This article is written by M.Arjun, a 5th-year student studying in Government Law College, Thrissur. This article deals with the Types of Agreements Related To Film Production.
India boasts of being the second-largest film industry in the world. A record number of over 1200 Indian movies are released every year driving annual revenue of more than 180 billion dollars. The hectic process of filmmaking often involves an army of men working foreground and background in the industry. Furthermore, the art of filmmaking involves a lot of promises, transactions, and commitments. It is quite important that these relationships are regulated by law. Hence, the need for a wide variety of legal agreements throughout the operations of filmmaking comes into play.
Stages in Film Production
The process of moviemaking involves 5 different stages:
- Film Development: This is the first stage of the process where the idea for the movie is developed, the preliminary budget is decided and the necessary rights are secured. So once all the arrangements are made, the project goes through the pre-production phase.
- Pre Production phase: In this phase, all the arrangements such as preparing the detailed cast, developing complete budgets and selecting the locations for the shoot are done.
- Production phase: This is the phase where the film is actually captured or shot. It involves the effort of a large number of people working hand in hand.
- Post Production– After the film is shot, all the editing, dubbing, sound mixing, and visual effects(VFX) works are done during this stage.
- Distribution: In this phase, the producers distribute the movie to various distribution channels for releasing the movie to the masses.
Importance of Legal Agreements for the film industry
A lot of written agreements are required during each of the above five phases. From the script to the screen, the process of filmmaking involves a lot of Intellectual property rights. Moreover, a lot of content creators and artists form part of a movie. Hence it is quite obvious that the needs for differentiation and protection of intellectual property rights of various entities come into play. There can be negotiations between content creators and producers in relation to the various IP rights. These are recorded through various contracts.
After all, movies are a form of business. A lot of capital and other resources are involved in business transactions. Failure to document these transactions by written agreements can lead to uncertainties and heavy losses. Moreover, investors and banks have started to mandate the producers to have written contracts with them as well as with the cast and crew of the film. Various liabilities arise during production due to non-performance of duties and negligence of crew members. Hence, the liability in the process of film development is also to be clarified.
The entire process of moviemaking is time-bound as time is one of the crucial factors affecting the commerciality and success of the film. Earlier, the film industry could not enforce its rights due to the absence of written agreements. But, now the media and entertainment industry went through a significant change so as legal awareness. The industry takes its contractual and intellectual property rights seriously. At present lawsuits, litigation and contentious matters are nothing strange for this robust industry. Legal agreements facilitate the parties to approach the court and other dispute resolution mechanisms to protect their IP rights and contractual rights.
Types of agreements used in film-making
There are various kinds of agreements used in different stages of moviemaking. It is not essential that all of these agreements shall be used in a particular movie. It depends on various circumstances related to a movie. We will discuss some of these agreements below:
Film Director Agreement
A director is the soul of a movie. Hence, a director’s agreement deserves great significance. Director services agreements are executed between the production company or producer and the director. The motive of this agreement is to lay down the terms and conditions in connection with the services provided by the director.
The main contents of this agreement include:
- The main objective required to be fulfilled by the director shall be highlighted under this agreement. All the services rendered by the director will be included. The budget of the film shall be agreed by the producer and the director to avoid uncertainties at any stage of the movie.
- The salary of the director and the time period for such payments will be agreed upon by the parties. Provisions for other remunerations such as profit sharing and royalties shall also be provided in this agreement. The parties may agree upon conditions such as if the film crosses gross revenue of a prescribed amount, the director shall be provided with a bonus of a prescribed value.
- The agreement also provides the rights and duties of both the producer and director in detail. Rights of the producer such as dubbing the movie in other languages, planning the sequel of the movie, etc are included. The obligation of the producer includes providing necessary funds as per the agreed budget, obtaining necessary rights for the film and so on. Whereas, the rights of the director include matters like deciding the technicalities of filmmaking, approving the final version of the film, monitoring the post-production works, and appointment of associate directors. The exclusivity of the director during various stages of production shall be agreed on. It means that the parties should decide upon whether the director can work on other projects simultaneously.
- The agreement shall also refer to the term of appointment of the director and conditions for termination of his service. The various time periods for completion of each task such as pre-production, post-production and filming period will be mentioned in the agreement. All the matters in relation to the movie where both parties ie the producer and director is required to make a joint decision should be expressly provided in the agreement. This includes matters such as deciding the location, key cast & crew members, marketing plans, budgeting and so on. The parties can even negotiate on matters such as on-screen credit, review of the progress of the film, etc can be made in the agreement.
There may be instances in which a producer cannot meet the funds required for funding a movie project. In such cases, the producer collaborates or enters into a tie with another producer or production company. The Co-Production agreements combine two or more producers for the creation of the film.
The agreement should clearly mention the name of the movie as well as parties and the purpose for which a co-production is undertaken. The total budget for the project will be agreed upon. In addition, the contribution of each party along with time limits for raising such money will be provided in this agreement. If the other party is given the role of an executive producer, it should be expressly mentioned in the agreement.
The control of each party on the creative and business aspects of the project will be laid down under this agreement. This is an important section of the confidential obligation through a clause in the Co-Production Agreement.
The Co-Production agreement also deals with the distribution of profits among the producers. Provisions for recoupment (recovery of expenses) and division of net profit between the producers are dealt with in the agreement. The right and obligation of parties such as the right to audit the production process and maintenance of books of accounts also form a part of the Co-Production Agreement. Dispute resolution mechanisms and conditions for termination of co-production will also be added to the agreement.
It is very difficult to share certain aspects such as the IP rights connected with a movie. Hence there is a common practice between the Co-Producers to form a separate entity such as a joint venture for the purpose of producing the movie.
Actor Services Agreement
An actor is the face of a film. The role of actors especially the main actors are so crucial to the process of filmmaking. So it is quite essential that the services provided by the actor are documented in detail. An actor services agreement is entered between the producer and the actor. It includes various varieties of clauses.
The term of employment of the actor should be precisely recorded. All the working days including the hours of work should be provided. The agreement can contain an exclusivity clause which prevents the actor from acting in any other movie for the agreed time period.
The agreement also imposes certain rights and obligations upon the actor and the producer. The producer can mandate the actor in connection with his appearances such as the preservation of a particular hairstyle or beard style. In addition, the producer can have requirements relating to the role of the actor in the promotion and marketing activities of the movie. All the amenities provided by the producer such as food, accommodation, transportation, and clothing will be mentioned in this agreement. The producer will also provide the actor with public liability insurance for covering the damages caused due to an accident.
Actors are also subjected to strong non-disclosure clauses to protect the confidentiality of various aspects of the film. The salary provided to the actor, other bonuses and provisions for profit-sharing also make its place in the Actor-Services Agreement. The salary can be fixed or it may be as per the profits made by the producer. Conditions for termination of the contract and dispute resolution mechanisms are also added to the agreement.
Locations play a prime role throughout the process of actual production. Locations and sets are heavily relied on by the filmmakers. A location agreement governs the use of a particular property for the process of filmmaking. A location agreement is executed by the location manager or the producer and the owner of the location.
The exact uses of the property are laid down in agreement. All the portions and areas within the location, availed and used for the purpose of production will be set out in the agreement.
The time for access, the duration of use of the location along with provisions for the extension of the time period is added. The rights and obligations of both parties are important. All the rights in relation to the ‘right to access’ should be expressly provided. The permission to use certain equipment, and the right to make modifications and alterations to the location hired forms some of them. The property owner’s right to file an injunction to prevent the use of the location is provided if the location shoot is not as per the contract or if any physical damages are caused to the location.
The payment provided to the owner of the location and the time period for making the payment is agreed upon by the parties. The agreement also has an indemnity clause where the location owner indemnifies all the damages caused to any shortcomings or drawbacks in the location or set provided by him. The producer indemnifies the location owner for all damages caused to him in connection with the use of the location.
The price for hiring the location forms an integral part of the agreement. Nature, mode time period for making the payment is also included.
The process of filmmaking is said to be completed only when the film is distributed to the public. A film is distributed through various methods such as through theatres, OTT platforms, DVDs and so on. A distribution agreement is negotiated between a production company and the distributor.
The distribution agreement specifies the territory in which the movie is planned to be released. Territory can be worldwide or may be limited to a particular region or country. The length of the term of distribution is added. The agreement mentions the number of theatre/screens in which the movie will be exhibited. It also lays down the duties and rights of each party. The promotional and advertising activities which the parties agree to is provided in detail.
The agreement also will have a detailed clause on the collections and remuneration of each party. For instance, if it is a theatrical release, the agreement clearly prescribes the amount or percentage of daily collection that the distributor, producer and theatre owner is entitled to receive. Such amounts can be varying in accordance with the number of days the film is played in the theatre.
The foundation of a movie lies in the screenplay commonly called a script. Normally the screenplay of the movie is created by the director or a separate scriptwriter. The owner of the screenplay enters a screenplay agreement with the producer. Generally, the producer acquires an exclusive right to lock in a script until the production of the movie begins.
The conditions for termination of the above-mentioned rights will be specified in the agreement. All the remuneration and services provided to the writer is also agreed upon by the parties. All the provisions with regards to changes in the script are mentioned in detail. The situations when rewriting of the script requires additional compensation for all the rewrites and changes will be sorted out in the agreement. The right of a director, producer or any other crew member to review and make changes to the script should be specified.
There might be circumstances in which an additional scriptwriter is hired to rewrite or make changes to the script. In such cases, the parties shall negotiate on matters relating to the credit of the screenplay. If the writer has an exclusive right to prepare the sequel or remake of the script, such right will be explicitly provided in the agreement.
Apart from the agreements listed above, there are various other agreements such as finders agreements, cast and crew agreements, marketing agreements, work for hire agreements, investment agreements and so on. The modern film industry deals with a lot of agreements for specific purposes. From cinematographers to catering providers, services are often documented. There can be several NOCs signed between the creators and producers for the use of the intellectual property. In addition, a lot of agreements for the protection and licensing of IP rights are executed. Confidentiality and non-disclosure provisions form part of almost every agreement as confidentiality is of prime significance throughout the process of movie production.
A film always involves a lot of crew members working at different levels. Services contracts are essential for the performance of their functions. Most of the agreements are sometimes covered in a master service agreement with a detailed scope of work. It is also quite common that certain crew members perform multiple functions. For example, the actor and producer of the movie may be the same. In such cases, the contractual requirements also vary. Hence, It is difficult to standardize the agreements essential for a particular movie as there is a wide variety of agreements which depends a lot on the context of the movie.
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