Defining and Creating a Production Agreement Contract Template

Production Agreement: What is it?

A production agreement is a legally binding agreement that spells out exactly what goods or services are to be produced for a director, producer, or other client. In the world of film production, television production, and theater, a production agreement lays out in detail the expectations for cameras, musical equipment, props, lighting, make-up, and any other "production" needs. In the world of manufacturing and modern assembly, production agreements are found everywhere in modern industry . From installing machinery in a factory to manufacturing windows for a high-rise apartment building project, a fit-for-purpose production agreement establishes the many details that go into getting a client ready to go live with their new equipment, hardware, software, tools, or even raw materials.
The purpose of having a production agreement in place is to:
Production agreements take many forms depending on the area of industry covered. In the film industry, a production agreement can lay out the production timelines and schedules. In manufacturing, a production agreement may contain milestones to hit in order to fulfill a particular section of the contract.

Key Components of a Production Enterprise Agreement

A comprehensive production agreement is essential for any successful television or film project, ensuring that all parties are on the same page before work begins. The most critical elements of a production agreement should include:
Parties
This section determines who is participating in the project. The list of parties will vary by project, but the producer, director, studio and performer must be included at the very least. It is standard to expect that directors, producers and actors will have a contract for every project they work on. The contract may also include studios, distribution companies and other entities involved with the production.
Terms and conditions
This section determines when the contract begins and ends. Many contracts will cover a 12-month period, which is appropriate for most productions. However, in certain cases (such as television movies or series), the contract may end before the project is complete.
Deliverables
The producer must indicate the scope of the project in the deliverables section. This includes what is being delivered, the length of the production, the format and the number of copies. For example, for theatrical releases, they may agree to a 35 mm negative print while for television productions, they could contract to a digital tape. Distributors may have specific criteria for deliverables so it pays to review their policies beforehand. The producer should give their distributor a copy of the production agreement so that everyone is on the same page.
Timelines
Often concurrent with the deliverables section, it’s vital to include a timeline for production in order to meet deadlines. It also determines when payments are to be made. If you miss subsequent payments it could put you in breach of contract, even if the parties have successfully completed the previous stages of production.
Compensation
The contract should include how and when the cast and crew are to be paid. Generally, the cast and crew are paid before the producer is and since payment is due within 10 to 15 days of invoicing, the timing of completion is critical.

Production Template Contract Benefits

Having a template allows you to ensure that the parties have agreed and approved everything relevant to the agreement. Additionally, it addresses contingencies that may come up on a production (such as an actor or an entire crew bailing on a project at the last minute). A contract template includes a scope of services, which protects you from liability as the production company. It provides protections for the production as well as the individuals involved. For instance, if an actor gets injured on set or if someone gets sued for something they did at the behest of the production company, the production would be protected and the actor would have to protect themselves because the contract would indemnify the production in the event of lawsuits against the actor.

Creating Your Own Production Template Agreement

Every production agreement must be specific to the needs of the particular production. A template agreement must be tailored to the project based on the answers to the following questions: Is your project for television, film or digital distribution? Is it a low or high budget? Will the underlying material in your project stay under your ownership or be assigned to someone else? Are foreign and domestic rights to be contracted separately? Are there any unique relationships among the various parties involved? Do you have special intellectual property considerations such as the use of prior works? What representations and warranties do you need? How will disputes be handled (i.e. arbitration, mediation, court trial, etc.)? I could add to this list endlessly, but you get the idea – there are many variables to consider that could affect your production agreement contract template.

Pitfalls to Avoid

Challenges and How to Prevent Them
When crafting a production agreement contract template, many challenges can arise. One common issue is the definition of roles and responsibilities within a project. It is important to ensure that each party involved in the project clearly understands their duties and the extent of their authority. This can sometimes lead to confusion and disputes later on if not explicitly defined in the agreement.
One way to avoid this challenge is to be as specific as possible in the role definition section of your production agreement contract template. Each party should have clear tasks outlined, whether they be involved in the writing, producing, directing, or any other area of production. Listing very specific requirements for each position can help prevent disagreements over roles. For example, if the production requires a location scout to find filming spots, this can be explicitly outlined as a task for the production manager or line producer.
Another common challenge when it comes to production agreements is establishing clear guidelines regarding compensation and payment schedules. Sometimes the production agreement will define payment as "upon receipt of grant funding" or "net receipts," which can delay payment and lead to complications with contractors and suppliers. To avoid any confusion, you should define the payment process in detail, including when payments will be made and any milestones or delivery schedules that must be met in order to trigger payment.
In addition, there can be issues when trying to get everyone involved to sign the agreement . It can be tricky to get fifty people to sign an agreement quickly or to keep everyone’s signature up to date if you have to correct spelling errors and other mistakes. Once you have everyone’s signed copy of the updated agreement, you’ll need to keep it in a secure file such as a password-protected database, which is also subject to various security threats. Therefore, if you don’t want to spend a lot of money to employ a company to manage your entire database and signature collection, then make sure that you have a special software program in place to automatically email the next person on the list that requires a signature for a particular document. The program will send out an email alerting them to the virtual signing cabinet where they can read the document and sign the electronic document with a password and valid email address. This process can drastically reduce human error in chain-of-signature addressing.
Finally, one common challenge in production agreements is file organization. Keeping track of all the paperwork relating to a production agreement can be overwhelming. Whether paper or electronic, ensuring that everything is filed in the appropriate location helps locate documents when needed later on in the project. In addition to routine filing and regular physical and electronic cleaning, organizing everything right from the start can prevent headaches later down the road.
When formatting your production agreement contract template, details really do matter. Ensuring that you have considered these common challenges and their solutions can help create a streamlined process in the lead up to production.

Legal Matters Related to a Production Agreement

When drafting a production agreement, there are several important legal considerations to take into account. It is vital to ensure that both the document and any relationships contemplated by it comply with applicable law, that the contract is enforceable, and any potential liabilities are accounted for.
Take stock of any obligations you have in the industry and within your company to ensure compliance with applicable laws. You should base your production agreement in a way that follows industry standards, unless you are intentionally making an exception. You can explain the departure from normal practice in footnotes or an introduction as needed.
Once the document is written, review it to ensure that it is legally binding. You should avoid language that promises to sell or buy future goods and services unless you have already agreed on a price. Use the word "shall" to indicate mandatory requirements rather than "should," which implies optionality. Be cautious about using words such as "reasonable," since they can be subjectively interpreted. Make sure that the parties to the agreement are clearly defined, as well as any outside parties you may want to involve.
Consider whether there are any additional legal protections you should write into the agreement, such as arbitration clauses or any liability waivers. If you are working with a potentially litigious party, include a dispute resolution provision as well as a choice of law clause so you can get clarity on which laws should apply if the issue cannot be solved internally. It is tempting to keep the template simple for ease of use, but if you foresee any special cases, be sure to handle them in the template so they don’t become problematic when you focus on other aspects of the organization.

Finalizing and Signing the Contract

The process of finalizing and executing a production agreement template involves carefully reviewing its content, ensuring that all parties agree to its terms, and then securely archiving the contract for future reference. The first step in the process is to conduct reviews of the contract. While there should already have been input from all parties during the drafting stage, it is still essential to have all stakeholders review the finalized version of the agreement. In addition to checking for accuracy, the time taken for colleagues to assess the contract can help ensure that any potential concerns are raised before the contract is signed.
Once all parties have reviewed the contract and any necessary changes have been made, it is time to seek mutual consent. Not only is it important for the sake of maintaining a positive working relationship with stakeholders, but consent is also an essential element of a binding contract. Consent can be gained through signatures, and often this is how contract finalization is achieved, both for the sake of practicality as well as the fact that having physical copies of the contract signed by all parties may be required by state laws . The removal of paper copies is not limited to signed contracts; every copy of a contract that is created is considered another version of the file. For example, if you have a contract with a two different labeling layouts, different font choices, and even differing margins, these differences create multiple versions of the same contract. It is therefore a good idea to keep track of the number of versions of contracts that are created. Choose a consistent naming system, and make sure that each version is numbered in order, and the contract version number is beginning from the date of creation. This can help to minimize confusion down the line.
Note that while consultations might have taken place throughout the drafting stage, it is always good to have a more formal meeting as a means of bringing all parties together to discuss and finalize changes. When conducting a contract execution meeting, it is a good idea to consider the following steps: It’s important that you roll out a production contract agreement template and receive feedback before you execute the approved document.