CONTRACTS II Milich Practice Problem 3 Shirley McLoon contracted with LA Studios to co star with Dustin Hoffman in a film cal

							CONTRACTS II                                                                    Milich

Practice Problem # 3

Shirley McLoon contracted with LA Studios to co-star with Dustin Hoffman in a film called
"Little Big Country." At the time the contract was executed, January 15, the script was still
in outline form and had McLoon playing Hoffman's older sister. Among the relevant
provisions of the contract:

       (#2) McLoon is co-star with Mr. Hoffman and shall receive billing, promotion,
       staffing, and support facilities (including dressing rooms) equivalent to or better
       than Mr. Hoffman's.

       (#8) McLoon's total compensation under this contract shall be $600,000 to be
       paid in 3 installments: (1) the first day of rehearsals, (2) 30 days after the first
       payment, (3) 10 days after shooting has been completed.

       (#13) McLoon shall be available for work on this project from June 1 through
       August 31 of this year. Unexcused absences shall result in McLoon paying LA
       Studios liquidated damages of $10,000 for each day of unexcused absence.

       (#34) LA Studios may terminate this contract at any time provided it pays
       McLoon one-third of the contract price.

The contract states that McLoon has no say in script or cast changes.

On June 1, McLoon reported to Denver where the film was to be shot. But Hoffman had
read the script and hated it. The script was sent back to the writers and rehearsals were
delayed. McLoon went home to New York City for five days. When she returned, the
producer yelled at her for leaving without permission. He said he could have used that time
for costume fittings.

The new script arrived, with Hoffman's blessing, on June 19. McLoon now plays Hoffman's
invalid mother. Since the production had been delayed, the producer asked McLoon to
extend her contract availability through September. McLoon refused. (She did not have
any commitments until next February, but she was growing to hate this film and the
producer).

Rehearsals started on June 23. The producer told McLoon that the budget and cash flow
were messed up due to the delays and asked her to accept half of her payment now, and
the other $100,000 with the second installment in 30 days. McLoon exploded. She called
the producer and everyone else on the set, including Hoffman, some rather nasty names
and stormed out. McLoon refused to work the next day but returned on the 25th after the
producer threatened to hire Anne Bancroft to replace her. McLoon received a check for
$100,000 on June 25 and deposited it to her account.
Shooting began on July 8 and for the next two weeks, McLoon was very busy -- working 15
hours per day, everyday. On the set, Hoffman complained loudly that McLoon is ruining the
movie and that he never should have agreed to co-star with a "wacked out, washed up
belly dancer."

On the morning of July 23, a new script change arrived. McLoon's character would die
suddenly, in the middle of the movie. When McLoon asked the producer why her character
was being killed off, he said that since she wouldn't agree to extend her availability, they
had to shorten her part. The producer also admitted that Hoffman felt it was "impossible"
for him to continue working with her. McLoon told the producer she would refuse to shoot
any more scenes unless the script change was withdrawn. On her way out, she told
Hoffman and nearly everyone else on the set how much she hated them personally,
professionally, and in every other way.

Even with the new script, the producer needed McLoon for two more days of shooting. He
called her on the morning of July 24 and asked her if she was coming in. She told him that
she needed to talk to her lawyer first. The producer replied that they can't stop production
while she consults with her lawyer and that she had better be on the set by noon. McLoon
could not get through to her lawyer and didn’t show up for work on July 24. The producer
ordered the writers to remove her remaining, unshot, scenes and had the following letter
hand-delivered to McLoon at her hotel at 8:30 that evening.


       Dear Ms. McLoon:

              We are exercising our right to cancel our contract with you, effective
       immediately. Please do not return to the set. Your personal belongings will be
       sent to your hotel tomorrow.

                                                          s/Wally Jones, pres.
                                                           LA Studios


In class, we will work on negotiating a mutually acceptable settlement of this dispute. But to
be prepared for negotiation, you must first know the legal strengths and weaknesses of
your case. Prepare a legal analysis for both sides.