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• W3123804311 abstract "Hollywood film studios, talent and other deal participants regularly commit to big-budget film projects on the basis of unsigned “deal memos” or draft agreements whose legal enforceability is uncertain. These “soft contracts” constitute a hybrid instrument that addresses a challenging transactional environment where neither formal contract nor reputation effects adequately protect parties against the holdup risk and project risk inherent to a film project. Uncertainly enforceable contracts supply an implicit termination and renegotiation option that provides some protection against project risk while maintaining a threat of legal liability that provides some protection against holdup risk. Historical evidence suggests that soft contracts substitute for the vertically integrated structures that allocated these risks in the “studio system” era. The prevalence of soft contracting in Hollywood and other markets suggests an efficiency rationale for the historical relaxation of formation requirements in contract law. * Professor, Gould School of Law, University of Southern California. I am grateful for valuable suggestions from Mark Weinstein and other participants at the USC Law School Faculty Workshop and the 2012 Annual Conference of the International Society for New Institutional Economics, as well as conversations and interviews with industry executives, producers, accountants and attorneys. I especially thank David Fierson of Alcon Entertainment for bringing this paper’s subject to my attention and Jonathan Handel for extensive discussions. For excellent research assistance, I thank Dmitri Gabrielov, Michael Hartman, Blake Horn, Minku Kang, Omar Nourreldin,Vanessa Roman, and Lewis Stevenson. Comments are welcome at" @default.
• W3123804311 created "2021-02-01" @default.
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• W3123804311 date "2014-01-01" @default.
• W3123804311 modified "2023-09-23" @default.
• W3123804311 title "Hollywood Deals: Soft Contracts for Hard Markets" @default.
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