Q: My friend and I just finished writing our first feature together and now we want to produce it independently. We both work in the film industry and we’ve worked well together in the past, but this will be our first time producing our own thing. Should we create a contract between us for this film? I don’t want him to think I don’t trust him. If he’s OK with it, what should be in there?
If you ask your friend to sign a contract, you’re right: He might think you don’t trust him. But if he’s smart, he’ll understand that you’re actually trying to protect him. And in the long run, that’s better for your nascent filmmaking career together, and maybe even your friendship.
I don’t think I’m being controversial when I say that you should have a written contract for every business arrangement you enter. In fact, some situations require you to put the agreement in writing or it isn’t valid (for example, if the contract can’t be performed in less than a year). A well-written agreement performs two important functions: First, it provides instructions to you and your partner on how to perform the deal. Second, in the event the contract is breached or the business relationship goes bad, it will act as evidence in court of what the obligations and duties of both parties were supposed to be.
I think written contracts are doubly important between friends. When business relationships work, it’s because they’re built on formality and hierarchy: the kind of structure that goes out the window because of the familiarity friendship breeds. I understand the impetus behind letting formal arrangements slip—you already know and trust each other, so why bog it down with needless rules and organization? You may even be going into business with your buddy precisely to avoid that kind of formality.
But that’s a recipe for disaster. Familiarity can lead to a lack of communication, and create too much ambiguity, too little accountability, and resentfulness from each party that the other side isn’t carrying their weight. All of these things are anathema to the very foundation of contract law. If there’s too much ambiguity in an agreement, or it’s too one-sided, the contract will be unenforceable.
When I talk to clients, they are almost never dealing with a partner who purposely stabbed them in the back. The relationship fell apart because they discovered their work habits didn’t gel with their partners’—maybe one of them liked to work in the mornings and the other didn’t; maybe one wanted to get permits for every location but the other wanted to shoot everything guerilla-style; maybe neither sent screeners to festivals because they each thought the other would do it—and that created a sense that neither party could rely on the other.
Even in situations like yours, where you’ve worked together before, things can get complicated when you try to do something on your own, and money, credit and pride are on the line. A written contract can help smooth over those issues and give you much-needed structure.
So if your friend is OK with a contract, what should you put in there? You need to ensure that all material terms are covered in the agreement. Material terms are those that are so important that without them, the contract can’t be performed on and won’t be considered valid. Those are: the parties involved, the scope of the agreement, the duties and obligations of each party, anything dealing with money, copyright ownership, licensing rights, timelines for completion that are reasonably foreseeable, and anything else that you think is too important to leave to chance. For a feature film, I would be sure to discuss topics like your credits, how you’ll split profit (if any), and whether the film will be self-financed or financed by investors.
An experienced attorney can help you cover the important issues. If you do it right, you’ll be able to navigate around the ambiguity and manage your expectations of the other party. And that way, even if the business relationship doesn’t pan out, you can still salvage the friendship. MM
Gregory R. Kanaan, Esq. is a Boston-based attorney representing artists, filmmakers and designers in Massachusetts and New York. His practice focuses on entertainment and art law, as well as intellectual property issues. He has resolved disputes involving copyrights, publicity rights, trademarks, and contractual disputes for a wide range of independent filmmakers and design professionals. Prior to becoming an attorney, Mr. Kanaan was a television producer, creating documentaries and series for The Discovery Channel, Court TV, TLC, and A&E, among others. When not practicing law, Mr. Kanaan writes for his blog, The [Legal] Artist, which aims to educate creative professionals on the legal issues that affect them most.
The answers to legal questions provided here are for general education and information purposes only, and are not legal advice or legal opinions. The information provided in this article is not intended to create a lawyer-client relationship between Mr. Kanaan and a reader.