The compensation for the option and purchase usually consists of three separate payment methods. First, the initial payment option and all payments are due to extend the option. These option payments are, from the manufacturer`s point of view, “real” funds; that is, the money comes directly from the producer`s pocket. As a result, producers generally want to keep option payments as low as possible. As a general rule, authors can also be flexible when it comes to option payments. To those who are not, it must be remembered that without the option, the rights of history should not be exploited, and if they are not exploited, they will not generate any income for the author. The rule of thumb is that the option payment should be 10% of the purchase price. However, an option on a nominal amount is not unusual. Because negotiating the option often involves costs (for example. B the legal fees incurred by the author to verify the agreement), it is possible to assess the adequacy of option payments, to determine whether they compensate the author appropriately for the costs incurred in granting the rights, with perhaps some extra money, so that the author feels that he has obtained something to waive the rights without an option for a while. Guarantees and compensation are also included in most option contracts. As a general rule, the author must ensure that he is the sole owner of the work, that the work is original and that it does not defame or infiltrate anyone in private life, and that there are no claims or lawsuits relating to the work. As a general rule, if an option is involved, the author will also guarantee that the rights nauser options will not be sold or otherwise conceded during the option period.
In addition to these guarantees, the author is generally asked to compensate himself for any claim against the manufacturer for violation of any of the guarantees provided by the author. The author may also be required to provide proof of the use of copyright. Representations and guarantees must be taken very seriously by both parties during the negotiations. In the course of negotiations, these “repetitions and guarantees” may reveal limits to an author`s ability to grant certain rights. The author may also be responsible for clarifying certain rights or be held responsible in certain circumstances. While manufacturers may, to some extent, rely on representatives and guarantees, they should also conduct their own due diligence investigation and consider obtaining adequate insurance coverage to protect themselves in the event of a claim. An LRA also gives you control over how your story is told. If you negotiate and work with the creative team that is interested in your story, you can be more sure that they know what they are doing and learn more about how they represent you and your life. A typical option for buying history rights contains a number of important provisions.
The option gives the manufacturer a period, usually a year or two, during which the manufacturer has the exclusive right to acquire the rights to the story. It is common for a provision to allow the manufacturer to extend the option for an additional period (often an additional year) at the manufacturer`s discretion. This reduces the producer`s ex ante costs and gives the producer some flexibility to assess the viability of the project in the future. If the manufacturer does not exercise the option within this time, the option expires and all rights accrue to the author. Acquiring the rights may be the best decision if a manufacturer has already secured financing, sought talent or developed the project in another way, where it is ready to move quickly. This transaction may be subject to other provisions, such as safeguarding other name and similarity rights, screen credits, press and advertising policies, holdbacks for other projects, social media campaigns and what happens to rights if the company abandons the project before publication.