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 fact sheet looks 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: i.e. 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, i.e., 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 licensing 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 particularly 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, for television there are four equal stage payments

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%

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. 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 (i.e. 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

This is a list of 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 fact sheet cannot cover every possible clause.

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, e.g. 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.

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 withhold 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 licensed or assigned. Where successful in withholding 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 jeopardising 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 novelisation, and another writer is brought in, you might only receive 25% of the royalties, with the rest going to the noveliser (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 licensed 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 licensee). 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. [

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, i.e. 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 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). 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 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).

Finally...

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

permission for the producer to use the approved likeness, 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'