Oversight and Rejection Risks

• Author: Robert J. Spjut
• Pages: 37-80

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Oversight and Rejection Risks

OVERSIGHT AND REJECTION

When planning any major, nonroutine transaction, a party should

● identify all benefits that might be realized, both as a result of the

transaction and other transactions that might be aected by that

transaction, and select and prioritize those it wishes to realize;

● identify and describe all of the tasks that must be completed for the

realization of the benefits chosen to be realized, and decide who is

expected to complete those tasks;

● identify and describe all the conditions and contingencies that will

facilitate and impede completion of such tasks and realization of

such benefits; and

● assign to one or both parties legal responsibility for the losses

that will occur if such benefits are not realized, such tasks are not

completed, such conditions do or do not exist as supposed, and

such contingencies do or do not occur.

When successfully completed, such eorts will have avoided the

creation of any of the hazards that errors in planning create. The

outcome of the planning phase or activities is successful, whether or

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not the time and cost of completing that phase may have fallen short of

expectations.

A failure to successfully complete one or more of the actions described

in the preceding bullets will be the result of one or more of the following:

● overlooking a benefit, task, condition, contingency, or responsibility

that was—but with hindsight, should not have been—omitted from

the plan for the transaction,

● choosing to include or to omit a benefit, task, condition,

contingency, or responsibility that, with hindsight, should not have

been included or omitted from the plan, and

● misunderstanding what a benefit, task, condition, contingency, or

responsibility includes, whether or not it was included or omitted.

The party that stands to lose in the scenarios described in the first

two bullets also causes the potential for loss: the party that will suer

any loss is that which overlooks or makes a decision it later regrets about

a benefit, task, condition, contingency, or responsibility—what will be

referred to as benefit, task, etc., remorse. The party that stands to lose in

the scenario described in the third bullet may but will not always be the

cause of the loss; the other party and third parties may also be causes. This

chapter describes the risks created by oversights and regrettable decisions

about benefits, tasks, conditions, contingencies, and responsibility. The

following chapter describes the risks created by misunderstandings about

the same.

The following cases illustrate benefit oversight and remorse,

respectively:

● Wildmon v. Berwick Universal Pictures1: Paul Yule, who was producing

a television program about censorship in the United States—in

particular, the battle over public funding of two artists, Andres

Serrano and Robert Mapplethorpe—asked Donald Wildmon, who

was a prominent figure in promoting censorship of the media and

arts in the United States and had campaigned against the public

funding of both artists, for an interview. Wildmon replied to Yule,

saying, “A contract would also have to be signed, containing a

substantial damage clause, forbidding the interview or any part of

1 803 F. Supp. 1167 (N.D. Miss. 1992).

Planning and Documentation Risks

38

the interview being used in any manner other than that stipulated

in the contract without my prior written permission.”2 The contract,

prepared by Wildmon’s attorney, read:

Mr. Yule agrees specifically to refrain from making the

interview available to any other media outlet including any

portions that are not used in the television presentation

made by Berwick Universal Pictures, London for Channel4.

In addition, Mr. Yule agrees that any material obtained

from the interview or derived from this interview shall not

form the basis of any other media presentation or [sic] in

England, the United States or any other country without

written permission from American Family Association.

Yule decided to broadcast the original Channel 4 program in the

United States. Wildmon objected. One benefit to each party was

control over use of the interview in later productions, and another

was control over the original program. If Wildmon’s benefits

included both, his consent was required for the broadcast in the

United States. Otherwise Yule was primarily at liberty to profit from

subsequent broadcasts.3 If the contract stated Wildmon’s intent at

contract formation, he overlooked control over rebroadcasting

of the original program as a benefit. The hazard to Wildmon was

his lack of control over repeated broadcastings of the original

program. His oversight of the benefit enabled the hazard to occur

(assuming he would have insisted upon controlling subsequent

broadcasts of the original production).

2 Id. at 1170.

3 Id. at 1171. While media releases were commonplace, contracts giving the photographed

or interviewed subject a degree of control over the use of the material were not, at least to

the point that forms had been published; the Wildmon contract was an attempt to specify

the benefit he expected to enjoy. When, after airing the program in Britain, Channel

Four sought to distribute it in the United States, Wildmon sued for damages, claiming

his consent was required to show the film outside of England. The court held that the

quoted language was ambiguous because it could be read “as preventing the distribution

of the interview in any form and any manner except for scheduled showings by Channel

Four in Great Britain [or] . . . as preventing the distribution of only the footage taken of

Wildmon to other producers and interviewers for use in other productions.” Id. at 1174.

The plainti’s motion for summary judgment was accordingly denied.

Oversight and Rejection Risks 39