Steve’s Lawyers Corner
Can you please sign this deal memo?
I am continually asked by my independent film production and crew clients to draft a quick “deal memo” for a production, thinking that this is the only agreement that is needed for the cast and crew for their entire project. Actually, most of them just ask me if it’s okay for them to just draft it themselves, using as a form from a prior production. And, of course my answer is “if you want to tempt the gods of film, then you can draft it. Otherwise, NO!”
The actual term “memo” seems to have acquired a rather informal meaning over the years. It’s just like two people who meet in a restaurant and decide to produce a movie and the napkin becomes the “memo” of their meeting. When I ask my clients if they intended for the napkin and its notes to be official, enforceable and hence, legal, they just give me a questioning look. They have no real idea.
I then remind them of the fact that anything (yes, including the napkin!) that is intended to be an agreement between two or more people can and usually will constitute a contract if it meets the elements of a contract. If it is a contract, it is then legally binding. It would seem rather silly to go into court with nothing more than a napkin as the primary evidence and win the case, but more ridiculous things have happened.
So, if we now know that “deal memos” can be construed to be enforceable contracts between the parties, how should you treat them? Well, to start with, the deal memo must describe the tasks of each party. Who does what, when and for how much? If we are going to consider a deal memo as a contract, then we need to put as much detail into each item as is possible. What are these tasks? Independent Contractor versus Employee? When should they be performed? Where should they be performed? What are the start and stop dates of the tasks? How much will you be paid for your work? Are you being asked to defer any of your payment until a later date? How will they transport you from point A to point B? How often do they feed you? Do they pay overtime after a normal working day? And, if so, how much? And so on. Always try your best to be as specific as possible.
One of the things that is frequently left out of a home grown deal memo is the names of the parties. Who is contracting with whom? Never leave this information out as you will only be left with a dirty napkin and a hard time making the information “stick” legally speaking. Make sure that you include addresses (physical addresses), phone numbers, email addresses and all other identifying information. If you haven’t gotten the message yet, a contract must be specific in its terms in order to be legally enforceable. If it isn’t, then few courts will fill in the terms for the parties.
By the way, if you are dealing with a producer or production company that is at all shady, they will not want to give you any of that information for fear that you can then track them down when they don’t pay you what they owe you. Tell them that you cannot sign this document without all of the specific identifying information. And, better yet is that you can’t sign anything until your lawyer reviews the paperwork.
If you are using an old “deal memo” from another project (which you should NEVER do) I would urge you to exercise special care with the language. And, as with most documents involved in the production of a motion picture, they should be prepared by an experienced entertainment attorney for your protection and only for your specific project. This is possibly the worst area in which to save money out of the entire production budget.
Another hint of instability is that the name of the production company is the LLC or corporation that is formed for the sole purpose of producing this project. If you don’t know the people on the other side of the transaction, then I would urge you to do more due diligence on who they are before you sign anything. We have all had the experience of working with someone who allegedly had their funding in place only to have them disappear in the night without paying anyone.
And, as an additional point, I would only agree to a payment schedule to the crew members on a very frequent basis. Weekly, or every two weeks at most would be ideal. Any longer than that for payment tells you that they really don’t have any money. Run, don’t walk away!
The best advice in regards to deal memos, then, is to exercise a great amount of caution in preparing them, reviewing them, and in signing them. It’s always best to have someone with experience work on your behalf to ensure that the document is fair and enforceable.
The Replin Law Group, LLC