Entertainment Law Tip – Beware Exhibit A

I review and/or draft entertainment contracts every day, but it never ceases to amaze me how “less important” contract terms can be to the person reading that contract when the terms are simply put in the back of a contract as “Exhibit A” a/k/a “Schedule A.”  (pssst.  The letter “A” is unimportant – could be any letter on the Exhibit, this is just the example)

Let me make two points here —

(1)  First, the fact that terms, conditions or the defined terms are put in the back of the contract on Exhibit A in and of itself has ZERO legal significance.  Whether those terms are in the opening paragraph, or in six-point fine print on page 500 of Schedule H written in ketchup  … they are enforceable contract terms. Period.  New lawyers sometimes gloss over contract exhibits at the end or sometimes skip them entirely in the review. Legally speaking, you would be safer running through a minefield in Cambodia wearing a blindfold and snowshoes.

(2) Second — if a contract refers to Exhibit A, and references “a future agreement” — something like this —

6.7  The terms regarding the Parties ownership in the new Production Company  shall be regulated by a share-holders agreement with the key terms specified in Exhibit A.

… then those terms and conditions better be attached to that contract as Exhibit A — because if they are not, you have no absolutely idea what contract you are signing.  Read that twice.

If the terms are not attached, get them in your hands, review them thoroughly, and make them part of the contract.  If you’re going to take someone’s word that the Exhibit A just contains “standard” terms, and you shouldn’t worry about them, I would like to sell you a bridge or twenty. Point of fact, there is no such thing in Hollywood or anywhere else in the entertainment world as a “standard” contract. If you let this issue go and sign the contract anyway, you are signing blind and you have no idea how those terms and conditions that you have not seen might negatively impact the contract you think you are signing.

Food for thought, no?

Thanks for reading,

Lee Rudnicki, Esq.

http://www.drumlaw80.com

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