Five terms to read before you sign a distribution agreement.

An offer for your film arrives as a PDF, and the instinct is to sign it before anyone changes their mind. The instinct is fair. Offers are rare, and a signed deal is the reason you made a film that can be sold.

The agreement outlasts the excitement. Five of its terms decide whether the film earns you anything and when it comes back to you. You can read all five in an hour, before you call a lawyer, and you will ask the lawyer better questions for it.

A note on what this is. We make delivery files for a living: the DCP, the captions, the report that says the master passes. This is a reading guide from that side of the table. It is not legal advice, and an entertainment attorney should read any agreement before you sign it.

1. The term.

The term is how long the distributor holds your film. Find the number of years. Then find what stretches it: a clock that starts at first release instead of signature, a renewal that happens unless you object in writing, a sell-off period after the term ends.

Then look for the way back. A reversion clause returns the rights to you if the film is not released by a set date, or if statements and payments stop. If there is no reversion clause, ask for one. It is the difference between a film that is out of your hands for a while and a film that is out of your hands.

2. The territory and the rights.

This is where the film can be sold and in what form. “Worldwide, all media, now known or later devised” is the widest grant there is. Ask which territories and formats the company releases itself, and which it hands to someone else. Each handoff can add a fee before the money reaches you.

Rights they do not plan to use can stay with you. Common ones to ask about are festival and community screenings, educational sales, and selling the film from your own website. If you are still booking rooms yourself, that carve-out matters. Our free regional screening guides list venues that take independent films, and you will want to be allowed to use them.

3. The minimum guarantee.

A minimum guarantee, or MG, is money paid to you up front against what the film earns later. With an MG, the distributor has its own money riding on your film. Without one, you are paid only from what is left after their fee and their expenses.

A deal with no MG can still be a good deal. It means the next two terms carry all the weight.

4. Expenses, and the cap on them.

A distributor recovers what it spends releasing your film before you see a share. Read for four things: which expenses count, whether there is a cap in dollars, whether spending past the cap needs your written approval, and whether the fee comes out before or after expenses.

Here is why the cap matters, with round numbers chosen to make the arithmetic easy. They are not typical of any deal. Say the film brings in $100,000 and the fee is 25 percent. That is $25,000 to the distributor, which leaves $75,000. If expenses run to $60,000, you receive $15,000. If the agreement caps expenses at $30,000, you receive $45,000. Same film, same fee, same audience.

Delivery is one of those expenses, and it is the one you control. Every agreement has a delivery schedule attached: the master, the sound mixes, the captions, the paperwork. Whatever you cannot hand over, the distributor has made and charges back to the film at its own price. A film that arrives complete costs less to release. If the schedule asks for a DCP, here is how to tell whether you need one and how to prepare your master so it passes the first time.

5. Accounting and audit.

This is how you find out what happened. Look for how often statements arrive, how soon payment follows a statement, and your right to have the books examined. Then connect it to the first term: if statements stop, does the film come back to you?

An audit right you never use still does its job. It tells the other side that someone may check.

Before the offer comes.

You do not need us to read an agreement. You need an hour, this list and a lawyer.

Where we come in is the delivery schedule. We master DCPs in Austin, check them frame by frame, and send a written report on picture and sound. Your film stays on our machines. If an offer is on the table and the list of files looks long, send it over and we will tell you which parts we make and who makes the rest.

If there is no offer yet, you do not need us yet either. Get the film in front of people. The screening guides are free, and a room full of strangers is still the best argument a film can make.