Act III is known as the act of Resolution. It is the shortest act in the screenplay. It has approximately 30 pages or even less (90—120). All that has gone on before is heading to the highest point of dramatic conflict—the climax. The climax is the end of your screenplay. In Act III the problems you set-up in the opening must be resolved; your main character must experience a change; and your theme must be revealed. In Act III your main character makes a discovery about himself. He "sees the light" so to speak, and learns something about himself he didn't know throughout your screenplay. As he gains new insight about himself, your audience will feel satisfied.
All of the preceding scenes of your screenplay have been leading up to this climactic one. If the action escalates in the second act, by Act III the action explodes in the climax. When the climax is over, your story is over. Nothing else can happen. If you continue your screenplay after the climax, it will be considered anti-climactic. You'll be left with a weak ending and a dissatisfied audience. So be sure to end your screenplay when the climax ends.
However, after the climax there is a final quick scene which is known as a tag. It is referred to as the denouement. In the film, Cold Mountain, the denouement is not when Jude Law and Nicole Kidman, who played the romantic leads, apart for four years, finally get together, make love. This is the climax. The denouement is seeing a child years later which is their love child. It's the scene following the climax.
The denouement is like tying the story up in a neat package with a bright red ribbon. It is the "and then they lived happily ever after." In a detective story the denouement is after the mystery has been solved and you see the detectives having a drink together happy about solving the case.
By breaking your screenplay down into three acts it will help you develop your scenes in the right structure. It allows you to deal with a smaller unit of work and gives you a Blueprint for Screenwriting for each act.
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