Filmmaker Sanjay Gupta recalls a time prior to the turn of the millennium when the film industry functioned purely on trust, when intent mattered. The director of films such as Kaante, Shootout at Lokhandwala and Kaabil says equations between artistes and producer-directors were cordial and things functioned smoothly despite the absence of legal bindings.
“An actor would only be paid the signing amount—usually 10 to 15 percent of their total remuneration—prior to the commencement of a film. Nobody gave us dates or other such stuff in writing. That [verbal assurance] used to be sufficient,” Gupta tells Forbes India. There was no bad blood, he adds, and disputes, if any, were resolved amicably without approaching the courts.
Much has changed a quarter of a century later. Contracts today are drafted meticulously with clearly defined deliverables to protect the rights of all parties involved. And, should things turn sour, dragging collaborators to courts is not perceived as a sin if the recent wrangles are any indication (see box Legal Troubles).
A recent example of a public fallout over contractual expectations is the tussle between actor Ranveer Singh and Excel Entertainment. According to media reports, the production company founded by Ritesh Sidhwani and Farhan Akhtar has demanded ₹40 crore from the Dhurandhar star for walking out of Don 3, a film announced by the banner in 2023. The shoot hasn’t commenced yet and, as per reports, Singh claims he was not given a proper script and was treated unfairly. Excel wants him to compensate for the pre-production expenses, but the actor, reveal sources, is in no mood to budge, citing lack of contractual obligations.
Neither Singh nor Excel or their representatives got back on Forbes India’s request to participate in the story.
“There is a perception that Bollywood still runs on handshakes and informal understandings, but that is no longer accurate, at least not for mainstream productions. Nothing moves without documentation. The scale of money involved simply does not allow informality anymore,” says Dominic D’Souza, a media lawyer with over 20 years of experience with various production houses.
Agrees Shalini Bajpai, an independent media, entertainment and intellectual property (IP) lawyer. “Before there were so many modes, media and formats, contracts were loosely drafted. They used to be open-ended. It was simple—for instance, a talent will provide so and so services, on so and so dates, with so and so exclusivity, for a particular project,” she says. “Today, contracts are no longer personality-driven; they are balance sheet-led, and well-negotiated between both parties.”
Gupta points out that the shift from a ‘mutual understanding based on faith’ to ‘documented commitments’ happened around the 2000s with the corporatisation of Bollywood. He reveals massive contracts were drawn out for his 2002 film Kaante because they had American partners on board. Commercial clarity is integral to the paperwork today. “Now, our contracts run into hundreds of pages. People look at the finer details. That’s why we sign a Memorandum of Understanding (MoU) when we start a film because it takes anywhere between four and six months for all the legal people to be happy and convinced that they are safe. Only then are the contracts signed,” the producer-filmmaker explains.
In January, the Dutch-American global giant Universal Music Group acquired a 30 percent equity stake in Excel, valuing the company at ₹2,400 crore.
A director who does not wish to be named believes Excel could be under pressure from the music label to recover the money it claims to have spent on Don 3. “Excel has to follow Universal’s diktats. Suppose it claims to have stacked up a bill of ₹40 crore and the film is shelved, Universal has every right to demand accountability, question where the money has gone or ask for it to be returned.”
At times, conversations begin informally too—with narration sessions and creative discussions. Once both sides are committed to the project, they sort out the commercial aspects, including the fee structure, timelines, availability and promotional commitments. A term sheet or Letter of Intent (LOI) is signed thereafter. While the agreement may not detail every provision, it outlines the major business understanding between the parties.
Yash Suryawala, entertainment lawyer with Suryawala Associates & White IP, says the early agreements establish the terms that will govern the negotiations. “An LOI or MoU set the tone. Even if it is not the final contract, it records intent and broad obligations. It’s important for artistes to understand what they are committing to even at that stage,” he says.
Most production houses write the first draft of the agreement because they call the shots and outline how the film will be distributed—theatrically, online or a combination of both. The document then goes to the actors whose legal teams suggest changes or revisions.
Everyone is well aware about their rights today, points out Bajpai, who was previously head of legal affairs at Pen India Limited, a Mumbai-based media company specialising in film production, distribution and content aggregation. “They know where they stand and how it will affect them commercially. The contracts are more specific… for instance, in case of a breach, what would be the consequences and the judicial remedies available to them,” she adds.
Filmmaker Sajid Ali feels this clash might be a one-off thing. “It’s not the norm. We are a little traditional that way… there is some value of the word still, that if you make a commitment—even if it is verbal—you stick to it,” he tells Forbes India. “At least with the good people you have been working with for a while, you can be assured that if they verbally commit to something, it is going to happen. That has been my experience,” he says, adding that since he began working as a writer in the industry 15 years ago, everyone has been paid in tranches. It is a practice that continues even now. “Contracts are drawn on negotiations… I don’t think there is any fixed format. But I am sure it wasn’t this organised earlier.”
“Even if a contract allows you to sue for damages, calculating and recovering them is complicated. Film losses are not always easy to quantify in court,” says D’Souza. “Backend deals can become complicated because they depend on how profits are defined—gross, net, distribution share.”
Rathore agrees that going to court is the last resort. “Despite formal contracts, the industry remains relationship-based and mature. If an issue arises, actors and producers discuss it before taking drastic steps,” she says. Legal remedy was always available, points out Bajpai, but producers would not go behind a contract or enforce a particular clause. “It was more on a mutual good-faith basis.”
Disagreements are not just limited to actors and their film exits. The time gap between theatrical and over the top (OTT) releases has created fresh tensions. “There is a fixed window before which a film cannot be released on OTT after its theatrical release. So, there are negative covenants in the agreement placed by the exhibitors,” says Bajpai, who advises talent, producers and OTT platforms. “We have seen a couple of producers break that window period.”
Exclusivity conflicts also arise when actors sign multi-film deals with a banner. “I’ve dealt with cases where a talent is specifically blocked for four films with a particular production house. But the actor goes ahead and does films outside the contract. It is a breach,” says Bajpai. In such cases, the artiste needs to take a no-objection certificate (NoC) from the production house, which may demand some compensation in return. But the actor may default on paying the company and violate certain aspects of the NoC. “There have been instances of such disputes being settled out of court.”
The bargaining power while signing these contracts varies. Established actors can negotiate favourable terms while newcomers can be easily exploited. This shows the hierarchy play in the industry. “Production houses with trust, goodwill and IP ownership have a lot of power… as a result, the newbies are often stuck with non-negotiable terms, strict clauses and multi-film deals that can limit their growth,” says Suryawala.
Gupta, who has seen both eras, of verbal and signed deals, feels the contract system is better since one has everything in writing. “People can hold on to that piece of paper because the stakes are much higher,” he says, adding that contracts are getting more and more complicated as things evolve. However, he dismisses the notion that it is because of the scale of investments and big money riding in Bollywood. “It has got nothing to do with money… that is subjective,” he asserts.
Money, though, is a bone of contention between Excel and Singh. A compensation demand of ₹40 crore has led to a cold war amid other questions about loyalty, ethics and commitment. The filmmaker quoted earlier finds this spat “the stupidest thing” going on in Bollywood and feels “nothing will come out of it”. “Excel’s assertion that it has spent ₹40 crore even before the film has gone on floors sounds far-fetched. Do you spend that big an amount without even paying the hero? It’s ridiculous,” he says. “Excel is burning bridges with such fights. It is well aware it cannot do anything about it, because if it could, it would have gone to the courts by now.”
Rathore believes creative clashes in the industry are inevitable, but it’s better if they are addressed early before any major financial exposure, ensuring no losses for the parties concerned. Disputes will keep arising, but for the film fraternity, long-term relationships matter. “Producers need bankable talent. Actors need credible banners and distribution networks. Burning bridges publicly is rarely strategic,” says D’Souza.
The Don 3 episode is neither the first nor the last in Bollywood where the gloves are off. It’s the kind of script that the industry would want to stay away from, irrespective of the contracts.
First Published: Mar 23, 2026, 17:34
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