OPTIONING YOUR SCREENPLAY
Always consult a lawyer for legal advice on offers and contracts around optioning your screenplay.
Scripts are optioned from writers by producers so they can be developed into a film. An option gives the producer the exclusive right to develop the film by legally obtaining the rights to it for a specified period of time. In that time period the producer will work to raise money for the film, attach talent or a director, possibly solicit interest from potential distributor and sales agent contacts. At any time within the option period the contract can be "exercised" and the script purchased for a purchase price set in the contract.
Some option contracts may additionally include a development period whereby the producer will work to improve the script through rewrites and changes. The original writer may be given the first crack at the rewrites, but it is also not uncommon for a producer to hire other writers to come onto a specific project to work on the script. It may need some polish, or punch-ups. A producer can not hire someone to rewrite the screenplay withouth the writer's agreement.
A typical opton contract might look like this; first year script development to work on any changes or rewrites, second year to produce and complete the film. In this example the producer has a total of two years to develop and produce the film. If the producer doesn't get the film made within the specified period the option contract expires and the script goes back to the writer who can then look for another sale or option agreement. The writer and producer can decide if they want to renew the option for another cycle or not.
Some writers wonder about who owns the rights to their script during an option and afterwards. An option simply put, is granting the exclusive rights to buy or sell something within a specified time at a set price. So during the option period the writer still owns the rights but has a contract in place where the rights can be bought at any time within the defined period. This is why during an option a writer can not continue to solicit interest for that specific script, enter it into contests, or send it to Hollywood for example. If the producer exercises the option contact, it means the writer has sold the rights to the script.
A good producer should have two primary objectives when looking to option a script; one is to actually get the film made and completed, and the other is to get various sales & distribution deals for the film so that the film can recoup its budget, be seen by audiences, and make a profit for investors. It's for all these reasons a producer can only work on projects that they have full legal rights to – as it would be unethical (not to mention a complete waste of time) to solicit money from investors or seek discussions with film distributors or sales agents on potential projects the producer does not hold any rights to.