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The following is a case study in our series about force majeure. For background, please see Force Majeure, Impossibility and Triggering Events.
Motion picture distribution agreements are one such type of contract in which the force majeure clause could be implicated in light of the COVID-19 pandemic. Generally, a distribution agreement is made between the producer (or whomever owns the distribution rights to the film) and the distributor, granting the distributor the right to distribute the film in exchange for a portion of revenue generated by the film’s distribution. However, in light of the pandemic, both producers and distributors may be unable to meet their obligations under pre-existing distribution agreements.
On the producer’s side, production has been halted on many motion pictures, which would drastically affect the producer’s ability to deliver a finished film to the distributor, particularly given the fact that the state of emergency is ongoing and indefinite. Conversely, if a producer had a finished film to deliver to its distributor, that distributor may have an incredibly difficult time distributing a film in the current climate, as theaters are closed indefinitely due to the pandemic; however, some of the loss incurred here could be mitigated by choosing to distribute the film through a streaming platform, as so many consumers turn to streaming services such as Netflix and Hulu while quarantining at home.
Pfeiffer Law Corp limits its practice to entertainment matters.
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