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Filmmaking Actually Ep. 11 "What Should You Know About Contracts, Actually??"

While this is not legal advice from a lawyer, join Koura Linda as she discusses a side of the filmmaking world that should be talked about - the legal side! Don't let yourself get screwed over by bad contracts by educating yourself. What should you know about contracts and loopholes and contradictions and legalese and so on and so forth? Listen and learn, and know your rights. And then ask an actual lawyer.


If you want to ask a question or just want to say hello, you can write to us at filmmakingactually(at)gmail(dot)com! You can also sign up for our mailing list through the "Contact Us" section of our website, for filmmaking tips and tricks, along with all the latest projects and updates on what we are working on.


Below please find a transcript of this episode. Episodes are also available as audio-only podcasts here or with subtitles in this video:






What Should You Know About Contracts, Actually??


Hello, welcome back to my podcast “Filmmaking Actually!” It's been a while but we're back and we've got a ton of topics lined up for you. First for this one, I do want to start off with a little bit of a disclaimer. I'm not a lawyer and this is not legal advice. This is just personal experience and things I've learned over the years. So I'm passing along this non-legal advice as a non-lawyer to other non-lawyers in a non-legally binding way. This is just friendly advice, not actually legal advice as again I am not a lawyer. So no matter what, you do need to run any of this by an actual attorney licensed by the American Bar association, or whatever the applicable organization is for whatever country is involved. This is just experience from me and my experience as an American only. No matter what, at some point in your creative career you are going to need an actual lawyer. Eventually you need contracts reviewed or you need something and you're going to need a good honest lawyer in your corner. And yes, good honest lawyers exist. Go through friends and network referrals reviews online etc. This episode is just me as a layperson reflecting on my own experiences and sharing my opinions and observations as such. One last time, none of this is legally binding in any way. And if you have an actual legal situation where you need legal advice you do need to consult a lawyer.


Okay, with that, my first non-legally binding suggestion (I'm not going to say that every time) but my first suggestion is: Check online for reviews of lawyers. A lot of lawyers also have something called a peer review where other lawyers rate them. I was once having a really hard time with a lawyer who was being all kinds of slippery and odd. And then when I looked into them more they had a three or five star peer reviews which is not good. If I had known that going into it I definitely would have made some different choices earlier in that conversation. There are also some great pro bono organizations like the California lawyers for the Arts. If you're not in California you can research similar organizations, but always be sure to look up reviews, talk to people who have used their services, things like that.


No matter what, always always always get a contract with whoever you're working with. Any written agreement, double check that with a lawyer. If you have it in writing that you're offering them a certain amount of work and that you're expecting them to pay you a certain amount of money, and you do the work they then owe you the money. But let me backup. My understanding of how contracts work is that contracts usually protect both sides signing the contract. So in the above example you would have a record showing that you're owed for the work and they have a record of how much they promised to pay you, so you know you couldn't go back to them and be like “Actually you owe me this much money!” when the agreement was for a different amount. Things like that.


Um I personally have never had a problem with getting a contract or written agreement with anyone, aside from once and that person ended up royally screwing me over. I use it as a bit of a canary in the coal mine if you will. If the person you're working with has no interest in putting an agreement in writing or in signing off on any agreements in writing, the chances of them not being totally upfront with you or otherwise being slimy or shady or somehow scandalous is probably really high. So it isn't worth it. Just get it written down, have you both sign off on it, or probably not the best idea to go forward. Now, some people will be happy to have you sign a contract, but how do you know the contract isn't going to hurt you in the long run? There are a few things that you can look out for. First, always read the whole thing. I know it can be super overwhelming with all the Whereas and Wherefores and Therebys and flowering language that lawyers use. But there are a few things to look for that anyone can spot, red flags that are really obvious if you just look.


The first thing is the terms. How long is the contract for? When does it start, when does it end? What are you agreeing to do and how long are you expected to do it for? If you're giving the rights of something to someone else, how long are the rights being given for? And how do you get them back? Can you ever get them back? Getting out of the contract. How can the contract be broken? What happens if it is broken? Can you end it? What happens if you end the contract? Can they end it? What happens if they end the contract? If they're supposed to do something for you, what's the timeline for them doing it? And if that timeline is not met, can you cancel the contract or are you stuck?


One example is we signed with a distribution rep that had a time frame for them to sell our film. If they didn't sell the film within a certain time period, then the agreement was over. But when I read it again, there was another paragraph that said the contract auto renews after the agreed time period even if the film was never sold. So one of us would have to in writing cancel the contract, or I would never get the rights to my film back. It's pretty easy to send an email and cancel, but you have to make sure that the contract doesn't say something like “It can only be ended as agreed by both parties”, otherwise they just ignore your email forever and keep you locked in the contract for the end of time. So wording like that is called a loophole, and I'm going to talk about those in a moment.


All right, changes is another thing to look out for. Can the contract be changed after you sign it? One of the worst contracts I was ever sent literally said the other party could make any changes to the agreement at any time and did not need any further authorization from us. So once we signed it, they could change it and didn't have to tell us. No. Never sign anything that someone can change after you've signed it with no further agreement from you. I mean unless you're okay with that, but it's super sketchy and honestly a little weird for the other side to want to be legally able to make changes without needing your agreement, but leaving you legally bound to whatever those changes may be. I mean why would they do that? They may say it's to keep their workload down from having to re-contract with each person they contract, but how many changes are they expecting to make? It's just a red flag.


Okay next is caps. Not like the kind you put on your head or a type setting font but like limits to things. For example some agent or manager contracts allow the agent to make, quote-unquote reasonable expenses out of the paychecks from the talent. Right or wrong that clause should definitely be reviewed by a lawyer. My non-lawyer two cents is this: Always make sure there is a limit to how much money someone can keep that is supposed to go to you. Set an exact percent or cap it at a dollar figure, but never give someone unlimited allowances. The next thing you know you're being handed receipts for all of their quote unquote business expenses, and you have no paycheck. With that, loopholes.


Loopholes are basically exactly what it sounds like, a little loop that makes a hole. They're cleverly worded things that allow for the person the phrasing is in favor of to double back on an agreement or get out of something it seems like they are agreeing to. They're great for shady business deals and horrible for honest work. Make sure that there's nothing that isn't totally clear or reads in a way that it could be double backed on somehow. Like in the above example where an agent or someone can bill you for their expenses with no limits. That allows them to spend all your money. Uh also look for warning that allows them to make changes after you've agreed. One super tricky thing is where the contract says what happens to you if you break the agreement, but it never says what happens if they do. The best way to find loopholes is hire a good lawyer. They do exist, sadly good lawyers get bad reputations from bad lawyers who write contracts full of loopholes to double-cross unsuspecting people and then get pissed when the other side has a good lawyer and calls them out on it. Try to get personal referrals, do research on who you're dealing with on both sides. If the person you're working with has a lawyer research that lawyer. Just so you know what type of lawyer you're dealing with. Just my two cents oh also remember lawyers work for you. While they may advise you to do something or not do something, you're literally paying them to act on your behalf. So don't pay someone a ton of money to bully you into doing something you don't think is right. Make them work for you, that's their job.


Next this sort of goes back to the payment side of things, but be really careful about exactly what you're agreeing to. I was once given a contract that, through the use of really shady language, sneakily attempted to lock me in, so that for fifteen hundred dollars the other side would own all of my work for over a year when we were supposed to be contracting a few weeks of work. That's those bad lawyers who write shady business deals. Needless to say, that got a no. So just be really careful to what it is that you're agreeing to exactly with the contract. That's really all it boils down to. To do that you just need like, straight up common sense. Some of this really just requires that you look everything over carefully, and just think about what the paragraphs are actually saying.


For example: We were given an offer by a streaming platform for a bunch of our films and one of the clauses said that any of the views of our films during the free trial period would not be paid for by the platform. Okay now wait a minute, that sounds great you know, okay fine yeah sure whatever, right? No um this is a new streaming platform where they have hundreds and eventually thousands of films. So if someone watches our film during a free trial and thinks “Hey this platform's great I love this content” and then they sign up for a monthly subscription, it is kind of unlikely they're going to go back and watch our one film or two films or four films whatever. I mean let's be real, outside of things like maybe “The Office” how many times do you re-watch random content on a streaming platform? But for our films they were part of the content that would be being provided by the subscription service, and would be part of what sold the subscriber on staying on with a paid subscription. But we would never see any part of that payment. The platform would, but any filmmaker whose work was watched during the free trial would not. So no, that's not fair. It gives the platform a leg up with subscribers they don't need to pay the filmmakers for, though the filmmakers provided the platform with content to use so that they could hook people in in the first place. Not really a great deal.


It was suggested to change the wording so that free subscriptions that never buy anything, nothing is owed. As, no one made any money though technically our films were part of the promo pitch so we could demand to be paid, but I was trying to be nice. On the other hand for free subscriptions that turn into sales, the filmmakers whose films were viewed during the free subscription trial should be paid as they helped to make the subscriber interested in continuing their subscriptions. Otherwise filmmakers could have their films sit on a streaming platform for years be watched endlessly during free trials and never make a dime. Great for the streaming platform, sucks for the filmmaker.


Another thing to check in contracts is contradictions. I once was a producer and director for a project and my contract as director said I couldn't post anything to social media. But as the producer, I was overseeing all of the social media for the project. The way the contract was written, if I made any social media posts while I was directing the film, it would be in breach of contract. But it was literally my job as the producer to post to social media! This is a good place to mention that most people are pretty reasonable and they're willing to be reasonable and have conversations and all of that. The lawyer I was dealing with on this specific contract was really weird with my questions, and later just proved to be one of those totally shady lawyers trying to set up a shady contract. I asked repeatedly what problem that paragraph was trying to solve as the whole point of a contract is to circumvent future problems. I literally could not get a straight answer, and I just got all these really antagonistic and nasty replies. (Also side note if someone is being inappropriately nasty, they usually are just not a good person or they're doing something weird and they're just mad that you're probably gonna find them out) So just keep on keeping on and don't let them scare you. That's how the industry gets full of creeps, no one stands up to them. Anyway, after a lot of frustrating back and forth and them refusing to give me a straight answer, they finally just replied that they removed the paragraph. I should have seen the conversation as a red flag but hey now I've got more content from personal experience to share with you! Uh so that's a plus right?


Yeah. Um, anyway. Really just look at what each paragraph means. If you're working from more than one capacity, make sure you're not contracting yourself out of a job, or entering into a situation that just doesn't really make any sense. Also things like, if an agreement says that if you terminate the agreement the other side no longer gets a benefit. Say the contract says you can terminate the contract and then they don't get screen credit or payment or ownership or whatever, so you can fire them and they won't get those things which makes sense. But if the contract allows for either party to terminate the contract but it only says what happens if you terminate the contract and never specifies what happens if they terminate the contract, that basically means that they could quit and then demand payment or demand screen credit even if they never finished the job or didn't do what was agreed or didn't fulfill other parts of what they were supposed to do to earn those things in the first place. Again, no. It's okay to say no. In so many words, look at each sentence and really think about what it is actually saying, because it's all right there if you read it carefully and research the word or terms that are super confusing and just make sure not to get too complicated with it. Lawyers use fancy language, the internet is very helpful for kind of demystifying all of that.


Sometimes people intentionally leave things out, like just not mentioning what happens when they do something and only outlining the repercussions of your actions. Sadly, one of the hardest things to spot is when something is just missing from the page. Unless you're looking for it you may not catch it. So be sure to look for it! Just pay attention to what each paragraph is saying and how it affects them as well as you. It doesn't have to be super confusing, every time you see something outlining your side make sure there is also wording that outlines the terms for the same situation for their side as applicable. Overall just be careful of things that don't make sense or things that if you were to try and actually execute in the real world they don't totally work, or things that only mention one side and not the other.


Remember, both good and shady lawyers are meticulous. Nothing in a well-written contract is an accident. If it looks fishy, either the person who wrote it is just ignorant or incompetent which happens, or they're shady. Either way, not someone you want to enter into a contract with. I mean I don't know! Maybe you do, but any deal is not always better than no deal. Maybe you just want to say that you sold a film on your resume and you don't really care what happens in the long run. That's okay too, but remember that it's the number of people who enter into these bad deals that make it possible for shady people to stay in the business. Sure there will always be another target if you say no, but if enough people say no it does start to matter. And really, sometimes it is better in the long run to just walk away and move on than to take a bad deal. You're the only one who's gonna know what's best for you, but food for thought.


Anyway, another point of contracts is Non-Disclosure Agreements. These are basically agreements to keep your mouth shut. They usually say you won't say anything and it outlines what happens if you do. Again, if someone doesn't want to sign this, you probably don't want to work with them. If they're worried about paying money for violating the agreement, you should be worried that they're concerned that they're gonna violate it. Because let's be real, how do you put a dollar value on a breach of a non-disclosure agreement? Like, who can say what you lost with your confidential material getting out there? If they're so worried about breaking it, or if they just don't think it's needed in the first place to say that they're not gonna break it, don't get too involved. Good people in my experience have no problem agreeing. And I'm not saying that as like some sort of weird like reverse bullying thing. Just, I've literally had I think three people out of probably a hundred not want to sign an NDA, a non-disclosure agreement.


Again you have to decide what you want to do. Maybe signing a contract where they can change the terms on you is okay with you. Maybe you really really feel like any offer is better than no offer. Maybe you want a manager that spends all your money because you think they can help you get out there and that's more important than money. I don't know. It's your life and your choice. Just go into any agreement with your eyes open. Like, if you're going to make a decision like that, you can make it just know that that's the decision that you're making. Ask yourself if your future self is going to want to punch you in the face for signing a contract you can't get out of. Or signing a contract with unclear payment terms or unclear work terms or one that basically just leaves you in the lurch down the line and then your future self has to deal with it. If enough people say no to bad deals, it makes it a lot harder for shady deals to be going through in the first place.


Also never ever ever ever ever ever tell yourself “Well this person is so nice they would never screw me over!” or “”I know them, they're good people, it's fine!” I literally make my family sign non-disclosure agreements and contracts when I work with them. Because if they are really good people, they will be totally cool with signing a contract before you even start to work with them, or before you start to work for them. Contracts protect both sides. The only reason to not have a contract signed, is so one person can double cross the other and somehow have an out. Anyone who says otherwise ask them point blank why they won't put it in writing if they're so cool with the agreement in the first place? I mean obviously ask them nicely, but no good person is gonna have a good reason to not make a record of their agreements. At least not in my experience.


Also don't let anyone say that they don't have any money yet so there's no need for a contract. Yes, any full contract should always always always be reviewed by a lawyer. I'm not a lawyer, so run this by one, this is just my suggestion, but there's nothing stopping either side from writing out a simple agreement that just gives the gist of what you're agreeing to and throwing in a paragraph that says something like “Neither side is allowed to screw the other side over and there will be a full contract written as soon as it can be afforded.” I mean that's pretty loose language and it's definitely open to interpretation, but in my opinion it's better than nothing. Again, I'm not a lawyer, this is not legal advice. But just a friendly suggestion to get something in writing, and then polish it as soon as you can hire a lawyer to polish it for you. And along the way just ask an actual lawyer if you have questions. Some lawyers you can hire for like an hour of consultation and it's only a couple hundred dollars. It's not like - I know a couple hundred dollars can be a lot of money. But it's not the same to think with like, a several thousand dollar legal retainer or a hundred thousand dollar lawsuit. I will say that you should contract every single person doing any work for you at all, and you should get a contract for any work done even if it's just a basic email agreement.


Don't be like the Mcdonald's brothers who are broke because they gave some guy named Ray Kroc the rights to their entire empire with a handshake agreement that they would get paid. You can look it up! The listed founder of Mcdonald's is Ray Kroc. Which doesn't even make sense because it's called Mcdonald's like, apostrophe “S” as in owned by. The Mcdonald's brothers literally started the fast food empire that dominates the food service industry and they have nothing to show for it. Nothing! Don't be them.


Anyway, another big deal when it comes to film is copyright. That's actually a pretty big topic, so I'm going to do a whole other episode on that. But as a general rule, you can't just copyright an idea. (I mean you can look this up) But the person who actually creates the thing is the one who owns it unless otherwise contracted. So if you try to use something someone else made without their permission, that's called stealing and you can get in a lot of trouble. You also can't sell a film or get a distributor on board or anything like that without putting them in legal risk and committing perjury or fraud by falsely signing the required contracts, testifying that you own the rights to something that you don't. So as a filmmaker, just make absolutely sure you get the rights turned over to you for all the work that's done for you. And as a creator don't let anyone steal your work! More on that later, stay tuned for our next episode when I go into this a little bit more.


All right that's it for now. Remember, none of this is actual legal advice, it's just suggestions, I'm not a lawyer. If you have any questions, talk to an actual lawyer, and get actual legal advice. Cannot stress that enough. This is just friendly advice to not let yourself get screwed over by being given a bad contract. and don't be a terrible person by trying to get away with a bad contract. End PSA.


Anyway, do you have any questions you'd like to hear covered in future episodes? Feel free to contact us at filmmakingactually (at) gmail.com also be sure to like our podcast! Subscribe and share with your friends blah blah blah all of that stuff. All right bye!


You've been listening to “Filmmaking Actually” with Koura Linda, Space Dream Productions podcast. Subscribe to us on any or all the podcast platforms, but we especially recommend our sponsor anchor! If you like what you hear, leave us five star ratings and positive reviews on itunes and Stitcher. It helps more listeners like you discover the show. But the best thing you can do if you really like the show, is tell a friend. Want to leave a comment or ask a question? Email at filmmakingactually (at) gmail.com. This is Spacey speaking, and remember there's two kinds of lawyers: Those who know the law and those who know the judge. And we'll see you next time




 


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