Nevertheless, there are situations where a purchase contract can be valuable. If the producer is well established, with strong relationships and demonstrated ability to implement projects, the risk could be worth it. On the other hand, in a purchase agreement, the author reserves the exclusive right to accept or disapprove. That means they could sell it to someone else. The producer can make a solid offer to the author, but the author can veto it because he does not like the company, because they support themselves for an unrealistic amount of money or simply because they no longer like the producer. During the duration of the purchase agreement, the manufacturer has the right – and is generally contractually binding – to leave the property to potential buyers or financiers in order to pass it through the development and production pipeline. If the manufacturer is successful and a buyer or financier shows an interest in the property, a sales contract allows the owner and producer to negotiate and enter into separate agreements on the project with the interested party. The owner negotiates the sale of rights to the property while the manufacturer negotiates its attachment to the project. Another pitfall of the purchase contract for the manufacturer is the important distinction between a property right and a contractual right.
As part of an option agreement, the manufacturer is given the exclusive option to acquire the image and television rights to the property for the specified period of time and, therefore, exclusive control of those rights during that period. No one can bypass them during the option – not even a large studio. On the other hand, as part of a shopping agreement, the author retains full control and ownership of the rights at all times. The manufacturer is only granted the contractual right to purchase the property from selected buyers. Admittedly, the purchase agreement generally provides that the author does not contract with a company purchased by the manufacturer during the life of the manufacturer (and sometimes thereafter, to the extent described above), unless the producer is mandated by that company as the producer of the project. But in reality, if the writer becomes dissatisfied with the producer and decides to go back and sell the rights himself, it will be very difficult for the producer to stop the resulting sale. Their only recourse will generally be a costly and time-consuming breach of contractual remedies. A purchase agreement or “producer purchase agreement” allows a producer or author to purchase a film or television project exclusively for financial organizations such as studios, networks and production companies for a specified period of time. As noted above, the sale agreement generally provides that the author retains 100% of the ownership of all property rights, unless he enters into a development contract with a buyer.Back to Blog