6 Legal Agreements Every Screenwriter Must Know

by Ken Aguado (@kaguado)

Whenever I speak to aspiring screenwriters, I always go out of my way to emphasize the importance of being legally prepared. Not surprisingly, most screenwriters come to their interest in writing from a place of artistic passion, and so things like legal matters are not as high on their list of priorities.

As a result, many newer screenwriters start their careers with no legal agreements of any kind. Sometimes the screenwriters involved are friends with the people they work with and they assume no agreements are needed. Or they assume that they’ll need agreements if they ever sell their work, but not today. To be fair, I’ve seen a few professional screenwriters make this same mistake, and it always blows my mind.

There are three main reasons you should never make a similar mistake:

  1. Screenwriting is a business, and businesses run on contractual agreements.
  2. Such agreements help define the business relationship between screenwriters and the people they work with.
  3. If screenwriters don’t define their business relationships, there may be little or difficult recourse when problems arise. And problems often arise.

Most screenwriters will encounter several kinds of legal agreements in their career, but here are my top six. Of course I know that reading this article is not the same thing as going to law school or hiring an entertainment attorney, but if you work in showbiz, you’re likely to encounter most of these. Do you really want it to be a surprise? When the time comes, I want readers to take active steps to protect their interests.

Note: I am not a lawyer, and the following does not constitute legal advice! If and when you find yourself in a position to negotiate any of the following contracts, please speak to an entertainment attorney.

That said, here are my top six screenwriting legal agreements:

1. Option/Purchase Agreements

An option/purchase agreement is most often used by two parties to sell/acquire the motion picture and television rights to existing screenplays. But this kind of agreement is also used to acquire the motion picture and television rights to things like comic books, novels, theatrical works (plays/musicals), or even film remake rights. I mention this because it’s becoming more and more common for screenwriters to take the initiative and acquire these kinds of pre-existing intellectual properties as the basis of the screenplays they write. If you’ve been to the movies or watched television in the past 10-15 years, the reason is obvious. I do a deep dive into this topic in my book BASED ON, for those who are interested.

But if you’re a screenwriter with an original screenplay (or pilot), and someone wants to produce your work, an option/purchase agreement is probably what you will sign. The general idea of this kind of agreement is that, for an initial lower cost, it allows the acquirer to “control” the rights to your script exclusively for some agreed period of time at a defined cost.

Because such a low percentage of scripts are produced, the advantage for the acquirer is that the option part of the agreement allows them to temporarily control the rights for less money (the “option” price) than it would cost to buy those rights (the “purchase” price). If the acquirer finds the funding/means to get the script made, the purchase half of the agreement lays out the terms for the purchase, and everybody goes home happy.

The advantage to the screenwriter (in addition to a possible option payment), is that someone is out there trying to get their script made, and if that someone fails, the screenwriter gets their rights back and might be able to sell their script to someone else at a later date. Cool.

Of course, there will be many other provisions specified in an option/purchase agreement, including rights related to sequels and remakes, screen credit, bonus payments, and much more.

2. Writer Agreements

A writer agreement is an employment agreement a screenwriter will sign if they are hired to write or rewrite something. From a legal perspective, it is considered a labor agreement. This kind of agreement will specify things such as what services the writer will be performing, the writer’s payment, the payment schedule, screen credit, as well as the timeline for when the services will be performed.

Sometimes a writer agreement will be part of an option/purchase agreement if additional paid rewriting services will be required. A writer agreement will also include a “work made for hire” provision. I only mention this because it’s a fundamental provision that allows the entity hiring you to own the thing they are paying you to write. And you can drop the phrase at cocktail parties to impress your friends.

One note: If you are a member of the WGA, some of the terms in a writer agreement (and to a lesser degree, option/purchase agreements) may be additionally regulated under the terms of the agreement the WGA has with “signatory” companies (such as studios, networks, cable companies, production companies, and actual producers). For example, minimum payment and screen credit are covered by the WGA’s MBA — minimum basic agreement.

3. Collaboration Agreements

A collaboration agreement is used when two or more parties decide to work together to achieve a common goal. For example, to co-write a script. It is a relatively simple agreement that specifies the agreed goals, assorted responsibilities, ownership, and other basic aspects of the relationship between the collaborating parties. If you plan to co-write a script, a collaboration agreement is the first agreement you should sign.

The Writers Guild of America has a good (if slightly basic) sample agreement on their website.

A collaboration agreement is an often-overlooked agreement by screenwriters, which is a shame because it is perhaps the only agreement mentioned in this article a screenwriter might use without requiring the paid services of an entertainment attorney. If you plan to co-write, always sign a collaboration agreement. For many readers, it may be the first agreement you ever sign. Welcome to the big leagues!

4. Representation Agreements

As the name implies, this is an agreement between an agent or manager and their client. The agreement allows the representative to act on behalf of the client in very specific ways and to be compensated accordingly.

If the agreement is with an agent, then the terms of the agreement will also be subject to state laws and union agreements intended to regulate agents and their relationships with their clients.

This is not the case with managers. Managers are mostly unregulated and this allows them to do things like produce their client’s work.

By the way, a representation agreement with a lawyer is usually called an “engagement letter.” Essentially the same thing, but not as romantic as it sounds.

5. Submission Release Forms

Screenwriters with no representation (and even some who are represented) are occasionally asked to sign a submission release before they will be allowed to submit their screenplays for consideration by agents, managers, producers, production companies, and events like workshops or festivals. If the writer signs it, they lose their right to sue if they believe their work was subsequently ripped off by the other party to the agreement — or at least that’s the idea.

Let me summarize my position on submission release forms in general:

  1. Writers who worry about their scripts getting ripped off sometimes “over-value” their work. The vast, vast, vast majority of original screenplays are in no danger of being stolen. (Let the angry posts begin?)
  2. Consider the reputation of the organization or people who are asking you to sign. Do some research. Some are more slippery or fringe than others.
  3. If the only alternative is your script sitting on a shelf or on a hard drive forever, what do you have to lose?

I tend to side with those who say never sign, but I also understand how hard it is for new writers to get their work into the Hollywood system.

6. Shopping Agreements

In the last twenty years, the business of selling scripts has become much tougher. This has led to the widespread use of a so-called “shopping agreement.”

A shopping agreement is a simpler alternative to the more-elaborate option/purchase agreement. Whereas an option/purchase agreement might run 8-12 pages, a shopping agreement might only be a page or two. And this brevity can also streamline the time and cost to negotiate such an agreement.

Typically initiated by a producer, the advantage of a shopping agreement is that the producer can, at no cost, shop the writer’s screenplay with the assurance that they’ll be “attached” to the project should it get “set up” with a financier under a more formal agreement.

The advantage for the screenwriter is that the producer is out there trying to get the writer’s script made, but there’s been no transfer of rights as there would be with an option/purchase agreement. This can give the screenwriter a bit more negotiating leverage should the producer find a proper buyer for the script. Still, there are many details to consider.

You should never sign any contract without having an entertainment lawyer represent your interests. And make sure you use an entertainment lawyer and not Uncle Ed, who does elder law.

Start there and make good business and legal practices part of a long career. If you have any comments or suggestion, I would love to hear them.

~

Ken Aguado is a screenwriter/producer/author. His recent produced credits include the documentary “Miracle on 42nd Street” (2017) and the drama “An Interview with God” (2018), which he also wrote. He is the author of “Based On: A Non-Lawyer’s Guide to Acquiring Film and Televisions Rights from Everywhere.”

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