- Anamika Jha
- 10 September 2020
Planning to sign an agreement? Read this.
The most basic clauses to look out for in contracts
You might have faced challenges in reviewing and negotiating your contract with production houses and other entities. In this article, I am giving you few simple tips to review a contract that you might be intending to sign.
Let’s imagine a typical scenario before we move to the tips. Maya is a first time writer. She is extremely happy that a big production house is willing to buy her script. They have offered her adequate monetary compensation. Suddenly, her email pops! Hurray! She has received an email from the legal department of the production house with her contract. She opens the email with a big smile. However, her smile fades the moment she opens the attachment. It is a complex document. She does not know how to review it! She is totally confused! I think some of you have faced the situation that Maya is facing right now.
Contracts in general are complicated documents. However, please note that it is the most crucial document. If you sign a bad contract, your dream project may turn into a nightmare! Therefore, I have decided to bring these simple tips for you to review an agreement. Please do not sign any contract before thoroughly reading and understanding every clause of the agreement. However, be highly attentive in the case of the following clauses;
a) Nature of Agreement
As far as possible, insist on signing a ‘copyright assignment agreement’ agreement rather than a ‘work-for-hire’ agreement, particularly in case you have approached the producer with your script/bible. In the work for hire agreement, the producer shall be the first owner of the work. Hence, such an agreement should be signed only in the case of commissioned work. However, in the case of an assignment agreement, a writer is an author and first owner of the work. Further, try to enter into a contract as soon as the negotiation is closed, and before you have started working on the project. Do not forget to keep an original copy of the Agreement with you for future reference.
Always make sure that the amount of consideration is given in the draft and also broken down in various stages/ tranches. Try to avoid the one-time bulk payment that shall be made once the work is completed. Please ensure you are paid your fee in installment, every time you complete one step of the project. This would guarantee that even if the contract is terminated abruptly, you will at least be paid compensation due to you till the stage of such termination. Further, as much as possible, try to negotiate the consideration as per the ‘Basic Remuneration Slab’ given on the SWA website.
c) Right in the work to revert
Please note that Section 19(4) of the Copyright Act, 1957 gives you the right to have the copyright in your work revert back to you. This applies in the case when the producer does not exercise the rights assigned to it within a year of the assignment. You should observe whether your contract requires you to waive your right under Section 19(4) of the Copyright Act. If yes, please ensure that there is at least a clause in your agreement which gives you the right to buy back your work if the producer fails to utilize your work for a specific period. Otherwise, your work shall be struck in the production house for an infinite period.
Ensure that you receive your due credit for the work done by you. Please make sure that the credit clause survives the termination of your agreement. That means, even if the agreement is terminated by either of the parties, you shall still be credited for your work. The logic behind this is simple. If someone has used your work they have to give you due credit!
Make sure that your contract addresses the percentage of royalty due to you for your copyrighted work. Your royalty is separate from the consideration (the fee for your service). Please note that any clause which states that royalty is included in the consideration is not valid.
f) Rights assignment
Please assure that your contract explicitly mentions and lists down the particular rights which are being assigned to the producer. Please avoid the clause that merely states ‘all rights.’ If possible, never waive your moral right. Read my article regarding moral rights and economical rights for better understanding.: (https://www.attorneyforcreators.com/post/hey-artist-does-the-difference-between-economic-rights-and-moral-rights-confuse-you)
g) SWA/trade union Jurisdiction
Do ensure that the jurisdiction of SWA/trade union is not excluded from the contract. Hence, in case of any dispute, you may approach SWA for mediation.
h) Arbitrary Termination
Ensure that in your agreement there is no arbitrary and one-sided termination clause in your agreement. An agreement should be terminated only if there is a default of either party. Those defaults should be specified in the contract, together with the rights and obligations of either party on termination.
These are only the basic clauses that one needs to look out for in the contract. However, you should read all clauses of the agreement multiple times before you sign the same.
Legal Officer, SWA | Anamika Jha's area of specialization is Intellectual Property Law including Copyright Law and Media & Entertainment Law, while her passion is serving the Creators. She has both litigation and Corporate experience. Blog link: https://www.attorneyforcreators.com/