I have talked a lot about contracts/agreements on this blog. I have discussed what kind of contract we should sign. How can we spot red flags in a deal? What is the need to sign a contract? However, we have yet to discuss the right time to sign a contract, primarily an entertainment contract. This blog post will address this important question with specific reference to the Indian film industry.

The film industry works quite differently from other industries (say- the insurance industry or software industry). The film industry is still informal. There may be a glaring difference in bargaining power between two stakeholders (imagine an agreement between a big production house and a newcomer writer). Independent film production is another example where people mainly work on relationships rather than documentation. Hence, this industry has its unique issues and challenges. One of the significant problems is identifying the “right time” to sign an agreement.

Let me explain it to you with an example.

Mr. Raj is a newcomer writer. He wrote a unique story, got the same registered, and then started pitching. A producer liked the story but suggested a few changes to see its possibility. He made those changes. Then, the producer asked him to write at least a first draft of the screenplay to see if this story had the potential for a feature film. Mr. Raj complied. The producer likes the first draft but still has a few reservations. He introduced him to the prospective director of this project. The director suggested a few changes, so the screenplay follows this vision. Mr. Raj had a few meetings with the director, and then he prepared the second draft of the screenplay. All these things took around three to four months. Now, due to some reason, the producer dropped this project. Now, Mr. Raj is at a loss! He has invested 3-4 months in this project without any money. Now, he has to approach another producer. This second producer shall have a different vision, and the writer has to modify the script as per his instruction! It might go in a loop. So, the author is working round the clock without any payment.

How can one avoid such a situation? The answer can be by signing a contract. However, when is the right time to sign the contract? Practically, one cannot insist on signing a contract immediately after the producer has shown interest. However, if the producer has shown interest but requested you for re-writes or material revisions, you need to dedicate your time and energy. It is time; you should sign an agreement. Remember, before starting your material involvement with the project, there should be a contract/MOU capturing your remuneration, credit, and roles & responsibilities.

Let’s imagine another scenario in our illustration of Mr. Raj. Suppose Mr. Raj has involved substantial time in the project without a contract. Now, he is desperate for a contract to secure his payment and credit. The producer now offers him an agreement with many unfair terms and conditions. He will not be in a position to bargain much. He has already invested his time and energy in the project. It won’t be easy for him to back out of the project (considering the time and effort he has already invested). Hence, signing an agreement at this advanced stage compromises the bargaining power of a created. The tip is to get your paper straight before profoundly investing in the project. In other words, you should be able to back out if the deal is not going in your favor. In such a scenario, you shall be able to negotiate a better deal for yourself.

Similarly, a filmmaker should also be particular about signing a contract at the early stage of film production. I advise my filmmaker clients to sign the document before they make any payment. Also, you as a filmmaker must understand that you cannot acquire any intellectual property right in any work (script/music/audio/video/creative input) without signing an agreement with the author (Section 17 read with Section 19 of Copyright Act, 1957). Hence, you must sign a contract/MOU the moment you have finalized the specific contributor of your film.

Now, we should not rush to sign an agreement by downloading any template we see on “Google” and doing away with this formality. Such action does more harm than good. We should have a detailed discussion with the counterparty regarding roles, consideration, credit, contribution, timeline, payment schedule, etc. After we have finalized these terms, we should draft the agreement.

Today I have touched on a fundamental aspect but trust me; most creators ignore this primary aspect. This article has given you clarity. If there is any query, feel free to book a legal consultation session with us by email at attorneyforcreators@gmail.com. Please share this article with your community to spread awareness!