This development, at a time when the industry is grappling with soaring costs and a shortage of stories that can be developed into commercially viable franchises, however, may prompt stakeholders to ensure clearer and prominent exit clauses in future film contracts, lawyers told ET.
Among the various provisions that could help avert such disputes, artists’ exit rights and creative control mechanisms rank high on the list, they said.
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“Creative control disputes are among the most litigated yet contractually overlooked areas in Indian entertainment law. A well-drafted artist agreement should set a clear deadline tied to the start of principal photography, beyond which an artist can no longer exit the project on grounds of creative disagreement,” said Priyanka Sinha, cofounder and partner at law firm A&P Partners.
“Before that deadline, a clean exit option, backed by an advance refund obligation, gives both parties a legally sound way out, limiting exposure to consequential damage claims on either side. The clause reflects a simple principle: creative freedom and commercial certainty can coexist; it just takes precise drafting,” she added.
Lawyers also pointed to the importance of including an “exclusivity period” clause in film contracts.”It is critical to spell out the period for which an artist will be associated with a film. This will help avoid clashes between artists and producers,” said a lawyer who did not want to be named.
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In 2018, actor Sara Ali Khan began shooting for director Rohit Shetty’s film Simmba after her debut film Kedarnath, directed by Abhishek Kapoor, was delayed. Subsequently, Kapoor demanded exclusive dates from Khan for Kedarnath. These dates coincided with her shooting schedule for Simmba. Consequently, Kapoor initiated legal proceedings against the actor.
Legal experts also stressed that film contracts should include provisions for the reimbursement of documented costs.
“Given the significant investments made in development, financing, marketing and production planning based on the cast, agreements should provide for reimbursement of documented costs, along with other pre-agreed remedies, in the event of an unjustified withdrawal by an artist,” said Nitika Nagar Mohandas, associate partner designate at Anand & Naik.
Film contracts involve personal services and therefore cannot be specifically enforced, said experts.
“In India, the legal position regarding contracts involving personal services, such as those of actors, directors and other creative professionals, is that they cannot be specifically enforced. A court will not compel an artist to continue performing in a project against his or her will,” said Anushree Rauta, head of media and entertainment practice at ANM Global.
“While Indian courts have historically recognised and enforced negative covenants during the subsistence of a contract, such enforcement is not automatic and is subject to important limitations, particularly where the effect would be to force the artist to remain idle or indirectly compel performance,” she added.