Term of Employment
The deal memo should state the start and completion dates of the project. Are you being hired for the duration of the show, weekly, or on a day-to-day hire? How many days prior to the start date does the production company need to notify you in the event of postponement or cancellation? After all, you are turning away other work being offered to you because the producer has booked you! Will you be compensated for delays? What about compensation for prep days, location scouting, and travel days?
Deferred Salary
Read "free." Do not seriously expect to be paid any real money after the picture is completed and "sold". You have better odds of winning the lottery! Whatever compensation you are going to get, you will receive at the end of each shooting week. After that, forget it.
So make sure you that you are willing to settle for whatever is offered to you up front.
But if you feel lucky, and decide to gamble on a Deferred deal, then play it for as much as you can get. Do not defer straight salary; if you have to wait and gamble, then it should be for at least double or triple your normal rate. Expendables, expenses, and equipment rental are not deferrable!!
Priority of Deferred Payment
Your deal should state that you get paid as quickly as anyone else. Investors who put up cash should not be paid off any sooner than professionals who put up their time and skill. Your services are equal to cash, since the producer would otherwise have to PAY for them.
The few times that I have had to accept a partially deferred deal, I have added a clause stating that all of the soundtracks that I record are my property and copyright until my contract is paid off in full -- only at that time will the ownership and rights to the sound recordings revert to the producer.
The producer is prohibited from entering into any agreement with any outside party that constitutes sale or transfer of ownership of the sound recordings until my contract is paid in full. That prevents a producer from legally selling off the film to a distributor, and then claiming that the amount of the sale was insufficient to pay off the deferred debt. The distributors purchasing the rights to the film always claim that any deferred contracts are between the crew and the producer.
I also record a copyright claim at the head of every tape or disk.
Ownership of the sound recordings serves as mechanic's lien and may give you a little more leverage to insure payment. But don't count on it. Lawyers usually only take your case if really big money is involved.
Most importantly in your deal memo, pay attention to who signs it. An approval by a production assistant is not considered binding by the producer. It must be signed by the producer if deferred payments are involved. The producer or a senior production manager must sign any deal memo. Make sure that the production manager is, in fact, empowered to make the deal.
The issue of deal memos is a complicated one, and this article should not be used in lieu of consulting with an attorney. Many fine line legal issues are involved, and the laws vary widely from state to state.
Be careful in what you sign and what you agree to! Make sure that the deal memo covers not just what the producer expects from you, but what you expect from the producer! The more specific, the better. If you are not using the services of a lawyer, then write everything out in plain, common day English. A judge is more likely to rule in your favor if the intent of the agreement is clear, even if it is not in legalese. When your agreement starts sounding like it was written by a lawyer, then legal loopholes are more likely to be applied.
Always get a signed copy of the agreement, including initialed pages and initialed cross-outs. Better yet, ask to take an unsigned copy of the deal memo home for a couple of days to look over. Explain that you never sign any contract without consulting with your lawyer. Even if you do not have a lawyer, that will give you a chance to show the agreement to a couple of seasoned professionals who might spot something fishy or badly misworded.