## Facts

- Art Buchwald wrote a story treatment titled *It’s a Crude, Crude World*, later retitled *King for a Day* (the work), about a rich, educated, arrogant, despotic African leader who comes to the United States and ultimately marries an American woman.
- Buchwald and Paramount Pictures, Corp. entered into a contract under which Buchwald transferred rights in the work to Paramount.
- The agreement provided that Buchwald would be paid only if Paramount produced a feature-length motion picture “based upon” the work; the contract did not define “based upon.”
- Paramount later produced and released *Coming to America* (1988), starring Eddie Murphy as a pampered but kind African prince who travels to America and, while there, experiences life without the usual trappings of wealth and status and falls in love with an American woman.
- Both stories were comedies involving an African royal figure in America, the character ending up in an urban American ghetto, a change in attitude away from royal entitlement, and a romance with an American woman.
- Both works also included a similar comic beat in which the prince uses a mop to foil an attempted robbery.
- It was undisputed that Paramount executives involved in the development and production of *Coming to America*, including director John Landis, knew about Buchwald’s work.
- Buchwald sued Paramount for breach of contract, alleging that *Coming to America* was “based upon” his work and that Paramount therefore owed him compensation.
- After the court found liability, the case proceeded to a damages/accounting phase addressing Paramount’s “net profits” definition and whether that provision could be used to reduce Buchwald’s recovery to zero.

## Issues

1. Whether *Coming to America* was “based upon” Buchwald’s work within the meaning of the parties’ contract, even though the agreement did not define that term.
2. Whether Paramount breached the contract by producing *Coming to America* without paying Buchwald under the “based upon” compensation provision.
3. Whether Paramount’s contractual definition and calculation of “net profits,” applied so that a highly successful film could yield no payable profits to the participant, was unconscionable and unenforceable in determining Buchwald’s recovery.

## Decision

- The court concluded that *Coming to America* was “based upon” Buchwald’s work for purposes of the parties’ agreement, triggering Paramount’s payment obligation.
- The court found Paramount liable for breach of contract for failing to compensate Buchwald after producing the film.
- In the damages/accounting phase reported at 13 U.S.P.Q.2d (BNA) 1497, the court held Paramount’s “net profits” definition and accounting approach unconscionable and refused to enforce the clause to deny Buchwald compensation.
- With the net-profits clause not enforced as written, the court moved toward a reasonable measure of compensation rather than Paramount’s claimed zero “net profits.”
- The matter later resolved by settlement before an appellate ruling on the unconscionability determination.

## Legal Principles

- When a contract uses an undefined term such as “based upon,” the court may construe it in light of the agreement’s language and context; the absence of a settled industry meaning can support treating the term as ambiguous and construing it by ordinary understanding and the parties’ deal structure.
- Proof that the defendant had access to the plaintiff’s work, combined with meaningful similarities in story elements and sequencing, can support a finding that a later film was “based upon” the earlier work under a compensation-triggering contract clause.
- Under California unconscionability doctrine (including California Civil Code § 1670.5), a court may refuse to enforce a contract clause, or limit its application, when the clause and the circumstances of contracting and performance produce an overly one-sided result.
- A “net profits” participation provision may be found unconscionable where the definition and accounting methodology operate so that even a commercially successful film can be reported as generating no payable profits to the participant, defeating reasonable payment expectations tied to success.

## Conclusion

*Buchwald v. Paramount Pictures, Corp.* held Paramount liable for making *Coming to America* based upon Buchwald’s *King for a Day* and, in the published damages ruling, refused to enforce Paramount’s net-profits definition as unconscionable, allowing Buchwald to pursue compensation outside the studio’s claimed zero-profit accounting.


Buchwald v. Paramount Pictures, Corp., 13 U.S.P.Q.2D (BNA) 1497 (1990)