It Starts with Contracts: Lessons in Contract Law from the Blake Lively/Wayfarer Lawsuit

Note: The Lively/Wayfarer lawsuit alleges serious claims of sexual harassment. This article focuses on the contract issues involved in the case and is not intended to diminish the severity of the underlying claims involved, the most substantive of which remain at issue and subject to an upcoming jury trial.

By now, many people are aware that Blake Lively, the star of Colleen Hoover’s film adaptation of It Ends with Us, filed a multi-count lawsuit against the film’s co-star and director, Justin Baldoni, and his production company, Wayfarer Studios. The crux of Lively’s complaint is that Baldoni sexually harassed her while filming It Ends with Us, and afterwards, he coordinated a smear campaign against Lively to avoid any negative publicity about his behavior toward her and others on set.

While Lively brought her claims under various state and federal laws, including Title VII of the Civil Rights Act of 1964, she also alleged that Baldoni’s behavior violated various contractual agreements. But as demonstrated by the recent court order granting summary judgment in favor of Baldoni and Wayfarer on one of the contract claims, the primary contract between Lively and Baldoni had a fatal flaw: it was never executed.

As the court order describes, Lively and Wayfarer initially exchanged an “Offer Letter” regarding Lively’s role in It Ends with Us. The Offer Letter outlined the specifics of the timing of filming, Lively’s compensation, Lively’s credit, and other basic terms. The Offer Letter was not intended to be the final agreement between Lively and Baldoni; rather, the parties agreed to later negotiate and execute a binding “Actor Loanout Agreement” (“ALA”) that would finalize any additional terms of Lively’s role in the film. One of the proposed terms of the ALA, which was not in the Offer Letter, prohibited any sexual harassment. Before filming began, drafts of the ALA were circulated, and they contained a section titled “Conditions Precedent.” The section stated that IEWUM (the special purpose entity Wayfarer incorporated to make the film) would not incur any of the obligations under the ALA until the agreement was executed. Lively did not sign the agreement, but filming began.

Just days before filming wrapped nearly nine months later, Lively still had not signed the ALA. But Lively’s attorneys nevertheless sent IEWUM a marked-up version of the unexecuted ALA, which included a new provision purporting to allow Lively to terminate the agreement if the company engaged in any sexual harassment. By this point, filming had nearly concluded and Lively had already experienced, as she later alleged in her complaint, sexual harassment by Baldoni. The parties continued to negotiate the terms of the ALA, but Lively ultimately never executed the agreement. She later sued Baldoni and Wayfarer for breaching the sexual harassment and retaliation provisions of the ALA.

In its recent decision on Wayfarer’s and Baldoni’s motion for summary judgment, the United States District Court for the Southern District of New York concluded that the ALA is not enforceable, so Lively is unable to sue for any alleged breach of its sexual harassment and retaliation provisions. The court reasoned that IEWUM unambiguously expressed an intent to not be bound by the ALA unless it was fully executed by all parties; therefore, the agreement was not enforceable notwithstanding the fact that Lively ultimately completed the film and was paid for her performance. The court’s order thoroughly analyzes various principles of contract law, including contract formation, waiver, notice and cure provisions and others. The order also highlights the fact that it is the intent of the parties that ultimately determines whether or not an agreement will be found to be enforceable.

The order also serves as a cautionary tale to artists about the pitfalls of beginning performance without a valid contract in place. Parties must always be aware of what the terms of draft and final agreements mean, and what the implications of taking certain actions in light of those terms might be down the road. While it may be tempting to forego what can at times be a drawn-out negotiation process between parties, the consequences of doing so can be severe, depriving artists of compensation, credit, or in Lively’s case, another avenue to hold others accountable for significant misconduct.

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The case between Blake Lively and Justin Baldoni is currently pending in the United States District Court for the Southern District of New York (1:24-cv-10049-LJL). A jury trial is currently scheduled to begin on May 18, 2026.