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Clause & Effect <b>Film-Option Agreements/Theatrical Release.
The U.S. Court of Appeals for the Ninth Circuit found a genuine issue of material fact existed as to whether a film-option agreement required a film to be released initially in theaters. LaHaye v. Goodneuz Group LLC, 04-55839. Rev. Tim LaHaye, co-author of the Christian-book series 'Left Behind,' had filed suit against a production company over a film based on one of the books. The appeals court first found in its unpublished opinion that there was a genuine issue of material fact as to whether the defendants breached the option contract by refusing to negotiate a long-form agreement. According to the court: 'Neither the language of the contract, nor the circumstances under which the parties contracted, illuminates the conditions under which a long-form agreement would be 'needed.”
The appeals court then noted: 'The terms of the [option] contract suggest an implicit obligation to release the film theatrically. To the extent that [the option contract], which prescribes the consideration the producers must pay for each type of production, contemplates production of a film, it expressly and exclusively prescribes consideration for a 'theatrical motion picture' ' not for any other kind of motion picture. Further, [the option contract] provides that the purchase price set forth ' pertains to a 'theatrical motion picture.”
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