropriate drafts of the treatment or script. The most frequent complaint from writers is late payment by producers. You can try to insert a clause requiring interest at, say, 2% over base rate on monies paid late. This won't guarantee the payment on time but in my experience it does help speed it up and the interest is a small consolation too. Or put in a clause which states that delivery by the writer of the next stage shall be extended by however long overdue the producer has been in payment. In other words, writing time only starts being counted once appropriate payment has been received for the previous stage.

Non-payment does not necessarily constitute a breach of the agreement. In other words, the contract may not necessarily become cancellable if the writer does not get paid. The usual legal recourse for non-payment is to sue for the money in a court of law. [1]

It is usual commercial practice if you enter into a contract with a film company that they will require your agreement that the rights granted to them under the agreement you are signing cannot be rescinded because of non-payment. The agreement will usually state that if you have any grounds for an action against them then you must sue for damages. The reason this is industry practice and is not worth fighting is because you may be selling the rights to your script or your book for say £10,000, but the film may cost say £10 million.

Financiers are not prepared to risk the underlying rights on which the film is based being removed from them because someone has not been paid every penny that should have been paid. Financiers are generally very concerned that people do get paid but they cannot afford to let there be high risks attendant upon large sums of money due to perhaps some inadvertent failure to pay a very small sum of money. So non-payment is usually specifically agreed not to be a breach of the agreement.

It's important also to distinguish between a licence and an assignment. A licence is a permission (not a property transaction like an assignment) and if there is no payment the writer (or licensor) is entitled to state that non-payment is a fundamental breach, since it demonstrates that the producer does not intend to be bound by the contract and therefore the contract can be terminated.

Because an assignment of copyright is a property transaction (of so-called 'intellectual property'), the general rule, which is frequently spelled out in detail in an assignment contract, is that non-payment (except possible for total failure to pay) will not cause the contract to be revoked or rescinded. So you would probably have to sue for damages, ie for money that is owing.

When you are offered a contract, look at the wording with regard to the question of consideration. If it has the words 'in consideration of £X' that is better than if it says 'in consideration of the purchaser's agreement to pay £X'. The former makes it absolutely clear that you should be paid £X (for whatever was agreed that you would do, assuming that you fulfilled your obligation).

Credits

There should always be a clause which determines what credit the writer will be given on screen. It might state where the credit will appear, how large it will be, and usually also states that if there is an 'inadvertent failure by the Producer to credit the Writer that shall not be deemed a breach of the contract'. This latter point is standard industry practice and is not worth arguing about.

The exact form of the credits is often left until after the film goes into production. If the writer is a member of the Writers' Guild, the clause usually states that the writer '...shall be accorded such credit as he/she is entitled to under the terms of the Screen Credits Agreement made in 1974 between the Writers' Guild and the then BFPA (or as subsequently amended)'.

Disputes Procedure

Credit disputes are usually arbitrated by the Writers' Guild, if the writer is a member. Other disputes can be taken to court or the agreement may provide for an arbitrator.

Expenses/Travel/Subsistence

If the writer is expected to travel more than, say, 30 miles from home or place of work (whichever is agreed in the document) the producer agrees to provide expenses for travel, and should 'overnights' be involved, for accommodation.

If flying abroad some producers agree business class travel and per diems, a small sum to cover incidentals. If the producer is covering all meals then the per diem may be no more than £20 or £30 per day. However, if meals are not included it should be considerably more.

Collecting Societies

The producer should agree that any money payable to the writer from collecting societies [2] whether in the domestic market or from abroad, is for the writer not the producer. Writers should register with the ALCS, to make sure that they receive any monies that can be collected on their behalf.

There is an anomalous situation as to whether agents should receive commission on money collected like this, or from PLR (Public Lending Right: money paid to authors by the government on books borrowed from public libraries). Personally I believe that if the contracts for the scripts or books bringing in this revenue were signed while the writer was represented, then the agent should receive their commission in the usual way, as they would for any subsidiary deal under that contract.

However, the collecting agencies collect on behalf of the authors and prefer to remit directly to them. It has become industry practice for some reason among most agents not to seek commission from these monies, which may explain why agents do not seem to work as closely with the ALCS as I think they should.

Pension Scheme

If the writer is a member of the Writers' Guild pension scheme, and the producer is a member of PACT, then both the producer and the writer can pay small sums of money into the pension scheme on behalf of the writer. It is not obligatory to enter the pension scheme.

Law

There should be a clause towards the end of a contract stating that the agreement 'shall be subject to the laws of England and the exclusive jurisdiction of the English courts' (assuming it is a contract drawn up in England). [3]

Finally...

There are usually also clauses covering a number of other points. Among these are:

permission for the producer to use the approved likenesses, biography and name of the writer;

when commissioned to write something, agreement for the producer to make the writer's services available to third parties;

agreement for the producer to 'adapt change revise delete from add to and or rearrange...the script'. 

Footnotes

1 If the sum is not large the Small Claims Court is a relatively easy solution.

2 See chapter 19 for more details.

3 In the UK, Scotland has certain laws that differ from England and Wales. For the purposes of this book no differentiation is made.

How To Make Money Scriptwriting by Julian Friedmann  is published by Intellect Books 

A BASIC OPTION AGREEMENT

This is a chapter from Julian Friedmann’s book:
How to Make Money Scriptwriting

In the second basic type of deal writers are offered, the producer is likely to want to take an option on what the writer has already written (eg a book or script), entitling the producer to exclusivity for an agreed period of time, during which no one else can acquire the rights in the material for the purpose of making and exploiting a film or programme(s). The option usually states how much the producer pays for the exclusivity to acquire the rights, what rights are being optioned, how long the producer has the option for and how the option can be renewed or extended. Usually, attached to an option agreement is the second part of the contract, called the 'Assignment', which states the purchase price, the grant of rights and all the other details necessary to transfer the rights to the producer so that he or she can make and exploit the film to be based on the rights acquired.

If, before the expiry of the option, the producer 'exercises' the option in the way prescribed in the option agreement, then the rights granted by the Assignment will pass to the ownership of the producer, subject to the producer paying the exercise price. This payment is known in contracts as 'consideration' and some consideration is required for a contract to be legally binding. It is usually but not necessarily money. Make sure the rights don't pass unless you have been paid.

During the option period it must be made clear what the producer is entitled to do in relation to the Work. Raising money in order to be able to make the film is perhaps the most important activity which the producer must have the right to do; actually starting production of the film, however, should not be possible under an option agreement. Only once the option is exercised, can the production begin.

It is worth noting again here the difference between commissioning a Work and optioning a Work, because when a producer commissions a writer, the producer will usually own the Work to be written and all the accompanying rights, such as sequel and remake rights. There will therefore not be anything in the contract about these as all rights in the Work are owned by the commissioning producer. But where the Work existed prior to the producer's offer to acquire an option, some of the ancilliary rights may have already been sold, such as publishing rights, stage or radio rights.

So where there is a commissioning, and the producer requires the Writer to assign the copyright, the producer will usually want the right to make 'films in general', not just one film (as they might acquire in a one-picture licence). But this raises the issue of what payments should be made to the writer if more than one film is made, or if a spin-off television series is made, and so on.

There are therefore commonly provisions for such additional productions as sequels and remakes or television series, in addition to the feature film rights being bought under the agreement in question. For sequel and remakes it is usual for producers to offer 50% of what the Writer received for the first film. For a television series there will usually be a fee per episode (depending on the running time of the episodes). The fees for television spin-offs do not always carry residuals, though you can try to obtain them. All these additional fees or percentages are dealt with in the Assignment at the time that you sell the Work.

The amount paid for the rights to make the first film will be an agreed sum paid on exercise of the option (at which point the rights usually pass to the producer) plus an additional top-up payment on the first day of principal photography. This is usually measured by reference to the size of the budget. In other words a fee of £50,000 may have been agreed or say 2% of the budget, whichever is the higher. So on the first day of principal photography the difference between £50,000 and 2% of the budget will be paid if the latter is greater than £50,000.

The Writer will usually receive what is known as 'profit participation', commonly between 0.5-5% of 100% of the film's profits. Writer's profits should be assessed on the same basis as the financiers' definition. The reason for this is that the Writer won't be able to know how the financiers are defining profits, so having Writer's profits defined by reference to financiers' profits ensures that the Writer does not receive a less-favourable calculation of profits. In the commissioning situation, because the producer is 'at risk' the writer therefore tends to have to sell all rights, but gets top-up or residual payments depending upon the performance of the production(s). When dealing with an existing novel union agreements do not apply (although agents try to mirror them, obtaining for example residuals when selling a novel to a broadcaster), but it usually is possible to reserve some of the rights, negotiate provisions for remakes and sequels, determine who will write the novelisation, and so on.

Residuals are usually seen as a way of topping up a basic fee. With an option the producer buys time because he/she cannot or does not want to pay the purchase price at the beginning of the relationship, or anyway not until they have established that they can raise the money for the production of the film. So the option is often thought of as time for the producer to go out and raise the money.

It is not easy to generalize about what sums of money should be paid for commissions or options, except by reference to the WG minimums (see elsewhere on the WG website for the latest minimum figures). Detailed information on deals can often be acquired by the sharing of experiences between writers.

How To Make Money Scriptwriting by Julian Friedmann  is published by Intellect Books 

© ScriptWriter Magazine 2002