INDEPENDENT DISTRIBUTORS
These guys take the cake! (Literally!) One of my film making friends says, " 'You can't have your cake and eat it too,' applies to film makers more than to any other folks." You get to know independents real well, because they're the ones you're going to be dealing with the most, especially early on in your career.
An old friend of mine says, "All distributors have the same mother!" He means, in a funny sort of way, that they're all the same. And yet, there are styles and personalities that defy human description among them. Still, when you first get introduced to them, you may form the impression, "What a wonderful bunch of guys!" I'm not being facetious, they're usually that way until you deposit your negative with them! (After that try to get them on the phone!)
"The contract" means nothing with independent distributors, so don't spend too much time and effort fine tuning it. And whatever you do, don't get an entertainment attorney involved in reading their contracts (especially if they recommend one.)
Just make sure that they don't get ahold of your negative elements! Give them only copies -- VHS video -- they don't use anything else anyway when they go to the film markets. Get some sort of advance, even if it's $25,000!
That keeps them honest. Without the negative elements, they won't dare cheat you, because they'll never see their money, right?
When they bring you proof of sales contracts for foreign territories, domestic home video deals and so on, and you find out that they're performing for you, then release to them the required "masters" only, so that they can make deliveries. It's better that you make the necessary masters and prints, because the quality will be better too, since it's your film and you won't shortchange yourself on that.
No matter how careful you are, you're going to be gouged, a little. Don't let this bother you too much, just remember my motto for the independent film maker: Your success depends on your capacity to be exploited!
They'll charge you for their dinners and entertainment at the CANNES film festival, they'll double charge you for certain items, overcharge you for others. The poster costs them $1,500, they'll charge you $2,500. It's okay. The contract will say you get 75%, they 25%; but if you end up getting close to 50%, you're ahead of the game -- it never gets any better.
That's the nature of the business, don't let it get you down!