Client refusing to pay? Crew demanding cash? Here’s how you navigate contracts during a pandemic.
Here’s one: You finished a video for a client. However, the client is now saying they can’t pay because of coronavirus. What are your options?
Here's another: you were in the middle of shooting a project, and then had to pause indefinitely because of the pandemic. Now your cast and crew are asking for their money. Do you owe them?
Courtesy of the Slamdance Film Festival, David Albert Pierce of Pierce Law Group, LLP started a Facebook Live chat titled The Producer’s Legal Guide to COVID-19 to answer exactly these kinds of questions. You can watch parts 1 and 2 below.
No Film School was on hand for Part 1 and we’ve compiled the 3 most helpful takeaways for filmmaker below.
1. Look for your contract’s mention of “Act of God” or “force majeure.”
Here’s the very first place to look if you are experiencing a contract dispute. Under the 'boilerplate' will be spelled out who has to do what in the face of acts of god, natural disasters, and force majeure.
“There’s no such thing as ‘just boilerplate’” explained Pierce. As he explained it, there are 3 ways a contract can be written: pro company, middle of the road, or pro opposite side of company.
As he explains it, COVID-19 is a great lesson for all producers because we will now need to go and look at whatever we had considered ‘boilerplate’ to see if our ass is grass or not.
Your contract will spell out exactly what happens if there is a force majeure clause that suspends, slows down, or terminates a production. Coronavirus, as far as lawyers are concerned, is an ‘act of god’. Your contract will say that in this event, either money will be paid, money will be refunded, or some such elaboration between those lines. And that’s what you’re stuck with.
(Bonus tip: in the future, all contracts will specifically mention ‘pandemics’.)
2. No mention of force majeure? No contract? Look to common law remedies.
It turns out the only force majeure you've got is a DVD copy of the fantastic 2014 film from Ruben Östlund. Now what? Or maybe you don’t even have a contract, per se. Here’s where we enter common law remedies.
“Common law remedies that can assist you in place or in addition to contract law,” explained Pierce.
Basically, there’s the doctrine of frustration of purpose and the doctrine of impossibility/impracticability.
This is a common law principle that defines when you can’t perform your duties or when you can’t follow through on your plans.
For example, as Pierce described, you got a hotel room for SXSW or you rented a venue for your film at SXSW. Those venues in Texas understood that the whole reason for the purpose was to promote your film while you were at SXSW. You can make the frustration of purpose argument regardless if you had force majeure clause, and be entitled to get your money back.
3. Remember this is an industry of repeat players.
It’s a weird time, and as Pierce reminded us, “Nobody has the ability to fight this in court.” So if you are in dispute with someone, remember that this is “an industry of repeat players.” Stay level headed and get a mediator. When you get out of this, you will see all these same people again.