The most common phrase lawyers advise their clients with? “Get it in writing!” Given its history, Hollywood is the client, of course, that doesn’t always listen. Oral contracts and “hand shake” deals are a common way of doing business in the industry and this time A&E Television networks offered a pricey example that Studio lawyers can point to in hopes of keeping their clients more in line.
As THR Esq. has reported, the U.S. appellate court in South Carolina has upheld an oral contract between A & E and a South Carolina real estate broker, Richard C. Davis, over the A&E show Flip This House. Davis and his firm, Trademark Properties Inc. brought breach of contract and fraud actions against A&E, claiming its director of lifestyle programming, Charles Nordlander made an oral agreement with Davis, in a telephone conversation, to split net proceeds of the show equally, in exchange for Davis developing and appearing on the show. Due to disputes over compensation, A&E refused to pay and he left the show to develop The Real Estate Pros for TLC.
A federal court in South Carolina sided with Davis, finding a binding oral contract and a jury awarded him $4 million; A&E appealed to the Fourth Circuit, where the judges upheld the jury verdict. Although the appellate opinion is unpublished, the ABA sheds light on an interesting tidbit in this case. The appellate ruling notes that Nordlander’s utterance during his phone chat, “OK, OK, I get it,” was enough to accept terms of the agreement. In her dissent, Judge Allyson Duncan disagrees whether that phrase constitutes acceptance or simple acknowledgment.
A bigger take-away from this case? Follow up those phone calls with a written deal memo.