Think of your screenplay option as the blue print to you future relationship. It is far better to have an uncomfortable conversation now, than when you are several months in and something you didn’t discuss now blows up bringing everything to a halt.
The following is a list of things you should consider, discuss and note in your option document.
Length of a screenplay option
You must clearly stipulate the start and end of the option period. During the option period the producer (we will use this word to describe the person holding the option) has full rights to the script. You cannot, sell it, show it or film it during this period without their permission.
The cost of the option.
This is how much you will be paid for the option. It is worth stating that the option is not valid unless payment is received. Late payment should not extend the end date.
Sale price during option
You must stipulate how much you want for the script if they decide to purchase it. After all they have taken an option to see if they can find funding. Letting them know what the script will cost will enable the producer to see if this is a viable deal. If they think they can make your movie for a million and you want three million for the script, that would be a deal killer.
Who is the screenplay option with
The option is between the current copyright holder, normally the writer, and the producer. This should be an exclusive option. This means you will only have one option going at a time. You can’t sign two options with competing producers. Basically you cant sell the same script twice.
Who has the right to renew the option.
This should be stipulated in the option agreement. A producer may want to have the right to continually renew the option for a fee. Meaning that they retain the rights as long as they keep paying your fee.
You may stipulate that they get one renewal option or even none. This must be sorted out ahead of time. It should also be stipulated that and option is only in place once the writer has received payment for any extension.
How much is the renewal fee.
I have seen options where there is a discount for renewal. I personally have the same fee and period for the renewal.
This is a simple statement that says you are the copyright holder.
Use of third party and copyright material.
If you have one of your characters singing a song or there is a specific song playing. It is worth mentioning that you do or do not have copyright over that material. In this way the producer will not make the assumption that they are obtaining something by buying your script.
Producers will not make this mistake. However, by stating this in the option you are making sure that you have not contributed to any misunderstanding.
Permitted use by writer.
You should stipulate in the option what you intend to do with the script during the option period as well as any existing arrangements. If the script is already in a competition this should be mentioned in the option agreement. If you intend to enter the script in a competition or do a table read, this should all be mentioned.
If there is anything that either party wants excluded or behaviour they expressly want prevented it should also be stated. This is rare, but if you or the producer have a sticking point get it in the option. Such as discussing the story over social media.
Some options will contain information about rewrites or additional work to be done on the script. This is up to you. But if a producer has offered you $1000 for an option for 6 months. Do you really want to be doing work for the sort of money.
I am not a lawyer, so get one to help you draft an option. Or get them to review any options you get sent.
Options are a common thing in the spec world, so getting comfortable with the idea is something you’ll have to do.
There are resources all over the place. The WGA Writers Guild of America states some good minimums. But keep in mind that are for working professionals and if you are at the start of your career you should maybe temper your expectations.