As a result, warranty and indemnification issues are less clearly defined in purchase agreements, as the manufacturer only legally controls the rights in an option agreement. It is important that a purchase contract defines a clause so that an author does not support the legal obligations of the manufacturer and vice versa. Under an option agreement, the purchase price, back-end remuneration, passive royalties and other conditions relating to the sale of the property by the author are agreed in advance by the author and the producer. If you`re in the game, you`ve probably discussed option agreements and purchase agreements at some point during your author`s trip. Shopping deals, also known as “free options” in the language of the industry, are exactly as follows. As a rule, an experienced producer takes over the rights to the project for a certain period of time, as for a standard option, with the usual difference that the author earns more in case of sale, due to lack of deposit. In the comments, let`s see what you think of shopping deals and give any tips the community might find useful in your opinion. A purchase contract often gives little (or no compensation) to the author. This is the compromise between flexibility and increased participation of authors. Before signing such agreements, a producer should have a plan for the financiers and talent he will turn to.
Since there is no payment to the author, the duration of the purchase agreement is usually shorter than an option agreement – usually only six to nine months. Unlike an option agreement, the trade agreement generally does not give the manufacturer the unilateral right to extend this term. While this short-term delay benefits the author, it can be a potential trap for the producer who, over the lifetime, can lay the groundwork for an agreement with a production company only to be cut by the author after the expiration of the term.