Conditions precedent

At the very beginning of most entertainment contracts, there’s an important section called the conditions precedent. It tends to get overlooked because there are way more interesting sections like the compensation, credit, and perks like premiere tickets, but the conditions precedent is a critical area that shouldn’t be ignored.

Conditions precedent, in layman’s terms, are the requirements that need to be satisfied in order for the company to be obligated to fulfill its side of the agreement. In most cases, the conditions precedent will more or less be along the following lines:

  • Delivery of a signed copy of the agreement
  • Delivery of any required start paperwork (tax documents, payroll start forms, etc.)
  • Delivery of any additional documents that may be needed
  • Approval of the chain of title (if the agreement includes the purchase of rights)

The first three are fairly self-explanatory; the company needs copies of the signed agreement and the paperwork to verify your employment eligibility, get your information into their accounting or payroll system, and ensure that they have everything they need in order to process payment and move forward with the project.

The last one (approval of the chain of title) is a little more complicated, but you typically only run into that condition when you’re selling a script as opposed to being hired to perform writing services. Chain of title is a process by which a company verifies all the correct rights to the project have been acquired.

If you’re selling an original screenplay, the chain of title is short and simple: you own the script and you’re selling it to them.

If you’re working on a project with a long history, though, that chain of title is considerably longer and more complex. For example, if you’re being hired to write a draft of a new Mission: Impossible movie, the chain of title will have to be traced all the way back to the original 1960s television series, and through each change of ownership over the decades since, so the company can confirm with absolute certainty that they control one hundred percent of the rights necessary to make the movie. It’s important to note, though, that larger chain of title concerns outside the rights to your specific script should generally not be a conditions precedent of your writing deal.

Where this concerns writers is that the company isn’t required to fulfill any of its obligations to you until all of the conditions precedent are satisfied. Which means that they technically don’t have to pay you, or start the option period, or reimburse you for travel and expenses, or do anything else pursuant to the contract until those conditions are satisfied.

It’s crucial to keep track of what the conditions precedent are to your deal being in effect, so that you can address potential delays and ensure that you’re not holding anything up yourself. I’ve worked with a lot of writers who ended up not getting paid for weeks or even months because they hadn’t provided the company with a key piece of information or tax document required in order to get paid.

You also want to make sure there’s nothing in the conditions precedent that is unrealistic, unfair, or unusual. Conditions precedent should be purely about getting your deal and the particulars of the writing squared away; be very careful of any extraneous conditions like production milestones, or financing, or approval of the chain of title for the whole project, or things of that nature. The company’s obligation to hold up their end of the deal with you shouldn’t be conditioned upon factors outside your control.

At this point, I should mention that this is really just a formality for a lot of situations; as long as the company has everything they need to process the payment, a lot of them won’t stand on ceremony and refuse to pay just because the attorneys are taking a while to negotiate the details of the agreement. If you close the material terms of the deal, send in your start paperwork, and are formally commenced by the company, in most cases it’s understood that the payment shouldn’t be held up because the signature of the agreement condition hasn’t been met.

However, you should still keep a close eye on what your conditions are, because the letter of the contract is what will be relied upon in the event of a dispute.

As long as everyone’s getting along, there should be no need for concern about the conditions precedent. But if a company starts using the conditions precedent as a basis for refusing to pay or honor their other obligations, you should be aware of what those conditions are and what’s in your power to correct.

If it’s just a matter of signing something or filling out a form, you can resolve the issue easily.

And if it’s a matter of something more complex like a tricky chain of title, you or your reps should be paying close attention so that you’re not expected to move forward while they’re in a holding pattern.

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