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Breach of contract award of $1.7 million overturned upon appeal

There’s no business like show business! The paychecks are bigger, the players more attractive and the parties more lavish. Yet, contracts are just as important in the entertainment industry as they are in any other industry. Agreements should never be made on a handshake alone; it is imperative to get everything in writing to avoid potential business disputes.

A Harris County jury awarded a man who sued his business partner for breach of contract $1.7 million for actual and exemplary damages. The two men were both trying to produce a movie about a terrorist attack; it was suggested that they combine their efforts and they agreed to form a joint production company to produce the project. The agreement was never put in writing, however. This caused the financial backers from the original film project to drop out of the combined project and the movie was never made. As a result, the second man sued the first for breach of contract. The jury award was overturned upon appeal, however. The presiding judge ruled that the damages could not be awarded for breach of contract because the agreement was never formally documented. There is still evidence that entitles the man to a lesser amount of compensation for actual expenses incurred, so a retrial is warranted.

This case underscores the importance of obtaining legal documentation for any business transaction—large or small, gritty or glamorous. Contracts offer legal protection in the event that another feels that they are wronged during the course of business and/or gives you grounds for action if you feel that the other has not fulfilled their portion of the contract.

Source: Entertainment Law Digest, “New Trial Ordered to Sort Out Fumbled Movie Deal,” Jeff D. Gorman, Sep. 6, 2013. 

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