The Hollywood Film Industry has maintained a unique characteristic of allowing substantial capital investments to regularly proceed on the basis of oral (“handshake”) agreements.1 These handshake agreements result in an uncertain threat of legal enforcement and an increased exposure to contract liability. Nevertheless, handshake contracts have become so prevalent in Hollywood’s entertainment industry that no matter one’s opinion on the merits of using these contracts, attorneys have conformed to this longstanding tradition in order to stay competitive.
As a result, this longstanding practice of conducting business through handshake agreements has contributed to another time-honored Hollywood tradition: contract disputes. Hollywood’s flexible transactional agreements challenge conventional expectations that a written enforceable contract is necessary for any significant financial undertaking. Without a signed contract, disputes can arise over the terms of a deal or whether there is even a deal at all. To make matters worse, Hollywood attorneys in this industry are bound by the California Business & Professions Code and the California Rules of Professional Conduct to make special efforts to protect clients (and themselves) by reasonably limiting situations where clients are subject to liability. Nevertheless, transactional attorneys in Hollywood unethically and blatantly depart from this prudent approach and instead, support a practice that almost guarantees legal liability when disputes arise.
Assessing the Unethical Phenomenon Behind Hollywood’s Handshake Agreements,
28 U. Miami Bus. L. Rev.
Available at: https://repository.law.miami.edu/umblr/vol28/iss2/10