The contract is intended to facilitate the negotiation process between an author or his representative and a company that employs that author. Businesses, writers and their representatives can use these forms to commemorate employment contracts before a “long form” agreement is presented. 2. The company is required to add to the memo or contract (the document recalling your agreement with the company) a summary of all the preconditions that will preside over the conclusion. (Article 13.B.12) You should ask your agent for coverage and make sure these conditions have been met before working with the services. However, many agreements are not subject to WGA conditions. A general rule that seems to accept the practice of the entertainment industry is that all literary rights that must be acquired to make a film should range from 2% to 5% of the film`s budget. In many cases, LPo`s are negotiated to provide that the purchase price is within that percentage of the film`s budget. The budget is generally defined as the actual final production budget of the film`s image minus interest, financing, closing borrowing costs and overhead. At least the projected budget of the film`s image serves as an effective starting point for determining the purchase price. Additional changes and/or changes to the optional material may be made before the license is obtained by (i) negotiations with the original Writer and (ii) the allocation of the new writing in accordance with the terms of this Contract.
Under these conditions, the manufacturer acquires, during the exercise of the option, a license for the material available without option, as well as the modifications and/or subsequent developments agreed in the contract. This contract is not intended as legal advice, but is proposed by the Guild to ensure timely delivery of contracts and hence a timely payment to the author. The WGA`s core agreement requires companies to honour contracts within certain deadlines, after agreement on important points of the contract and/or the start of services (usually within two to three weeks). In the event that the company does not deliver a contract within the MBA deadlines after the main points of agreement are negotiated, this form contract can be used to confirm the contract with the company, in the same way that a memo deal is used. DEVELOPMENT ACTIVITIES DURING THE OPTION PERIOD. During the option period, the manufacturer has the right to complete all stages of development (including the rewriting of the property) as well as financing activities, to add creative elements such as Jack Nicholson, Julia Roberts and Barry Levinson to the project and even to make pre-sales within and abroad of the property – depending, of course, on the actual exercise of the option. If you are a writer-director, it is in your best interest to be actively involved in development and negotiate a clause that guarantees you that you are also directing the project or, at the very least, that you have a first right to negotiate. This is a difficult point to get for the first time from directors, but it is possible. As a Writer, you should try to get the first opportunity to do all the project rewrites or at least the first rewrite. Percent of the budget (floor/ceiling) relative to the amount of the set: if the buyer exercises the option to purchase the script, an amount or a percentage of the final budget “approved” of the film image (usually with a floor (minimum price) and a ceiling (a maximum price) is paid for the “purchase price”. If the WGA`s core agreement is applicable, it is important that the parties verify and be aware of the most current minimum compensation requirements.
Much of the confusion associated with the use of the option is due to the fact that a purchase price is negotiated but is not paid when the contract is executed and there is no obligation yet to pay the purchase price, unless the option is actually exercised.