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NY Breach of Contract Suit Over The Hobbit Rights Shows Clarity is Key


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1/1/2016
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On December 10, the Weinstein brothers of Miramax fame sued New Line Cinemas and Warner Bros. in New York county for breach of contract. Here is the essence of the claim:

When the Weinsteins (and their company, Miramax) sold the The Hobbit franchise rights to the defendants, the agreement stipulated that the plaintiffs would receive 5% of the revenue generated by the film. Warner Bros. then unilaterally decided to break the first book into three movies, and then claimed that they owed no royalties to the plaintiffs on the latter two installments of The Hobiit, because those new movies were "remakes," rather than "first installments" of the movies drawn from the books, and therefore, exempt from the revenue sharing provisions of their contract.

Granted, at this point we're only seeing the plaintiff's side to this argument. But, I have to admit, it seems rather compelling.

Leaving that aside, however, there is an important take-away from this case:

There is no such thing as a perfect agreement, and even the big boys can look back at their contracts with some tinge of regret that their agreement wasn't clearer.



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