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Old 02-04-2015, 08:48 PM   #1
stix
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Default Possible entanglements of a Shopping Agreement?

I need some advice. I don't have the money to consult a lawyer and I don't have an agent or manager to ask either. I'd just like to make sure I'm not letting myself get screwed (and definitely not without the lube of significant upfront cash).

An indie producer wants to enter into a shopping agreement for my script (for a few months, with one possible renewal. Not forever). The details of a purchase price/option price will NOT be stated in the agreement. It's basically just permission for him to shop it around to his connections and see what he can do as far as funding, getting possible attachments (actors, directors, etc.), and interest from prod co's who might buy it.

My questions are:

1). Though non-exclusive, will this preclude me from chasing any other opportunities with this script or subsequent drafts of it? For instance, in screenplay contests, or with production companies (those that the indie producer has not already tried)? The AFF screenplay competition rules state that the script may not have been optioned prior to the contest date. Is a Shopping Agreement too much like an Option to not consider it one for situations like contests? Basically: will this screw me for contests?

2). If the script is sold to a prod co (as the result of a connection the indie producer made during the agreement period), I get to work out a deal for the script between the prod co and myself, without him involved. He also gets to work out his own compensation with them, without me involved. Could this screw my deal up if he asks for too much?

3). Though the agreement does not outright state it (but I'm not an expert in legalese), does this shopping agreement "attach" him to this project, and should I let all others I may enquire with (agents/managers/prod co's) know about this shopping agreement, despite the fact that it's non-exclusive? Will this screw me with finding an agent/manager or interested prod co?

Thanks for reading this. This is my first post, but I have been reading these forums for years, and I really appreciate the wealth of knowledge and experience here.
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Old 02-05-2015, 12:02 AM   #2
PoisonIvy
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Default Re: Possible entanglements of a Shopping Agreement?

*Not a lawyer*

Shopping agreements are quite common if there is no agent in the middle. But the whole purpose of the shopping agreement is to make sure that producer has exclusive period where he or she can set up the project. These things don't happen overnight. Imagine if they get it going and then realize it is no longer available - makes them look like a moron. If an agent is in the picture, they usually assign "territories" to producers to make sure wires do not cross and stay in the middle of things. If you do not have an agent and you like the producer, there is no harm in letting them run with the project for a period of time - 6-12 months. Just make sure you are kept in the loop where the script goes.

If the agreement is non exclusive then by definition it does not preclude you from anything…

If the producer sets up the script, your lawyer will work out your deal and his lawyer will work out his deal but if either of the said deals doesn't close, there is a chance the project will fall apart - producer brought them the script and it is highly unlikely the financier will go around their back. There is a submission claim and producer can technically sue. THe producer deserves credit for setting up the project.

You are bunching everything together - agents, managers, producers. Why would it preclude you from finding a representative?? Can you get to those production companies that have money without a producer making a call? If so, you definitely don't need anyone to shop your project and you should do it yourself. If you do not have that ability, I don't see the harm in letting someone else do this for you provided that the person you are working with actually has that ability. Do your homework.
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Old 02-05-2015, 01:22 AM   #3
goodwriter
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Default Re: Possible entanglements of a Shopping Agreement?

Yeah, I don't have much respect for "indie producers" either. 6-12 months sounds like a long time for what amounts to less than a free option.
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Old 02-05-2015, 06:30 AM   #4
stix
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Default Re: Possible entanglements of a Shopping Agreement?

Thanks for the replies.

Quote:
Originally Posted by PoisonIvy View Post
You are bunching everything together - agents, managers, producers. Why would it preclude you from finding a representative??
Ah. I was looking at the example shopping agreement here on DDP, and I see now that I skipped a few important words, and thus misunderstood part 3(c): "c. If Writer rejects an offer from a Production Company during the term hereof, and subsequently accepts an offer from that Production Company within a period of three (3) months following the termination hereof, it shall be deemed that an Option or Purchase Agreement was executed during the term of this Shopping Agreement"

My brain skipped over the "rejects an offer" part and thought that paragraph meant ANY deal with a production company that the producer had contacted (I feared that a rep wouldn't be happy to have an indie producer already attached to the script, if they happened to approach the same people. and yes, I know it'd be unlikely, but I'm trying to cover my bum). But I see now it means only if the company made some kind of offer and I rejected it, then later tried to make a deal with them.

Sorry, it doesn't take much legalese to confuse me. I should break up my reading of contracts into smaller, more manageable chunks at a time.

I'm still wondering if the shopping agreement is close enough to an option that I can't enter this script into any competitions that don't allow scripts that have been optioned.

Also, should I let potential reps or interested prod co's know about the shopping agreement? Could it possibly have any bearing on anything they do with it?

With my own efforts I have had some interest, but I figure if this guy has different contacts, I should let him shop it to them, too, as long as it won't impact any deals not set up by him. Man, I never thought I'd be so excited to get a lawyer. I shall look for one soon.
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Old 02-05-2015, 08:51 AM   #5
slupo
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Default Re: Possible entanglements of a Shopping Agreement?

Wait, is this shopping agreement a written contract or a handshake?

EDIT: Nevermind it looks like a written agreement.

Honestly, the fact that it's "non-exclusive" seems like it just opens a can of worms.

Do you really have the clout or connections to make something happen on your own?

If you do, I feel like it would hinder your process to have this random producer attached who might try to get credit or be paid off if the project is setup somewhere else. Also, if you get agents involved it seems like further complicates thing.

I don't know if a shopping agreement is considered an option. I mean, an option is called an option because the option to purchase verbiage is included. But you said purchase terms were not included.

I think you should just try to do a handshake agreement for a few months and tell the guy, let's see what you can do and I won't show it to any other producers. Don't get involved in written contracts at this point, especially if you have connections with potential reps and/or procos.

And this all hinges on whether this guy is legit, you like what he had to say and you think he can get the job done. Because if you don't have that, just forget the whole thing.
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Old 02-05-2015, 09:42 AM   #6
Pasquali56
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Default Re: Possible entanglements of a Shopping Agreement?

I would not enter into any agreement, written or oral, without a lawyer (and I've had a lot of experience with free options, shopping agreements, etc.). I would suggest contacting some entertainment lawyers and plead your case. You may very well find one nice enough that will review an agreement and be willing to accept a percentage down the road if and when you get paid. I found one like that myself years ago and still have her today (and she did eventually make some money from my deals). I'm reluctant to give out her name, because I've already referred enough "freebies" to her. But do your own research and you'll find one. If you're serious about a writing career, you MUST have an attorney.
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Old 02-05-2015, 09:51 AM   #7
UnequalProductions
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Default Re: Possible entanglements of a Shopping Agreement?

My writing partner and I signed a similar contract with a non-writing producer with our first pilot. Probably a lot of the same language, but the nuts and bolts was that he had exclusivity on taking it out for a year and was attached if anything happened to it off those meetings.

Even after the year was up, we still worked with the guy trying to sell the project because it turned out to be a great deal for us. He was totally on the ball, got us into a lot of production companies that probably never would have read us otherwise, he helped us rehearse the pitch, and was our sounding board for every major decision.

I guess what I'm saying is that it's less about the piece of paper you're signing and more about the person. Do you think this producer is going to help you? Are you normally the kind of person who can get your stuff read on your own? Do you trust him/her? Do you like him/her?
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Old 02-05-2015, 10:41 AM   #8
Ronaldinho
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Default Re: Possible entanglements of a Shopping Agreement?

Quote:
Originally Posted by stix View Post
1). Though non-exclusive, will this preclude me from chasing any other opportunities with this script or subsequent drafts of it? For instance, in screenplay contests, or with production companies (those that the indie producer has not already tried)? The AFF screenplay competition rules state that the script may not have been optioned prior to the contest date. Is a Shopping Agreement too much like an Option to not consider it one for situations like contests? Basically: will this screw me for contests?
Non-exclusive means you are not precluded from chasing other opportunities. That's the definition of non-exclusive.

The AFF thing is harder to parse, and depends what they think of as an option. Here, however, no money has changed hands. He doesn't have the right to buy it. I think you're in the clear saying it's not optioned. AFF may disagree, though, and it's really up to their definitions. You could ask them. Or you could just not tell them, seeing as that the producer is likely to have done his work long before AFF awards time, and if you get set up its moot, and if you don't, it's also moot.

That being said, forgoing a chance to work with a producer you want to work with to preserve your eligibility for a contest is totally insane. It's backwards. The goal isn't to win second-tier contests. (I love AFF for a lot of reasons, but you don't get much heat from it). The goal is to get projects set up, get paid, and get movies made.

If you have to choose between contest eligibility and working with a producer who can get something set up, pick the latter, every time.

Quote:
2). If the script is sold to a prod co (as the result of a connection the indie producer made during the agreement period), I get to work out a deal for the script between the prod co and myself, without him involved. He also gets to work out his own compensation with them, without me involved. Could this screw my deal up if he asks for too much?
If he asks for too much, and won't take no for an answer? Probably yes. On the other hand, he's also taking the same risk with you. He could set up the script somewhere, get you an offer, and you could scuttle it by demanding too much. You are both placing a small bet on each other's professionalism. You actually hold more cards here since you can wait him out, but that'd be a lame thing to do.

On the other hand, as a producer he probably has an understanding of what his fee is likely to be on a project of this size given his track record.

Quote:
3). Though the agreement does not outright state it (but I'm not an expert in legalese), does this shopping agreement "attach" him to this project, and should I let all others I may enquire with (agents/managers/prod co's) know about this shopping agreement, despite the fact that it's non-exclusive? Will this screw me with finding an agent/manager or interested prod co?
Again, it feels like you've got the cart and horse backwards here. In a typical shopping agreement, the producer is attached IF HE SETS IT UP. And he isn't if he isn't.

Will this make agents and managers less interested in you? Depends. On one hand, if the script has been seen by everyone and passed on, then yes: the more people see the script without picking it up, the harder it will be for an agent to sell, and that may dissuade them.

On the other hand, if you can get the project set up, then you're a writer with the skills and hustle to get something set up even without an agent, and that makes you much MORE appealing to agents and managers.

With other production companies, they may be moderately less interested in the script if it's been to a bunch of places and been passed on. You can send it out, and when you meet with them you should say, before they acquire it, "Well, so-and-so was shopping it around and he took it to X, Y, and Z." If their main avenues are X, Y, and Z then they're unlikely to pick it up.

However, what seems backwards about is that in order to preserve your ability to find a production company to try to set it up, you're worried about letting a production company try to set it up. Yeah, you (might) (slightly) improve your chances of an agent by passing on this ... but the goal of getting an agent is so that you can get producers to take it to financiers so you can get it set up! You (might) (slightly) improve your chances of getting this set up by finding a producer with more clout to take it to the same (or more) places, but that has to be weighed against your ability to find and attach that bigger producer, when you've already got a bird in hand.

"Well, if I pass on this producer, maybe I'll be able to get an agent who will be able to find a producer." Doesn't make a ton of sense, does it?

I get it. This step is scary, because you've been focusing your time and attention getting good at the writing stuff, and you feel like now you've got to make decisions for which you are totally unprepared. So I apologize a little for some of the snark here (not enough to go back and edit it out, but still, I mean it with love).

While yes, you need to have a lawyer look over your shopping agreement, here is the question that matters:

Do you feel that this producer has the connections, skills, and integrity to be somebody who you want to work with, who might legitimately be able to set this up?

If the answer is yes, then barring any surprises in the legal department, sign the paper and godspeed. Go set up a project.

If the answer is no, then don't.
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Old 03-22-2020, 12:57 PM   #9
anonatty
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Default Re: Possible entanglements of a Shopping Agreement?

Quote:
Originally Posted by stix View Post
Thanks for the replies.



Ah. I was looking at the example shopping agreement here on DDP, and I see now that I skipped a few important words, and thus misunderstood part 3(c): "c. If Writer rejects an offer from a Production Company during the term hereof, and subsequently accepts an offer from that Production Company within a period of three (3) months following the termination hereof, it shall be deemed that an Option or Purchase Agreement was executed during the term of this Shopping Agreement"

My brain skipped over the "rejects an offer" part and thought that paragraph meant ANY deal with a production company that the producer had contacted (I feared that a rep wouldn't be happy to have an indie producer already attached to the script, if they happened to approach the same people. and yes, I know it'd be unlikely, but I'm trying to cover my bum). But I see now it means only if the company made some kind of offer and I rejected it, then later tried to make a deal with them.

Sorry, it doesn't take much legalese to confuse me. I should break up my reading of contracts into smaller, more manageable chunks at a time.

I'm still wondering if the shopping agreement is close enough to an option that I can't enter this script into any competitions that don't allow scripts that have been optioned.

Also, should I let potential reps or interested prod co's know about the shopping agreement? Could it possibly have any bearing on anything they do with it?

With my own efforts I have had some interest, but I figure if this guy has different contacts, I should let him shop it to them, too, as long as it won't impact any deals not set up by him. Man, I never thought I'd be so excited to get a lawyer. I shall look for one soon.
Anonymous Attorney here.

Here's the issue with language like that in a shopping agreement: it means absolutely nothing to the writer. Language like that is so ambiguous that it is likely unenforceable at arbitration or in a court of law. It does not state who will be deemed to have gotten the option, or on what terms. It does not state who will be deemed to have purchased the script, or on what terms (though clearly the ultimate buyer is the person with actual title to the property in its entirety, or at least the film rights if what we're talking about is a book, comic or other pre-existing material).

Additionally, language like this appears to directly conflict with OTHER language in a standard shopping agreement, which typically states that the parties to the shopping agreement will negotiate with the studio or buyer on their own. In other words, they can't be deemed to have negotiated with each other if they are also deemed to have NOT negotiated with each other.

In my personal opinion, a shopping agreement amounts to nothing more than a writer simply giving a producer permission to talk to his studio friends about the movie in an attempt to get them to make an offer on it. Aside from the fact that this type of relationship likely constitutes a de facto agency relationship that may result in the producer running afoul of California's Talent Agencies Act and New York's General Business Law (which both are licensing schemes regulating the business and practices of talent agents), these arrangements don't actually mean a whole lot for the writer. Effectively, it is simply a producer having express permission to take a script or idea to studios instead of the old "did ya hear about this great script going around town" at a cocktail party the writer was not invited to. Typically, nothing in the language of a shopping agreement requires a writer to accept a true option or purchase from the studio. True, a shopping agreement will typically include language that you may not "unreasonably" reject an offer that reflects "industry norms, customs and practices" for a "writer of your stature." But that language is so ridiculously vague and ambiguous that it would cost a producer way more to fight a writer in court over your rejection of an offer than they would ever expect to get back. Additionally, it doesn't stop a writer from rejecting an offer that reflects custom and practice for a writer of your stature, but merely from UNREASONABLY rejecting such an offer. My guess is that as long as a writer has a clearly articulated reason for rejecting an otherwise-reasonable offer (Example: "the studio has a bad reputation for _____," fill in the blank), courts would be unlikely to find for a producer.


Ultimately, it is simply putting on paper that a producer is allowed to do something for free that he was going to do for free all along, the only difference being that the writer knows about it and agrees to let him do that.

If a writer really wants to let a producer shop, then a simple permission slip is all that is really needed (and it's not even a permission slip, so much as it is an acknowledgment that the writer knows what's going on). These deals do not tie producers to the projects (because a studio is free to reject an offer from a producer for his services on the project, and still buy the script from the writer). And they do not tie a writer to the producer (because they almost always have language that the writer and producer will each negotiate their own deals separate from each other).

NOTHING CONTAINED HEREIN IS OR SHALL BE DEEMED TO CONSTRUE LEGAL ADVICE, BUT MERELY PERSONAL OPINION. PLEASE CONSULT YOUR ATTORNEY.
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