In a superpower battle, Scarlett Johansson is suing the huge Disney corporation, alleging it breached her contract by streaming her latest movie, Black Widow, at the same time as the film's cinema release.

Ms Johansson, who played the title role in Black Widow, had a contract with Marvel Studios for a share of the box office profits. The star claims her contract also guaranteed an exclusive theatrical release. (See Scarlett Johansson sues Disney over Black Widow streaming release, ABC News, July 2021.)

The movie opening was delayed more than a year due to Covid-19. During this time Marvel was taken over by The Walt Disney Company. Disney released the movie to cinemas worldwide in July 2021 and at the same time released it, for an additional fee, on its Disney+ streaming channel.

Lawsuit claims Ms Johansson is entitled to share of streamed Disney+ earnings

In accordance with her Marvel contract, Ms Johansson was paid $US20 million in box office earnings, but was paid nothing from the movie that was streamed direct to homes on Disney+. After its $US80 million opening weekend, cinema ticket sales dropped 67 per cent.

The lawsuit claims Disney earnt $US60 million from the rush of subscribers joining its Disney+ channel to see Black Widow, and Ms Johansson deserves a share. (See Periwinkle Entertainment Inc F/S/O Scarlett Johansson v The Walt Disney Company, Complaint Black Widow, July 2021.)

Disney shot back that Ms Johansson had already pocketed $20 million and pandemic times were tough. Disney argued it had complied fully with the original Marvel contract.

What would happen if this scenario arose under Australian law?

If this claim was being argued in Australia based on contract law, the outcome would depend on the exact wording of each contract involved. If the contract said Marvel controlled all rights in relation to the film, the studio could do whatever it liked with it, as long as it paid Ms Johansson her contracted fee and the box office percentage.

For instance, in Australia, say a business called Smallco is bought or taken over by Bigcorp. Smallco would remain a separate legal entity, and any contract it had entered into with individual customers, suppliers and other businesses would remain unchanged - unless the terms and conditions of the sale or takeover provided otherwise.

Australian contract law not governed by any single legislation

There is no single law covering breaches of contract in Australia. The law of contract is part of the English common law, developed over hundreds of years, and in effect imported into Australia courtesy of the 1827 Act of the British Parliament.

There is, however, various legislation which applies to contracts. The Fair Work Act 2009 covers contracts of employment and the Competition and Consumer Act 2010 relates to contracts under which "consumers" buy goods and services.

While there are Acts allowing courts to set aside contracts which are judged to be unfair, there is no legislation that establishes or codifies the general law of contract in Australia. Instead, the related Acts assume the existence of the law of contract at common law, and then modify or build on that in specific ways.

Did Disney intentionally interfere with Marvel's contractual arrangements?

It seems there was no contract between Ms Johansson and Disney, so her lawsuit is based on the concept of "tortious interference with contractual relations".

Ms Johansson's lawsuit argues that because no contract exists between Disney and herself, Disney's actions amounted to intentional interference with the contractual arrangements she had with Marvel and their agreed accounting procedure for the movie. She alleges that the claimed interference was a "tort", or civil wrong.

Tortious interference with contractual relationships is actionable in Australia. But, for such a claim to succeed here, a court must be satisfied on the evidence that there was some element of intention.

For example, this could be argued if the contract specified there would be a theatrical release of the film some weeks before it was released to streaming channels.

More actors considering action against studios which do not share streaming profits

It is possible that Ms Johansson may be relying on the prospect of subjecting Disney to adverse publicity and using that pressure to achieve a favourable settlement.

Other actors are reportedly considering taking similar action after their films were released by studio giants on streaming channels, but the actors did not get a share of the profits.

Geoff Baldwin
Contract disputes
Stacks Champion

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