Payment conditions between communication agencies and production companies

5.1 Confirmation of the production

On the award day, the Communication agency will send the Production company an official order form.
The amount indicated on the order form will have to correspond with the total amount of the approved offer (budget).

 

5.2 Payment terms

Once the Production company receives the written confirmation of the production project; the Communication agency will receive an invoice for the 1st payment (60% of the total budget). This amount will be paid no later than 5 working days before the 1st shooting day.

For productions which need to be filmed abroad, the 1ste invoice will amount to 75% of the total budget.

If written confirmation of the production hasn’t been issued/received, the Production company reserves the right to stop the work until such confirmation is obtained/received.

The Advertiser agrees that the Communication agency will be paid before the date the Communication agency is making payments to the Production company in order to avoid delays in payments. Lack of a payment by the Advertiser to the Communication agency will not be accepted as an argument for a late payment to a Production company.

From the legal stand, it is the Communication agency that is responsible for payments to the Production company and all suppliers involved.

If time is an essence and written confirmation hasn’t been issued by the Communication agency the Communication agency will acknowledges this in writing and production will commends the Production company will commends the production.

The Production company will invoice the remaining amount as soon as the work, conforming to what has been agreed, has been completed, approved and accepted by the Communication agency and the Advertiser. The invoice will be paid within 60 days after the delivery date.

The Communication agency is responsible for the approval of the finished commercial and this approval cannot be postponed or kept unreasonably withheld.

The invoices from the Production company consisting of the talent buyouts (renewal of buyouts included) will be paid by the Communication agency before the first airing of the commercial film.

 

5.3 Fluctuation of exchange rates

With more productions being filmed on locations abroad, the currency exchange rates and their fluctuations have to be taken into a consideration.
When a production offer has been made based on the price estimated in another currency outside the Euro zone, it is the Production company that defines the currency exchange rate. Exchange rate increase or decrease will be reviewed on the day of the payment made by the Advertiser which could either bring a favor or a disadvantage to the payee.

 

5.4. Cancellation

a. Cancellation by the Communication agency and/or advertiser:

In the event of a cancellation of the production, the Production company is entitled to a cancellation fee. All costs up to the date of cancellation occurred by the Production company will be covered by the Communication agency and/or Advertiser. The cancellation notice has to be given in writing. The cancellation costs include: Salaries, supplies, irrevocable commitments and indemnifications. The cancellation fee will also include a proportion of a director’s fee, depending on the amount of work already done.

In addition, a fixed sum is payable to the Production company to compensate any losses caused by the cancellation. This sum will equal to the percentage of an agreed mark-up for the production according the production offer, calculated on basis of the real costs made as stipulated in paragraph 2 of this article. This sum cannot be less than one third of the mark-up calculated in the agreed offer.

In the event of cancellation of the production within 48 hours before the shoot day(s); this sum will equal to the total mark-up agreed in the agreed offer.

b. Cancellation by the Production company:

As a consequence of a cancellation by the Production company, the complete repayment of all the amounts paid by the Communication agency and /or Advertiser will apply with the exception of costs made by the Production company related to the production (including internal costs, as for example salaries). All costs will be presented in a form of documents to prove the expenditure.