Representations & Warranties

In my last post about sterile scripts, I mentioned that it’s a violation of your representations and warranties if you option a sterile script that somebody else owns. But what exactly are reps and warranties?

In short, they’re guarantees that you make to the company purchasing your material. In most cases, reps and warranties include assertions that:

• You are the sole owner of the rights you’re optioning or selling
• The work is not based on anyone else’s protected intellectual property
• The work has not been previously exploited in that medium
• None of the rights are encumbered or hindered in any way
• To the best of your knowledge, exploiting the rights won’t infringe on anyone else’s property or rights
• You have not and will not do anything to interfere with the company’s use of the rights
• There are no other agreements or documents related to the rights to which you are a party
• There are no pending claims or litigation that could affect the rights

Let’s take a look at each of those in more depth.

Being the sole owner of the rights you’re optioning or selling means that no one else can claim ownership of the work – no producers, writing partners, authors of underlying material, etc. If you co-wrote the script with someone, both of you should be parties to the option agreement, or you should have an agreement between you and your co-writer where the rights have all been transferred to you and/or you’ve been given sole authority to represent and control the rights you both share.

The work not being based on anyone else’s protected IP means that the work is 100% yours, has been taken from sources in the public domain, or has been taken from rights which you’ve acquired. In essence, you’re guaranteeing them that you didn’t plagiarize anything or borrow from any sources that would require them to obtain someone else’s rights.

The work not being previously exploited in that medium means that you haven’t previously sold the work to be made as the same kind of thing you’re selling it for now. For example, your script hasn’t previously been produced as a movie, your book hasn’t been previously published, etc.

None of the rights being encumbered or hindered means that you don’t have any baggage you’re bringing into the situation, such as a restriction on how the rights can be exploited. It’s important to note that this doesn’t necessarily mean you can’t have previously exploited anything at all… just that the rights you’re giving don’t have any hidden pitfalls that will keep the company from making full use of them.

An example of where this is typically okay is if you previously licensed, say, the ability to produce a theatrical (stage) production of the work to someone, and have notified the company in advance of that fact. In that case, the negotiation would either make stage productions a reserved right that isn’t assigned to the company, or would specifically exclude stage productions from the grant of rights you’re giving to the company. The important part is that you’ve notified the company so that somewhere in your agreement, it addresses the thing you previously licensed so no one makes the mistake of thinking it’s okay for the company to mount their own stage production.

An example of where this is typically not okay is the same scenario above, but where you didn’t notify the company… because in that case, the company assumes they can produce a stage version and may even spend money to make it happen, only to realize that someone else actually previously acquired those rights.

It’s very important to make sure that a company is fully aware of any restrictions you’re carrying for your rights. It’s a violation of your reps and warranties (and therefore a breach of your agreement) if you don’t notify them.

Exploiting the rights won’t infringe on anyone else’s rights means that you haven’t borrowed anything from anyone else’s established IP. For example, you didn’t adapt a work for which you don’t own the underlying rights, you didn’t previously sell the property to someone else, etc.

Not doing anything to interfere with the company’s use of the rights means that you have not and will not do anything that could jeopardize the rights, such as subsequently sell the same rights to someone else, filing a claim against the company related to the rights, challenge the validity of the company’s claims to the rights, etc.

No other agreements and documents means, like the above section about the rights not being otherwise encumbered or hindered, that there’s nothing in the project’s past that you’re keeping from the company. This doesn’t mean you can’t ever have made a deal for the project before or that you have to disclose every expired option agreement you’ve ever signed; it simply means that there’s no other operating documents or agreements floating out there that you haven’t already brought to their attention.

This is an important one for writers who have worked on the project with multiple other parties (co-writers, producers, other companies, etc.). You need to be absolutely sure that the agreements are not operative, otherwise you should disclose them to the company prior to signing the agreement.

No other pending claims or litigation means that there are no active or impending legal claims against the property. No one’s suing you for infringement, claiming a portion of ownership, etc.

The specific language of a representations and warranties clause in a contract will vary from company to company, and even from agreement to agreement. The above are just the most common types of things generally included in this section of a contract.

The bottom line with reps and warranties is to make sure you know what you’re agreeing to, so you’re not in breach of your agreement by doing something or having something in your past pop up.

If you had a falling out with a co-writer or a previous company/producer, make sure you have something in writing that clarifies the relationship has been severed.

If you previously optioned the work to someone, make sure that agreement is no longer in effect and you are 100% free of that agreement’s obligations.

If you based your work on an idea or story or character that’s not fully owned by you, make sure you either secure those rights or notify the company in the course of negotiations.

And, most importantly of all, make sure the reps and warranties you’re being asked to sign seem acceptable and reasonable. If you’re being asked to represent and warrant something onerous, don’t sign the agreement until you get it sorted out, because these reps and warranties are what the company will expect you to uphold in order to get paid.