Introduction
When you're a newcomer in the industry, production contracts can seem like a maze of legalese. Even in larger studios or agencies with a more organised process, they can stay shrouded in mystery. It's a complex area, and many producers opt to avoid it as much as possible - this is a mistake you’ll regret as soon as something goes wrong.
Legal teams primarily focus on safeguarding intellectual property and assets; the finance department is concerned with ensuring monetary security, while sales teams often urge for flexibility to enhance client relationships. In this dynamic, gaining proficiency in contract management is not just about self-defense. It's an essential step for anyone aspiring to take their career in production to greater heights.
Let's delve into these contracts, breaking down their significance and application:
Digital Contracts
- Non-Disclosure Agreement (NDA): This foundational contract ensures the protection of confidential information. For example, before discussing a new product design with a potential vendor, an NDA would be signed to keep the details confidential.
- Unilateral: Used when only one party (like your production company) shares sensitive information. The receiving party is legally bound to not disclose this information.
- Mutual or Bilateral: Employed when both parties share confidential data. This agreement ensures that both parties understand the obligations to safeguard the exchanged information.
- Master Services Agreement (MSA): A comprehensive document that outlines the general terms of engagement between two entities. For instance, if you're collaborating with another agency for a long-term project, an MSA might set the groundwork.
- It addresses indemnification, confidentiality, terms of service, payment structures, marketing rights, and more.
- Statement of Work (SOW): This provides specifics for each unique project under the broader MSA. Suppose you're launching a new marketing campaign for a client; the SOW would detail the scope, timelines, deliverables, and cost.
- It comprises a detailed project outline, listed services (like web development), tangible deliverables, key milestones, payment breakdown, and associated risks.
- Change Order (CO): When there's a deviation from the original SOW – perhaps due to a client's evolving needs or unforeseen challenges – a CO comes into play. For example, if a client wants an additional feature in an app that's already under development, a CO would detail the changes, cost implications, and extended timelines.
Film Contracts
- Location Agreements: Prior to filming at a specific site, such as a privately-owned mansion, this contract ensures the film crew has obtained permissions. It details the terms of use, any associated fees, and the period of occupation.
- Talent Contracts: When hiring actors for a film, this contract delineates their roles, compensation, hours, and other conditions. For instance, it would specify an actor's on-set hours, scene commitments, and remuneration.
- Crew Contracts: These contracts are akin to talent contracts but are tailored for crew members, detailing their job responsibilities, payment structure, and working conditions.
- Music Licensing: Incorporating a famous track in a movie requires this contract. It secures permissions from the copyright holder, outlining the terms of use and associated fees.
- Distribution Agreement: This stipulates the terms of film distribution. If a movie is picked up by a streaming platform, this contract would define the geographic regions it can be streamed in, the duration of availability, and revenue-sharing structures.
- Clearance and Release Forms: These ensure you've obtained the rights to showcase brands, artwork, or people’s likenesses in your film. For example, showcasing a painting or branded apparel in a scene would require such clearances.
Tips to get started
I highly recommend trying to draft these contracts, while of course seeking counsel from seasoned producers or legal experts in your company. You’ll be exposed to the mistakes or oversights you're making, after a dozen of these contracts you’ll start getting the hang of it!
Having a senior producer supervise the process isn't only due diligence, it’ll help you feel more confident about the contract and you’ll have backup in negotiation. It's also the best way to accumulate more tacit knowledge and invest in your career.
So let's recap some tips:
- Mentorship: Seek out a mentor in your organization or industry. Their experience can guide you through the complexities of contracts, helping you understand the nuances and best practices.
- Always Read the Fine Print: It's easy to be overwhelmed by the volume of information in contracts. Don't skim; always read and understand every clause. If something's unclear, ask.
- Templates: as you get more and more familiar with your templates the process will become easier, and safer. You can continue adding or modifying clauses to your contract template over time as you learn over projects.
- Communication: Always maintain open channels of communication with clients and stakeholders. Many contract complications arise due to miscommunication or misunderstandings. I personally send a Google Document with comment access for the first review, once signed I make sure a permanent share link to the contract is accessible somewhere by the client’s project management team.
- Documentation: Keep records of all communications, especially when it concerns changes or additions to a project. This habit can be invaluable if there's ever a dispute about what was agreed upon.
- Negotiation Skills: This is another realm but a valuable one - contracts are just one form of negotiation and improving in that domain will help you in all aspects of production.
Exercise
Finish preparing your scope of work agreement.
