Option/purchase agreement question

In a option/purchase agreement the option/purchase paragraph generally states that the writer will receive @2.5% of the direct cost of the budget as part of their compensation.

In other paragraphs it may state contingent compenation terms as well.

My question is what happens if the producer sells the property to either another producer, studio, etc.? Does the writer still receive that 2.5% of the the direct cost of the budget...plus the other terms?

How do the terms of the original agreement state carry through? Or do they not at all? A producer shall be relieved of its obligations when transferring or assigning the property but what about the original agreement?

I'd appreciate any answers.

First off, there is no "generally" that need apply.

Negotiate for what you want.

I don't like options, period.

But if you must let someone else control your work at an early point in its development -- nearly always a mistake, I will add yet again -- then try for an agreement that does not limit what you will be able to negotiate for later.

You can negotiate for a floor, but leave the ceiling open.

I understand the negotiation process and all that stuff, but my question is really does the agreement that the producer and writer come to (and sign) carry through when that property is transferred.

the writer signs an agreement that states they will make 3% of the budget as the purchase price. but if the the producer sells that property to a studio for example, is the studio obligated to pay that writer the 3% the agreement stated? when the producer enters into this new agreement with the studio, is the original agreement between the writer and producer worked into the deal?

there should be a clause in your option specifying what would happen if ownership of the property is tranferred.

If, as you say, the producer has an option, then he does not actually have the rights to the work yet, but simply had control over them contingent upon exercising or completing other terms set down in the option.

If these terms have not been set down, then you have what is more than likely a slipshod contract and with an attorney on your side, you should be able to stick your nose into the deal and renegotiate your terms with whatever third party he's dealing with.

More likely, they will run for cover rather than risk being drawn into litigation.

You say that your agreement lists 3% as the "purchase price", therefore, it has not yet been purchased and the rights still belong to you.

Terms will have to be set down and sepcified in the producer's agreement with the studio and a legal representative should be looking out for your interests in that contract.

great point jimjim. thanks.

to clarify, the option is just an option until it's exercised. that purchase price has not yet been executed and the rights to the work are essentially still up for grabs. the incoming producer/studio will then most likely have to enter into an option/purchase agreement with the same writer.

thanks again.