If you become one of the few aspiring screenwriters who actually sells a screenplay or gets writing work as a result of your spec script, you should get to know the legal lingo of the industry. What are the various types of agreements and what exactly do they mean to you?
An option agreement signifies that you, the writer, have given exclusive permission to a production company or producer to try and set up financing and get your screenplay turned into a movie. The option agreement will specify the final sale price of your screenplay and the amount of time that the production company or producer has in which to do this, normally six months to a year. Have an attorney review this type of agreement.
A release form protects whoever is reading your screenplay. Many screenplays with similar concepts or themes circulate Hollywood at any given time. If someone reading your screenplay already has a similar project in development, they don’t want you accusing them of theft when their original movie hits theaters. As a general rule, no one will read your screenplay without you signing a release form. Just make sure that’s all you’re signing off on.
Familiarize yourself with the Writer’s Guild Minimum Basic Agreement. This forms the groundwork of most contracts and outlines the basic deal terms that you can and should expect to see. Your goal (or your agent’s) is to negotiate something better. Identify your priorities so you know what you’re willing to compromise on and therefore which points are negotiable.
There are four basic contracts:
Option Agreement – Spec Script
An option gives a producer the right to shop your screenplay around to other interested parties for a set amount of time, for which they will pay you a set fee, ranging anywhere from $1 to a few thousand dollars. For example, you might sign an option deal for twelve months for $1,000. At the end of twelve months, if there has been no purchase and you do not wish to renew the option, then the agreement ends and you keep the $1,000 option fee. The agreement will spell out the terms of the option, the final purchase price and other basic terms. Again, be very careful about what you’re signing.
Producers need option agreements so that they don’t spend a large amount of time setting up your project with one studio only to find that another producer has just sold it to another studio. Once you’ve signed an option agreement, your project is off limits to anyone else until the specified option period has expired. Be sure you trust your option holder and his or her ability and necessary contacts to get your project rolling.
Purchase Contract – Spec Script
This is the actual sale of your screenplay. The purchaser buys all the rights to your screenplay outright, plus there is often additional compensation if your screenplay is actually produced as a movie. This is great for you but you really need an attorney to help you review the contract.
Oral Contract
An oral agreement allows a producer to negotiate a deal around your screenplay. Unlike an option agreement, nothing is signed and no money changes hands. But, you want to establish a paper trail. Follow up meetings and phone calls with letters, faxes or e-mails that cover the terms discussed.
Oral contracts may not lead to anything concrete, but they help establish relationships that can be helpful for future projects.
Deal Memo – Writing Assignment
Screenwriters who have written at least one produced screenplay sometimes find work through writing assignments. Some agents use a screenplay to shop the writer around for writing assignment work.
A deal memo outlines what you will write, by when and for how much compensation. There is partial payment up front, with the remainder upon completion and delivery. A legal opinion is a good idea, but keep in mind that being easy to work with is a good way to keep the work coming in.