The Muppets and Contract Law

The 'Stardard Rich and Famous Contract' in the Muppet Movie, via the Muppet wikiaI’ve recently had the great good fortune to see The Muppets (2011) (imdb | official site | wikipedia). Like the recent classic movie Shrek Forever After, it is very much a movie about contract law: indeed, both movies turn on cultural assumptions about the binding nature and literal enforcement of written contracts.

Warning: plot spoilers At the end of The Muppet Movie (1979) (imdb | wikipedia), the Muppets are hired by studio executive Lew Lord (played – in a splendid cigar-chomping movie-stealing cameo – by Orson Welles) under “the standard rich-and-famous contract” (pictured above left). It has the generally assumed form of contracts: it is long; indeed, it is vveerry long – it contains a multitude of clauses, and those terms are the heart of the new movie: The Muppets. Nancy Kim on Contracts Prof Blog mentions a few of the issues:

… the star of the new Muppets movie is a long, scrolled, fine print contract signed by none other than Kermit the Frog. The entire plot hinges on … a condition in the contract … A real live condition – but is it a condition precedent or condition subsequent? In addition, there are issues of nondisclosure (there’s oil under the theatre, but the evil Tex Richman isn’t telling). Is there a duty to disclose? When did Tex learn about the oil – at the time the contract was formed? Does it matter? Was Kermit tricked? Is the contract unconscionable? And finally, there’s the interpretation issue — the “theatre” is also called a “studio.” Is it the same building? Is there possibly a misunderstanding here?

In a very entertaining post about the movie and the legal issues it contains, Ryan Davidson on Law and the Multiverse points out that lots of commercial leases have a provision which will permit the tenant to purchase the property after a time, so the basic buy-out clause is not so unusual. But he has fun with the provision that the Muppets would lose the rights to their names if they lost the studio. No wonder then, that Adam Bonin on a list of things thrown five minutes ago refers to the “contract upon which Kermit failed to perform due diligence, highlighting the importance of hiring top-notch attorneys to protect one’s intellectual property”. And finally, my favourite line in the movie:

We all agreed, celebrities aren’t people.

Update: Disney announce new Muppet movie But will it feature any contracts, that’s what I want to know!

Bonus Link: Contracts Issues in Tim Burton’s Big Fish (2003) (imdb | official site | wikipedia).

What other movies are there out there that turn on contract law issues? Feel free to let me know in the comments.