Understanding Your Screenplay Purchase Agreement

If you’re a screenwriter or filmmaker, there’s a pretty good chance that at some point you’re going to face the opportunity either to sell, or to purchase, a screenplay. In fact, the screenplay represents one of the most important elements to producing a motion picture. Without it, you don’t have much of a story nor will you have rights to your concept. Selling or purchasing a screenplay is an incredible opportunity. The steps you take in understanding your screenplay purchase agreement now will play a key role in establishing a smooth and easy transaction.

What is a Screenplay Purchase Agreement?

The screenplay purchase agreement, sometimes referred to as a literary purchase agreement, represents a full sale of rights to a screenplay in which the screenwriter releases their ownership exclusively to a production company, studio, or other entity.

Unlike option agreements, which can be negotiated to provide the production company certain options to use the screenplay without fully relinquishing control and 100% of ownership to the production company, a screenplay purchase agreement is an outright sale.

Under a screenplay purchase agreement

The production company or studio agrees to pay the screenwriter a set sum for their rights to the screenplay. While the total payment for a screenplay could be quite high, the purchase price is rarely fulfilled in a single installment.

Most studios or production companies will pay out purchase agreements over a period of time with installments. All of these details will be included in the screenplay purchase agreement. 

What’s Included in a Screenplay Purchase Agreement?

Your screenplay purchase agreement represents a contract between yourself and the screenplay writer. The contract lays out the options and actual parameters around the sale of rights to the screenplay or literary property.

Generally, these agreements are written by a lawyer that specializes in the entertainment industry.

The agreement will include the following details:

• An introduction to the screenplay with a brief description.
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• A list of the rights that are to be granted with the purchase. 
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• A list of any rights that are explicitly NOT granted with the agreement.
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• An extension of rights granted with the purchase to include licenses and privileges of the property.
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• Detailed release to make changes to the screenplay without seeking writer permission.
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• The amount being paid by the studio to purchase the screenplay.
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• A representation and warranties clause.
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• Release of copyright allowing the new production company or studio to create a film or other content with the script.
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• Credit rights or obligations that were negotiated along with the purchase.
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• The right of first negotiation allows the script owner rights to purchase back if the buyer ever decides to sell.
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• Additional documentation that includes details on any further negotiations that were made between the screenplay purchaser and the production company. 

In Summary

As you can see, understanding your screenplay purchase agreement is an important task that you simply cannot afford to overlook.

Make sure that you also have your legal counsel review before you make any final decisions to purchase the screenplay this way you’ll benefit from full disclosure and have a higher chance of protection.