IT DEPENDS: Dealing With Change

In order to show growth, to evolve, we’ve always needed to change from where we were to where we need to be next. Entertainment attorney, Christopher Schiller, explores how we approach change, how we assess what change is really needed, and where we need to evaluate how to make the required change into a beneficial step forward.
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contract change

There are two truisms that are quoted in so many movies that crediting them would result in a very long list.

“Change or die.” and “Change is life.”

They seem opposite, but, really they are two sides of the same coin. In order to show growth, to evolve, we’ve always needed to change from where we were to where we need to be next. The current crisis is no different in its requirement that we’ll have to change in order to survive. But how we approach change, how we assess what change is really needed and where we need to evaluate how to make the required change into a beneficial step forward are all important means to our moving on from where we were and getting to where we need to be.

Writers are used to change

As writers, we are all familiar with the need to change. The dreaded re-write, incorporating “notes,” adaptation dilemmas and dealing with different creative voices all expose us to the needs to alter what we may have considered perfect when we delivered it. This kind of change we may not like, but we have learned to live with it and begrudgingly often find that the changes improve the final results. The crux is to know what really needs to change and what should be argued for remaining the same. It’s a delicate balance, but, the good writers learn to discern and adjust properly.

That same kind of awareness and flexibility are needed in other types of change we face in our industry as well.

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Changes that are required for business as usual

As one who has drafted many, many production contracts in my line of work, I am keenly aware of how much change is a way of life in Hollywood. So much so that I routinely add the facilities to be able to change the terms of a contract in the future even while solidifying and locking down “in black and white” the current terms agreed upon in a deal. By the end of the drafting stage, the parties should be certain that they understand what is required of them and what they have agreed to do to get what they want from the other side. 

But our industry isn’t a fast turn-around, simple transaction type of business. Often a contract is in force for many months, even years before all the terms are completely satisfied. A lot can happen over the life of a contract. And although I pride myself in anticipating as many possibilities as feasible and plan for the unlikely events in the contracts I construct, there are some things that can crop up that were in no ones expectations and would interfere with or change the results of the deal points, altering the initial conditions of the deal.

Change through amendments and waivers

Good contracts must be sufficiently self contained to accommodate the entirety of the deal. Judges refer to this as within the “four corners”, meaning all aspects of interpretation of the agreement can be understood by considering the language contained within the contract alone. In order to accommodate the flexibility within that expectation to accommodate the unexpected changes that might be needed in the course of the fulfillment of a contract the drafters must properly allow for a method for those alterations within the terms of the initial deal. This is where the amendment and waiver clauses, properly structured can save the day.

An amendment clause stipulates the exact methods and strictures to follow in order to alter the terms of the contract in the future (usually by mutual agreement of the parties in a signed writing – i.e. no verbal only alterations or e-mail exchanges count.) The amendment clause is often considered boilerplate and given little attention, but, if there is no amendment clause in a contract the only legal way to alter the terms even simply is to void the entire initial contract and draft a new one from scratch. And only amendments that follow the exactly laid out formalities in the clause can alter the original deal. So the details are important to know ahead of time if changes are potentially to be made.

Waiver clauses, on the other hand do not technically alter the substance of the terms of a contract, but act as a “get out of jail free” card for a particular requirement of fulfillment of some part of the obligations of one party by permission of the other. Carefully crafted waiver clauses allow one party to waive the obligations of the other in such a way that waiving once does not remove that obligation or any other from future instances of the relieved parties obligations. Without specific waiver clause language, some courts have interpreted that once waived a duty is no longer ever required. Again, details matter.

In a well-drafted agreement, the reason for a necessary change is usually because of unlikely events actually occurring or significant change from the initial expectations. Assuming the clauses of the contract allow for changes to take place the parties would discuss the altered conditions and negotiate the best way to change the agreement to accommodate those needs.

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The Power to change, and how and/or when to manage it or resist it

Change is a two-way street. Usually, when a contract is entered into both sides are getting what they want and giving up what they feel is necessary in order to achieve that. It’s a balanced calculation. When a change is in the offing, proper consideration to that balance needs to be paid.

Why is the change requested? Does it relieve a burden that one side was under? Is it something that is a must to complete the project or is it just a “nice to have” request? What is the side that will benefit most from the change willing to add to the mix to re-balance the arrangement?

As well as possible the status quo should be maintained after the change. If you have to give something back because of the change, you should gain something of equivalent value in the exchange to maintain it. It shouldn’t matter if one side’s sudden difficulties are shared by the other side or not. The negotiated deal was negotiated to an agreeable point. That point shouldn’t shift just because one side wants it to.

At the very least it should be acknowledged that the original negotiations were arrived at as a fair deal and the new alterations shouldn’t impinge on that fairness. It could be that the side asking for the change never intended to go through with the original terms and are using the proposed amendment as a wedge to unbalance the deal. This ploy is usually attempted when time is of the essence or the obligations of the other side have already been delivered. It’s a sad fact that this kind of maneuvering does happen more often than we’d like. (e.g. somehow the writer is pressured to deliver their draft on time but their payment for that draft seems to miss its deal deadline so they attempt to negotiate for a different delivery date for when the money is owed.)

When change is imminent, make a considered choice

A career in this industry is a long game. Sometimes you’re asked to do something right now that would help the other side immensely. If you can find a way to carry that benefit into the future, then the recompense for allowing the change can be deferred. Sometimes the ones requesting the immediate change will have little further role in your future career so the rebalancing act should be timely since no one will be around to deliver it later. When considering the details of the current issues and their impact on your business future I have to say, it depends.

What if you don’t change?

Here’s the rub. Often a change is approached from the requesting party as if it is a dire need and must be done. That’s not your perspective. From your point of view, you have a perfectly good deal in the current agreement. If you don’t want to accept the change, stick to the original deal. That’s a solid, defensible tack.

Not changing could have dire consequences, depending on why the change was being requested. It may mean that the side with the difficulty is no longer able to deliver on the agreement that they agreed to. If they can’t offer something worth accepting the change in exchange, then that unfortunate consequence has to be the result. And the default of the contract would be handled per the original contract’s terms. You have the power to stick to the original agreement.

And if you’re the one wanting the change...

And in a final conclusion, if it is your side that needs to have a change considered, just re-read the above from the other perspective and realize that you need to offer a balancing equivalent to the change requested. It’s only fair.

More articles by Christopher Schiller

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