Each deal is different, but if the producer has a solid success in making projects, then an author might want to give the producer some free buying time. Of course, typical modern option agreements are more complex than the simple example above and include extensions, writing service add-ons, etc., but you get the picture. Peter is certain that the property may be for a price he has pre-negotiated, and it cannot be bypassed for at least a year. So, as a producer, he`s on a pretty solid foundation. There is no money exchanged in a purchase agreement, as is the case in an option agreement. This is a great advantage for the producer. It does not need to spend development funds to establish dramatic rights. He receives a short time window (usually 6-9 months) for free to get a potential deal. In the first case of the option fee payment, the copyright will be re-returned if the manufacturer does not obtain the desired sales rates within the expected time frame. As part of an option agreement, the purchase price, backend compensation, passive royalties and other conditions for the sale of the property by the author are agreed in advance by the author and producer.
The term in a purchase contract is for a short period of time. If the producer cannot deliver, the author can move on to another potential deal. But if the manufacturer is widely used with the project, the likelihood of other possibilities can be greatly reduced. And the duration of the contract could end, and they could sell it without you! Unlike an option agreement, a sales contract does not confer rights on the property itself. In this regard, a purchase agreement is in principle a service agreement and not an agreement to acquire property rights. In the absence of property rights, a sales contract of the owner is easier to violate and therefore gives less protection to the manufacturer. One owner could go behind the producer`s back and sell the rights to another party. The producer would not resort to an infringement application. Conversely, as part of an option agreement, the builder has acquired a stake in the property that will not be returned to the owner until after the option has expired. If the owner wishes to sell or option the same interest in the property, another buyer would expect that the interest to be purchased would be legally free and that no other person would own property on the property.
An option is made with money paid in advance to the copyright holder. Unlike an option, the copyright holder makes the sales contract in the sales contract if the producer finds a studio, network or production company that wants to buy the property. The long road to putting a piece of intellectual property (IP) on the screen often begins from a legal point of view with the safeguarding of the rights to develop and manufacture the material. Traditionally, the holder of a script, format or other IP object and a manufacturer enter into an option agreement under which the manufacturer pays an initial option fee for the exclusive right to acquire the property within a specified time frame. This window is intended to allow the manufacturer to launch the project. There is no doubt that the biggest difference between the option agreement and the purchase agreement and the biggest pitfall of the purchase contract for the manufacturer lies in the author`s power to approve the terms of the sale of the property. As part of an option agreement, the purchase price, backend compensation, passive royalties and other conditions for the sale of the property by the author are agreed in advance by the author and producer. The manufacturer (or agent) may use its option at any time during the option period and acquire the image and television rights to the property by simply paying the agreed purchase price.