Avoid a Legal Horror Story: Contract Drafting Lessons from Terrifier
Author: Lindsay A. Compton
Date: December 17, 2025
What is Terrifier and Why Should You Care?
Independent horror films rarely break into the mainstream. When they do, the success can be dramatic—and sometimes legally complicated. The Terrifier franchise illustrates how rapid growth can expose weaknesses in contracts that once seemed sufficient, and how clearer drafting at the outset may help prevent costly disputes later.
Originally released as a low-budget independent horror film in 2016, Terrifier developed a devoted following through streaming platforms and horror fan communities. That devotion led to two sequels (with a third sequel on the way) that, combined, earned over $100 million at the box office, Terrifier 3 becoming the record holder for the highest-grossing unrated film of all time. With the success came expanded distribution, merchandise, and licensing opportunities, such as its collaboration with Universal Studios to bring Terrifier to Halloween Horror Nights in 2025.
What began as a small independent horror movie evolved into one of the most beloved horror properties with the most recognizable horror villain created in the past 20 years. Unfortunately, with that success came litigation.
Catherine Corcoran in Terrifier, 2016.
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The Terrifier Royalty Dispute
Public court filings indicate that Catherine Corcoran, an actress in the first film, has brought a lawsuit against the director and producers alleging breach of contract for non-payment of royalties owed under contract. According to the lawsuit, Ms. Cockran agreed to work for a modest daily rate of $100, with the understanding that she would receive a 1% share of profits derived from Terrifier and Terrifer’s merchandise.
The dispute centers on a key issue: the contract provides for royalties generated from “Terrifier,” but the contract does not define what the term “Terrifer” encompasses. When the agreement was drafted, the parties likely did not anticipate the scope of the franchise that would later develop. At the time, the meaning of Terrifier may have seemed obvious. Years later, with sequels, merchandise, and licensing deals in place, that once-clear understanding has become the subject of a costly legal dispute.
This type of conflict is common when contracts fail to clearly define terms, scope, responsibilities, and obligations that later become economically significant.
Litigation Often Begins Where Contracts End
Many lawsuits are not about bad intentions, but about unclear agreements. When contracts leave room for interpretation, parties may have genuinely different expectations about their rights and obligations. Once money is involved, those differences can quickly turn into litigation.
A well-written agreement cannot guarantee that disputes will never arise, but it can significantly reduce the likelihood of litigation by:
Clearly defining key terms
Narrowing the scope of the agreement
Addressing future revenue streams
Allocating risk in advance
Minimizing ambiguity that invites conflicting interpretations
In other words, clarity at the drafting stage often prevents conflict later.
Ambiguity and the Risk to the Drafter
Under general principles of contract law, ambiguous terms are often interpreted against the drafter of the agreement. This rule exists to encourage precision, fairness in drafting, and ensure there is a meeting of the minds between the parties. Unless the contract includes language stating otherwise, the party who drafted unclear provisions usually does not have the unclear language interpreted in their favor by a judge.
For businesses and creators, this means that failing to define important terms—or assuming that “everyone knows what this means”—can create significant exposure as the business grows.
Drafting with Litigation Prevention in Mind
Contracts are not just about memorializing a deal; they are tools for managing risk and preventing future disputes. Some best practices to employ while drafting a contract include:
1. Use Plain Language. There is no reason to over complicate the language. Clear, straightforward language reduces the risk of misunderstanding and makes the agreement easier for all parties to follow. Avoid overly long sentences and archaic legal phrases when simpler wording will suffice.
2. Detailed Definitions Sections. Do not assume the meaning of a term is obvious. Clearly define key terms, especially those tied to compensation, obligations, responsibilities, intellectual property, or revenue. A quick guide is to make sure you answer the basics: who, what, where, why, and how.
2. Forward-Looking Language. Anticipate growth where possible by addressing business expansion, new revenue streams, technological development, additional products or services, derivative works, merchandise, licensing, and new platforms. Alternatively, adding language that limits the scope of the agreement to
3. Ambiguity Allocation Clauses. If you are the drafter of the contract, include language stating that if a provision is deemed ambiguous, it will not be interpreted against the drafter. If you are not the drafter, check to see if the contract includes this type of language. If you are not the drafter and there is no term regarding ambiguous terms, do not ask for such language to be added. In its absence, it will be interpreted against the drafter.
4. Regular Contract Reviews. As times passes, contracts should be reviewed to ensure they still reflect current operations and expectations.
Uncertainty is often what fuels breach of contract litigation, each of these steps helps reduce that uncertainty.
The Terrifier lawsuit serves as a reminder that contracts drafted can have long-term consequences. What appears straightforward today may become contested tomorrow.
At Compton Law, P.A., we help individuals and businesses draft and review contracts with the goal of clarity, risk reduction, and dispute prevention. Investing in a well-written agreement on the front end can help avoid costly litigation on the back end.
If you need assistance with contract drafting or review, contact Compton Law to schedule a free consultation.
