bettybalin
The Shire
Feb 13 2008, 4:57pm
Views: 15316
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Obviously, none of us have seen these mythical contracts, so please take this with a grain of salt. However, even if the TE is owed the money, I rather doubt it will mean the rights will revert to TE.
Assignors (Zaentz) typically do not retain any contractual responsibilities over the assignees (NL). There would be no way to enforce them, and it would be a huge potential liability for the assignor. It would be like an apartment manager being responsible to make sure the tenant pays his utility bills, and if he doesn’t, the apartment manager loses the contract with the owner. Because if you have the responsibility to see that the payment is made, and the payment isn’t made, that means the money would have to come out of your own pocket. You would have the responsibility to audit books, monitor payments, etc. I can’t see Zaentz entering into such a poor, out of norm, contract, he seems like a very savvy entrepreneur.
In addition, if it were so easy to void a contract when the terms aren’t met, Zaentz would have voided the contract and regained the rights when NL didn’t pay him the amount he felt he was owed (edit to add: and he still hasn't been paid in full, apparently! If he's having problems seeing the books for his own payments, he certainly wouldn't be able to see the books to make sure TE gets it's full cut). Usually, failure to meet terms means a whopping great fine (or more likely, an out of court settlement), not rescission of the contract.
However, even if the TE’s legal arguments for the money they felt they are owed are made of string and wet macaroni, they are still capable of tying this up in court for years. Which I’m sure they know, and they know that NL will be motivated to settle quickly. NL isn’t going to relinquish their rights easily, regardless of fault, because after settling with PJ, losing the rights now would just be throwing good money after bad.
On an unrelated note, anyone have any experience with writers contracts? 7.5% of the gross seems awfully high to me, because that’s generally most of a films profit margin. It just seems like a huge cut for a supposed “poor” contract. However, I don’t have a personal experience with writers contracts, I’m just going off half-remembered articles from the trade magazines.
(This post was edited by bettybalin on Feb 13 2008, 5:06pm)
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