Behind the Scenes w/ David Brown - What is an EE (Essential Element)?
Behind the Scenes: Understanding Essential Element (EE) Clauses in Film Contracts
Ever wondered how film contracts protect a movie's most valuable assets? This article breaks down a complex topic in film production – essential element (EE) clauses – in an easy-to-understand way. Based on a YouTube video by David Brown, we'll explore what these clauses are, why they're important, and how they relate to film insurance.
What is an Essential Element?
So, what exactly is an essential element in a film contract? Simply put, it's a fundamental requirement that must be met for the contract to be valid and enforceable. Think of it as a prerequisite. If this element isn't present, the whole agreement falls apart.
Let's look at an example. Imagine a studio makes a deal with Jon Snow as the lead actor and Jon Smith as the director. Both are known names and bring value to the project.
In the contract, the studio specifically names Jon Snow and Jon Smith as essential elements. What does this mean? Well, if Jon Snow can't play the role, or Jon Smith doesn't direct, the contract becomes unenforceable. It's a deal-breaker. The involvement of both men is essential to the contract's validity.
Why are EE Clauses Necessary?
Why do studios and financiers insist on including essential element clauses in their contracts? Because certain actors, directors, and other key personnel bring significant value and marketability to a project.
A well-known actor can attract audiences and bring attention to the film. A seasoned director can ensure the quality of the film. Sometimes, their involvement is the reason the project got funded in the first place.
EE clauses protect the investment by ensuring that the key individuals who contribute to the film's success are actually involved. It's a way to safeguard the financial backing and ensure the film has the best chance of succeeding.
EE Policies: Insurance for Essential Elements
Let's talk about EE insurance policies and how they work. What happens if an essential element can't fulfill their contractual obligations? That's where an EE policy comes in.
An EE policy is a type of insurance that covers the financial loss if an essential element (usually an actor or director) is unable to perform. It's like a life insurance policy for key personnel during the shoot.
What events would trigger the EE policy? Here are a few examples:
Death: The actor passes away.
Illness/Injury: The actor becomes seriously ill or injured and can't perform.
How much does the policy cover? Traditionally, the policy covers up to the value of the financing secured for the project.
What does the insurance money actually pay for? It can cover a few different things:
Reshoots: Costs to reshoot scenes with a replacement actor.
Project Completion: Expenses to finish the film despite the loss of the EE.
Return on Investment: Returning the investment to the financiers (bank or equity investor) if the project can't be completed.
Who is Typically Covered by an EE Policy?
Which roles are commonly covered by EE policies? Here are a few:
Director
Cinematographer
Lead Actors (top 2)
These roles are typically included because they are considered essential for the artistic and commercial success of the film. The director guides the vision, the cinematographer creates the visual style, and the lead actors draw in the audience.
Important Considerations
Keep these key takeaways in mind:
Inform Your Broker: If you have an EE clause in any agreement, always inform your insurance broker.
Secure an EE Policy: Obtain an EE policy to cover the individuals named in the EE clause. It's a crucial step in protecting your film investment.
David Brown from the YouTube video also suggests film financing or insurance advice, contact FilmMoney at: www.filmmoney.com
Wrap Up
Understanding essential element clauses and EE policies is vital for anyone involved in film production. They're essential tools for protecting investments and ensuring a film's success.
Did you find this article helpful? Subscribe to the channel for more behind-the-scenes insights. Leave comments or questions about EE clauses or film insurance below! And share this video with others in the film industry.