A purchase agreement is an agreement between the IP owner and a manufacturer. As part of a purchase agreement, the manufacturer obtains the right from the owner to purchase the property for a specified period of time for studios, networks, distributors, financiers and other potential buyers or supporters. As a general rule, the owner does not receive payment from the manufacturer for the right to purchase the property. On the contrary, the owner benefits from a producer who uses his network, his track record and his sales experience in the field of pitching. Although many producers and studios still have option rights, more and more independent producers have turned to the Shopping Agreement, which offers them a simple and free alternative to an option to obtain the exclusive right to purchase a script, book, TV series format or other real estate. Although this kind of contract is not new to Hollywood, it has become much more common. As a general rule, as part of a shopping contract, the producer simply promises to use his best efforts (or even in good faith) to get a proposal from a studio, network or other production company for a property development contract. In return, the author grants the manufacturer the exclusive right, for a limited period, to „buy“ the property from selected potential buyers. If the manufacturer breaks down, nothing will be lost and the parts followed separate paths. If the manufacturer receives an attractive offer from a buyer and the author wishes to negotiate with that buyer, the producer will be attached to the project and the author and producer will negotiate separately their respective rights and producer contracts with that buyer. When they enter into agreements with the buyer, both receive their separate compensation to keep.
The manufacturer generally does not pay money under a purchase agreement. The producer`s promise to take advantage of her good efforts to obtain an offer of a development contract is usually the only sufficient consideration for the author`s right to purchase. This element of the shopping agreement of course benefits the producer, who is not obliged to spend her limited development funds as part of an option agreement. This is not a good thing for the writer, as much because he would normally be paid as part of an option agreement (and the money must be paid if the producer is the co-signer of the Writer`s Guild of America Basic Agreement) and because the producer probably does not have a „skin at stake“ under the trade agreement and may not be very invested in the project. Option agreements usually take longer (12-18 months) and the writer is generally not required to agree on the person the producer has added to your project. Do you have any idea how long it takes to hear about someone? Even if you are a producer with great contacts, unless you make a money offer of talent, it can take 2-3 months to listen back. And that`s just a little talent. A two-month option doesn`t do anything stupid. No offending guys, but if for the first time writers start formulating ridiculous demands – high money options, non-exclusivity, signing an NDA, option terms of less than 12 months – the producer will simply find a better story elsewhere with a writer who is not delusional.
A purchase or option contract will always be exclusive, or what is the interest? The shopping agreement generally allows the author to have more participation in the sale of the property than the option agreement, while the manufacturer will be subject to more restrictions. As a general rule, when an option agreement allows the manufacturer to purchase the property from a company that wishes to do so, the purchase agreement generally grants the author written permission as to where the manufacturer can deposit the property. This restriction allows the author to keep an eye on the producer`s activities and prevent the producer from making bad decisions (for example). B by presenting the author`s informative biopic about F. Scott Fitzgerald at the food chain). The Writer`s Guild of America Basic Agreement authorizes the limited purchase of material with restrictions, authorizes its member authors to purchase