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Racoon
04-28-2013, 02:33 PM
Got a question for the legal screeenwriters. Below is a paragraph in an option, can any one explain it. I have my own idea what it means but want to see what you all think.


Terms




The term of this agreement is two yearswith the “Producer/s” option to renew the agreement for anadditional year for an amount to be decided upon at the end of thefirst term unless both parties agree to terminate the agreement inwriting within two weeks of terms end.

Thanks for any input!

racoon

Bill WiggleArrow
04-28-2013, 02:42 PM
...for an amount to be decided upon at the end of thefirst term unless both parties agree to terminate the agreement inwriting within two weeks of terms end.

Who decides on the amount? That should be clarified somewhere in the agreement.

SoCalScribe
04-29-2013, 02:01 AM
Got a question for the legal screeenwriters. Below is a paragraph in an option, can any one explain it. I have my own idea what it means but want to see what you all think.


Terms




The term of this agreement is two yearswith the “Producer/s” option to renew the agreement for anadditional year for an amount to be decided upon at the end of thefirst term unless both parties agree to terminate the agreement inwriting within two weeks of terms end.

Thanks for any input!

racoon

That is a horribly drafted contract. Taken with what I assume is the intent, it means the option is two years, and they have the option to renew it for one additional year for an amount to be decided upon at a future date... but the whole option can be terminated in writing within two weeks of the end of the initial option period if you both agree.

Here's why this is a horribly drafted contract:

1. There's no mention of how the amount for the extension is "decided upon." Is it at the producer's discretion? Yours? Mutual? Mutual with a tiebreaker to the producer? I'm assuming it's the producer in his sole discretion, but ambiguity in this case is not good drafting.

2. Why does it say the whole option be terminated within two weeks of the end of the initial option period? It's a legal agreement; as long as both parties agree in writing, there's no restrictions - timing or otherwise - on when an agreement can be terminated or amended or extended.

3. Why would terminating the contract by mutual agreement within two weeks of the initial option period even be something this producer entertains? It's an option... by nature, if he wants to terminate the agreement, he can just let it lapse. He doesn't need to get that in writing from you.

Issue #1 above should be the most concerning to you as a writer. What if this producer says, "I've decided that the amount for the extra year will be $1." (He's within his rights to do that, according to the contract.) Issues #2 and #3 are just a clear misunderstanding of how the legal process works. And the fact that it's in a legal agreement worries me. I would absolutely not sign this option agreement until you've had a real attorney look it over.

Ambiguity in a legal agreement is a real pain in the ass. Most lawsuits are fought over the perceived interpretation of a contract... so the more ambiguous it is, the more likely you are to be involved in a dispute because one party assumed the contract meant one thing, and the other thought it meant another. If this producer is okay with this agreement for his needs, that's his choice... but you better make sure you have a capable attorney looking out for your interests if you're thinking about signing this.

Racoon
04-29-2013, 08:23 AM
Solcal, if nothing is said and and the term lapses without them giving even the dollar amount and nothing is done in writing, would the option term just expire then because nothing was given for continuance of the option?

racooon

EdFury
04-29-2013, 09:33 AM
Solcal, if nothing is said and and the term lapses without them giving even the dollar amount and nothing is done in writing, would the option term just expire then because nothing was given for continuance of the option?

It may not. All the producer would have to say is that he's extending it for nothing and you're stuck. SoCal is right. That's a horrible deal. You need specifics in your contract so you're protected. It doesn't hurt the producer to be specific at all. It only hurts you when it's worded like that. You need to agree on a specific renewal amount for the option. And again, SoCal is right on the money, the "two weeks before" clause makes no sense. There is no reason for this at all. You can amend an agreement anytime if you both agree. Get a lawyer to look at this.

grumpywriter
04-29-2013, 10:30 AM
Going to have to revert to that old DD standby --

GET A LAWYER! FAST!

SoCalScribe
04-29-2013, 11:39 AM
Solcal, if nothing is said and and the term lapses without them giving even the dollar amount and nothing is done in writing, would the option term just expire then because nothing was given for continuance of the option?

racooon

In the specific case you're talking about, the option would lapse not because of the lack of compensation, but because of the lack of notice. The money for the extended option is irrelevant because it's not specified in the agreement.

You have to think of these things in terms of worst case scenario. Based on the language that you posted, how could this producer exploit it to his greatest advantage? Well... it doesn't specify the amount paid for the extension... and it says the amount will be decided later but doesn't specify how or by whom... so in this situation, the worst case scenario is that the producer later sends you a notice that says, "I've 'decided' that the extended option is free, and I'm hereby notifying you that I'm exercising my right to extend the option for another year."

Worst case scenario with the language you provided is that you option it to this guy for three years for the initial option price (whatever that may be).

Racoon
04-29-2013, 11:53 AM
All I can say about this situation is we will find out at end of may what this all means.

But thanks so much for your input and advice.

racoon