How to Avoid a Bad Deal When Selling Your Script

Even with excellent counsel on your side, it’s hard to know exactly what to look for in a screenplay purchase agreement or option agreement; option length, script credits, rights, and bonuses are big ones. But there are two other things to watch for when optioning or selling your screenplay: low-money option fees and reversion clauses.

We sat down with legal expert Sean Pope of Ramo Law, an entertainment attorney firm with offices in Beverly Hills and New York City. Besides pointing out two things to look out for when optioning or selling your screenplay, he explains why these items could spell trouble for you, the screenwriter, down the road.

In this article, learn more about low-money option fees and reversion clauses and how these may negatively impact the creator while benefitting the purchasing party.

Legal Agreements Screenwriters Should Avoid

One trap screenwriters often fall into is the low-money option. This is especially true for writers who have never optioned a script before and are simply excited at the prospect of possible production. While a low-money option is not a great deal in terms of payment, there’s an even worse reason why you may want to avoid this legal pitfall.

The second thing to look out for is the lack of a reversion clause. A producer or executive rarely offers this up in your purchase agreement, so you have to ask for it.

Below, Sean explains these two things to watch out for. While they appear simple on the surface, there could be a sneakier reason why you will or won’t find them in your screenplay legal agreement.

Low-Money Option Fees

When a company or producer options a screenplay, they’re essentially paying the screenwriter a fee to rent the script for a little while and see if they can drum up interest from a director, cast, and perhaps financiers. If they can’t, you get the script back. If they can, they’d get the right to purchase the screenplay.

These fees can range from $1 to thousands of dollars.

But in exchange for that fee and the opportunity to have your screenplay produced, you can’t shop it around to anyone else for the specified period of time.

If you’re sitting on a pile of great scripts, it might not make much difference to you to have one script out of commission for a while in exchange for the chance of having it produced. But if you only have a few viable scripts for the current market, you should ask for more cash for the option.  

No Reversion Clause

In a screenplay purchase agreement without a reversion clause, the producer or company that bought your screenplay paid a specified purchase price to own all the rights to the script.

You’ve heard of the screenwriters who’ve sold tons of scripts during their lifetime but have yet to see a “written by” credit on a film? While the scenario above is not always to blame, Sean said, “it can be more common than you think.”

An initial agreement won’t typically feature a reversion clause because it’s not beneficial to the purchasing party.

In Conclusion

Understanding what to look for in a screenplay option or script purchase agreement will help you protect yourself and your life’s work when the opportunity knocks. While producers and production companies aren’t always trying to be sneaky, they will always do what’s best for them unless you know to ask otherwise.

Make sure your legal agreements are fair by considering the option price and asking for a reversion clause in the event that someone wants to buy your screenplay.

I’m just taking a vested interest in you, writer,