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Contract dispute leaves major movie production in jeopardy

Hundreds of movies are made each year in Hollywood. However, film producers have recently created a trend of filming movies in Louisiana.

One of the most critical steps in making a movie, however, is securing the rights to produce the film. A company obtains the rights to a film by entering into a contract. However, if the terms of a contract are breached, the future of the film is at stake.

Two production companies are currently engaged in a contract dispute. An alleged breach of contract between director Robert Rodriguez and Overnight Productions might affect the upcoming release of "Machete Kills," the sequel to the 2010 film "Machete."

Overnight Productions was the production company for the 2010 film. In early 2012, Overnight Productions entered into a contract with Rodriguez and his production company, Quick Draw Productions. The agreement apparently granted Rodriguez the rights to produce a sequel to "Machete," titled "Machete Kills."

Overnight has now filed a lawsuit against Rodriguez's production company seeking to terminate its agreement, which granted Rodriguez the rights to make the sequel, as well as $2 million in damages. The lawsuit alleges that Rodriguez breached his end of the contract with Overnight by withholding tax information and budget figures. Overnight maintains that the violation these terms mitigates Rodriguez's rights to make a sequel.

In a contract dispute, breach of the contract can result in substantial financial harm to one or both of the parties involved in the transaction. In this case, If Overnight Productions' suit is successful, not only will Rodriguez and his production company have to pay a substantial amount in damages, but the company will no longer have any rights to "Machete Kills," which is already in production.

Source: NBC Latino, "New lawsuit against Robert Rodriguez could prevent release of 'Machete Kills'," Nina Terrero, Nov. 27, 2012

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