LEGAL EASE is FIND's weekly advice column on legal matters pertaining to the entertainment industry. If you have a question for our lawyers, Jesse and Matt, please send them to Carolyn at CCohagan@filmindependent.org

Q: Do all contracts have to be in writing?

A: I like you. No messing around, no background, just a short, straight-shootin’ question. Well, I’ve got a short, but not so straight-shootin’ answer: Not necessarily.

In fact, the majority of contracts that you deal with in your daily life are not in writing. Most are not even oral. Let’s say you rush to your local, mom-and-pop bookstore (e.g., Border’s or Barnes & Noble) to pick up the latest book in the Twilight series. You slide your money across the counter and rush out of the store, teen abstinence drama in hand, skipping with glee. A week later, when you’re only on page 68, an employee of Border’s shows up at your door and rips the book out of your hands. “We didn’t have a written contract so our transaction is invalid” she tells you, with bespectacled smugness. Can they do this?! Of course not. When you paid your money and they let you walk out of the store with your shiny new book, what you had entered into was a binding “implied” contract. It was implied that your payment allowed you to own the book; there was no need for you to enter into an express written or oral agreement.

Similarly, oral contracts are binding with a few specific exceptions. Let’s say your slick, high rolling producer friend asks you to direct “Troll 3: Bridges of Nilbog County,” the somber and philosophical sequel to the masterpiece known as “Troll 2.” You know this is a no-miss project that will catapult your career with Spielberg-like trajectory. You both agree that he will pay you DGA minimum plus 25% on the start of principal photography (which starts next Tuesday). You shake on it. Then you show up next Tuesday but Darren Aronofsky is sitting in the director’s chair, doing for washed-up trolls what he’s recently done for washed-up wrestlers. Are you out of luck? Nope. You and your slick producer friend entered into a binding oral agreement that specified the movie, the start date, and the compensation.

There are, however, certain contracts that must be in writing. While many of these do not apply to the entertainment industry (for example, real estate contracts), there is one critical type of entertainment contract that must be in writing: the exclusive transfer of the rights to a copyrighted piece of work (which is basically any original work that you create). Therefore, if you’re granting an exclusive license to a distributor to distribute your feature film on DVD, unless that contract is in writing, the distributor may not be able to enforce the exclusivity aspect of the agreement. Similarly, if you’re acquiring someone’s script and you pay the agreed-upon price, all the rights in that script will not transfer to you unless you have a written document indicating as much. If you don’t have it in writing, you may only be acquiring a non-exclusive license to use the property. In other words, that writer could go right out and find someone else to whom to license it on a non-exclusive basis.

What to learn from this: (a) Troll 2 is a must-see; (b) the Wrestler is a must-see; (c) most contracts do NOT necessarily have to be in writing to be valid; and (d) despite that fact, if you’re ever attempting to acquire rights in a property or to obtain an exclusive license to use such property, you must have a written agreement or else you’ll only be obtaining a non-exclusive license, which in the entertainment business, doesn’t get you bupkis. How’s that for straight-shootin’? (pretty weak, I know)

© 2008 Greenberg Glusker Fields Claman & Machtinger LLP (“Greenberg Glusker”). All rights reserved. This Blog contains information of a general nature that is not intended to be legal advice and should not be considered or relied on as legal advice. Any reader of this Blog who has legal matters involving information addressed in this Blog should consult with an experienced entertainment attorney. This Blog does not create an attorney-client relationship with any reader of this Blog. Greenberg Glusker does not represent or warrant that this Blog contains information that is true or accurate in all respects or that is the most current or complete information on the subject matter covered.

Matt Galsor and Jesse Saivar are attorneys in the entertainment transactional department of Greenberg Glusker Fields Claman & Machtinger LLP.