Hollywood divided as 'morality clauses' return to contracts in wake of Weinstein

It was, the studio executives must have conceded, a costly mistake.

Kevin Spacey was lined up to star in the sixth and final season of House of Cards, Netflix's blockbuster political drama, but when Anthony Rapp accused Spacey in October of making a frightening sexual advance towards him in 1986, when he was 14, Netflix knew they could not go ahead.

Spacey was dropped from House of Cards and a forthcoming Gore Vidal film, shot for Netflix over the summer, was canned. Because he did not have a "morality clause" in his contract, however, Spacey was paid for both and the debacle reportedly cost Netflix US$39 million ($54m).

Since Harvey Weinstein's spectacular fall from grace in September, precipitated by allegations of rape - which he denies - from actress Rose McGowan, the floodgates have opened and a roll call of Hollywood studio executives and actors have found themselves out of work, their projects on hold.

The financial damage inflicted on the industry is so great that many studios are now beginning to insist on "morality clauses" - contractual agreements that mean a person could be dismissed without pay if they misbehave.

"If I'm a studio, I want the biggest, broadest morality clause I can get," said Ed McPherson, a specialist in entertainment law.

"But as an artist, I'm worried - what infraction falls into this? Some clauses mention the behaviour that would 'shock, insult or offend the community or public morals'. What does that mean?"

Morality clauses are not new - they were first used in 1921, when the public backlash against Paramount following the arrest of Roscoe "Fatty" Arbuckle on rape and murder charges drove Universal Studios, one of Paramount's competitors, to insert clauses insisting on good behaviour in their contracts. Any breach would permit Universal to terminate the agreement with five days' notice.

Now, the turmoil in Hollywood has forced studios to consider insisting on such clauses for all their contracts.

David Fink, a specialist in media and entertainment law, said that Hollywood executives were seeking to minimise financial risk in the current "Me Too" climate.

Fox is one of many studios the Hollywood Reporter says is trying to insert broad morality clauses into its deals. The clause states Fox can end any contract "if the talent engages in conduct that results in adverse publicity or notoriety or risks bringing the talent into public disrepute, contempt, scandal or ridicule".

Paramount Studios is also reviewing its codes of conduct, the industry journal said, while several smaller distributors are looking into legal clauses that would enable them to pull out of a project if a key individual - whether during or before the term of the contract - committed or is charged with an act considered under state or federal laws to be a felony, or crime of "moral turpitude".

Their use divides opinion. Some see it as insurance. Others feel it is too broad a brush. But Fink said the studios were wise to add the clauses.

"Studios have an investment - they don't want their project to be held hostage by somebody who did something wrong. Anybody in Hollywood right now is wise to be paying a lot more attention to their conduct."