– Use a business model for your purchase agreement. Who has experience with purchase contracts? What interests me is how effective they can be, and whether they tend to represent better later in the game. – Tell them what they will do specifically with your script under an SA, z.B. Pitch`s in Cannes, AFM, etc. The quality of your strategy will tell you most of what you need to know about the value of the purchase contract. For a manufacturer, a purchase contract is an attractive approach to engage in the project for free, while a producer must make an initial effort to acquire the option right as part of an option agreement. In this regard, the producer avoids the risk of a pre-investment during the investigation period, which ultimately cannot be successfully carried out during the sale or production. Similarly, the manufacturer probably does not have “skin in play” without prior compensation from the producer. They may be less invested in the implementation of the project and can concentrate their energies elsewhere, as no financial investment is at stake.
The long road to putting a piece of intellectual property (IP) on the screen often begins from a legal point of view with the safeguarding of the rights to develop and manufacture the material. Traditionally, the holder of a script, format or other IP object and a manufacturer enter into an option agreement under which the manufacturer pays an initial option fee for the exclusive right to acquire the property within a specified time frame. This window is intended to allow the manufacturer to launch the project. They do not legally expose themselves. Unless, unlike most shopping deals, you can`t always market your script. You may have the first right of refusal, but who cares as long as you find a home for it? There is no doubt that the biggest difference between the option agreement and the purchase agreement and the biggest pitfall of the purchase contract for the manufacturer lies in the author`s power to approve the terms of the sale of the property. As part of an option agreement, the purchase price, backend compensation, passive royalties and other conditions for the sale of the property by the author are agreed in advance by the author and producer. The manufacturer (or agent) may use its option at any time during the option period and acquire the image and television rights to the property by simply paying the agreed purchase price. The writer cannot change his mind or refuse to approve it. On the other hand, under the purchase agreement, the author reserves the exclusive right to approve or disapprove of any potential agreement for the sale of the property that the producer presents to him, usually at his sole discretion.