Fiction Notes » contracts

Book Contract Essentials

Darcy Pattison — Tue, 11 May 2010 13:49:22 +0000

Ring! Ring!
You answer the phone and the most amazing thing happens. An editor says, “We’d like to publish your story.”

Squeals of joy! Oh, Frabjous Day!

The editor mentions some basic terms of the publication agreement, but you’re so excited you can barely pay attention. Then, the editor says, “Do these terms sound reasonable?”

Do yourself a favor and say, “Yes! I want to work with you, but I’m too excited to think straight right now. Let me write down these details and get back to you tomorrow.”

You Have Options

Contract savvy–and professionalism–begins with the idea that you have options.

The Option of Time to Think: Your first option is that you have time. Signing a publishing contract is a complicated process that you don’t want to rush into: the contract you sign will govern all dealings with the publisher about this book from now on. It’s too important to be impulsive about it; instead, be professional. The decision to publish your book has taken a great deal of time and thought; editors will respect that you need time to consider a contract.

The Option of Negotiation: Your second option regards how you will approach the contract process: by yourself, with the guidance of a literary lawyer, or with an agent.

Yourself. Many authors want to handle every aspect of their publishing career, including contracts. The main advantage of handling contracts yourself is that you will be in control: that’s great if you’re successful, and frustrating if you aren’t. But it’s a conscious choice.

If you fall into this category, then you need to learn everything you can about contracts. Study model contracts which are available from several author’s organizations or in books. After looking at just a few contracts, you’ll see that each publisher words things slightly different, but overall the clauses are similar. By the time you read about contracts and study model contracts, you’ll start to understand what is negotiable.

Besides studying contracts, you should read some basic business books about negotiations. Contracts are often a matter of give and take: I’ll agree to world rights instead of North American rights if the advance can be increased by this much. You’ll need to give reasons for your requests, learn to listen to what the editor is saying in response. Learn when to stand firm and when to agree.

One disadvantage of negotiating a contract yourself is that you begin with a boilerplate (standard) contract; literary agencies begin with the basic contract that the agency uses with that publisher, which is always a better beginning point. You can overcome this, especially if you work with the publisher on successive books, but it is something to consider when deciding how to approach a contract.
Literary Lawyer. Many authors feel that their job is the creative part of publishing and they turn to lawyers for help with legal issues, including contracts. Your local lawyer is unlikely to have direct experience with the ins and outs of this type of contract: you need a literary lawyer who specializes in literary contracts. Check with various writer’s groups for recommendations. A literary lawyer either just review the contract and suggest changes or s/he can negotiate the contract for you.
The advantage of this strategy is that you get expert advice, but your financial costs are limited to a one time fee. However, you don’t get the on-going advocacy of an agent.
Agent. When authors think of getting help with their career, an agent is often the first place they turn. A literary lawyer helps with the legal aspects of publishing; an agent often helps with the legal and business aspects, as well as advising you about your career in general and being your cheerleader.

Agents act as matchmakers: your story gets hooked up with an editor who loves it. Once the match is made, they read every single word of a contract. Good agents know which clauses can be negotiated with each publisher and will work to get you better terms. First contracts are unlikely to be much larger advances, but other clauses can be improved. Agents typically charge 15% commission on domestic sales and more on foreign sales because they have to split the commission with an foreign agent.

In addition to matchmaking and contract negotiations, some agents can help manage your career. They advise you which of your ideas is most lucrative, help arrange publicity, and generally act as your advocate. For help in choosing an agent, get recommendations from a friend, ask writer’s organizations for a list of those who specialize in your area, and ask if the agent is a member of the Association of Author’s Representatives (AAR), which sets professional standards for their members.

Can you “sell” your book, then bring in an agent? Yes, but then your response to the initial offer should be something like this: “Wow! I’m excited and I want to work with you. But I’ve been thinking about using an agent and I’d like a week or ten days to work that out.”

One disadvantage of agents is that they receive a percentage commission of the advance, the royalties and any other moneys–forever. If your book sells extremely well, you will always be splitting the profit with your agent. On the advantage side of the ledger is the knowledge that your agent will be your ongoing advocate with the publisher in any and all disputes.

Clauses, Clauses and Clauses

The Option to Ask for Changes on (Almost) Every, Single Clause. Your third options involves all those confusing clauses of the contract–many things are negotiable! These are the clauses of a typical contract, along with common changes requested by authors. The list is not all inclusive: if you are negotiating a contract yourself, you’ll want to search for other options as well.

Preamble: Gives the date, the parties involved in the agreement and the work involved.
Grant of Rights: Specifies which rights the author is granting to the publisher.
Delivery of Works: Specifies dates for delivery of manuscript in various stages, and what other materials must be delivered such as photographs or permissions.
Negotiation Point: If your book requires photographs, permissions or other expensive materials, try to negotiate a budget to pay for these. Otherwise, you must pay for them out of your own pocket.
Termination of Contract: Covers the conditions under which the contract can be terminated, including an unacceptable manuscript.
Negotiation Point: Typical clauses allow publishers to terminate the contract if the manuscript is “unacceptable.” The publisher should specify in writing what is unacceptable and allow the author a reasonable time to correct the work.
Warranties and Indemnities: Publisher ask you to state that you are the author of this work. Governs how lawsuits will be handled should problems arise.
Negotiation Point: Publisher should include the author in their insurance protection against lawsuits.
Copyediting, Proofreading and Correction of Proof: Specifies how and when copyediting, proofreading and correction of proof will occur.
Options: The publisher is granted the option to your next work.
Negotiation Point: Remove this clause when possible. The time frame for exercising the option should begin when a manuscript is submitted, not when the current book is published. For example, a picture book may not be published for two years. If the option begins when the current book is published, you can’t submit elsewhere for those two years. Limit the option to similar books and put time limits on the publisher.
Publication: Publisher agrees to publish the work in a specified form and within certain time limits.
Negotiation Point: Specify the time limit for publication. For picture books, the illustrator’s work schedule may mean a long wait. Sometimes, authors specify details of the published book. Promotion and advertising budgets can also be specified.
Advances: Specifies the amount of an advance and delivery schedule.
Negotiation Point: Make sure the advances do not have to be repaid for any reason except non-delivery of a manuscript. Many books never earn out the advance, so authors try to obtain the largest advance possible, knowing that it may be the only money they receive for the work.
Royalties: Specifies the royalty schedule for various versions of the work.
Negotiation Point: Royalties for trade publishers is usually based on retail price, not wholesale price (or net receipts); some smaller publishers offer net. You should just know the difference and be willing to accept it. Some authors are able to obtain an escalation of royalties, which means that when a certain number of books are sold, the royalty schedule increases.

Typical royalties for trade hardcover is 10% on the first 10,000 copies, 12 1/2% on the next 10,000 copies and 15% on all copies in excess of 20,000. If the work is a children’s picture book, the author and illustrator will split the royalties: 5%, 6.25%, and 7.5%. Paperback royalties run about half. Pay attention, too, to the deep discount rate, because some publishers sell a majority of their books this way. Typical royalties for net contracts may run 12-15% on the first 10,000.
First Serial Right: Specifies if an author retains these rights or grants to the publisher.
Subsidiary Rights–Print: Specifies publisher’s rights and responsibilities in licensing the work to book clubs, paperback editions, abridgments, condensations, magazines, etc.
Subsidiary Rights–Non-Print: Specifies publisher’s rights and responsibilities in licensing the work for dramatic, motion picture, television, audio, live theater, videogames, toys, calendar, etc.
Negotiation Point: Consult various model contracts for recommended percentages of division of income between the author and the publisher. In general, the author should be receiving more than the publisher.
Subsidiary Rights–Electronic: Specifies publisher’s rights and responsibilities in issuing and re-issuing the work in an electronic formatting.
Negotiation Point: Hotly debated for the last ten year, this clause appears in a variety of forms. Consult various model contracts for recommendations. Avoid giving the publisher rights to “all other electronic technologies and formats, whether now existing or developed in the future.” Pay attention to industry news for the latest on typical royalties here.
Foreign Licenses: Specifies publisher’s rights and responsibilities in licensing the work to foreign publishers.
Use of Author’s Name and Likeness: Grants and/or limits the publisher’s use of author’s name and likeness in publicity.
Accounting and Payments: Provides procedures and time schedules for accounting and payment of monies due under the contract.
- Negotiation Points: Avoid “basket accounting” (also called joint accounting or cross-collateralization”) Some contracts tie royalties and moneys for this contract to any other contract with wording like “or under other contract with the publisher.” These phrases, either in this clause or in the royalty clause, should be deleted.
- Negotiation Point:Also, ask for a “pass through” clause for any subsidiary rights payments. This means that if your royalties have earned out, the money will be “passed on” to you within thirty days (or time period you specify) after receipt by the publisher. Some publishers will easily grant this, while others will never grant it: you should always ask.
Author’s Copies: Specifies the number of free copies the author will receive.
Negotiation Point: We all want as many free copies as possible. But realistically, the publisher can’t give away copies, even to the author. Ask for more, but be content with what you can get.
Revised Edition Clause: Specifies how the publisher will handle a revision of a work. (Especially used in updating textbooks or books which need constant updating.)
Out of Print Provision: Specifies conditions under which a book is considered out of print.
Return of Manuscript: Specifies time frame and conditions for return of original manuscript.
Bankruptcy and Liquidation: Provides procedures for dealing with the publisher in case of bankruptcy or liquidation.
Suits for Infringement: Deals with dividing any money resulting from an infringement suit.
Governing Law: Specifies the state law which shall have jurisdiction in case of legal proceedings.
Successors and Assigns: Assures that if your publisher is bought out, the new publisher will be bound by this contract.
Waiver or Modification: Confirms that this contract is complete and binding.
Notices: Specifies that if any legal proceedings take place, there should be proper notification.
Agency Clause: If your agent negotiates the contract, they will include this clause which names the agent/agency as the receiver of moneys, which the agent will then forward to the author.
Non-Compete Clause: Some publishers ask for a non-compete clause which specifies that you won’t participate in any project that will compete with this work.
Negotiation Point: Delete this if possible. If the publisher won’t delete this, then make it as specific as possible: another novel of such-and-so-length featuring the same character. That way, your next novel isn’t tied up indefinitely. Read carefully the language here: some contracts give the publisher the right to wait until after the first book is published to decide about your next mss: in effect, your career is stalled.

Contracts are tricky; contracts are important. Whatever option you choose for negotiating your contract, you should continually be educating yourself about the clauses that govern your relationship with a publisher. Because everything about your book is governed by that contract. It’s a legal, binding document and you shouldn’t sign it without understanding it and negotiating the best terms possible.

Resources for Book Contracts

Kirsch’s Guide to the Book Contract: For Authors, Publishers, Editors and Agents. This book is out of print, but it’s the one that I still refer to. Find it if you can. Otherwise, look for a newer book.
Negotiating a Book Contract: A Guide for Authors, Agents And Lawyers.

Any other resources that you recommend?

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Don’t Sign that Book Contract Until –

Darcy Pattison — Mon, 29 Sep 2008 13:03:05 +0000

A friend is having problems with a landlord and I advised her to pull our her contract and go over it again in light of the problems. Likewise, in the author-publisher relationship, everything is governed by the book contract for your novel or picture book.

Don’t Sign That Contract Until —

You’ve Read and Understood Everything.

You should read every word of the contract and understand everything. Often, just two or three words can make a big difference. For example, the basket accounting clause. Your contract will say something about the publisher collecting the income from the sales of this book and sending it to you on a schedule. Be careful if it says something like this: “the income from the sales of this book or any other”. Those words, “Or any other” ties all your book contracts together. So, if you’ve got short sales on one book, they can pull income from the other book to make up the difference and you’ll never see any additional royalty checks. Read every word.
You’ve Compared it to Standard Contracts.
- Join the Author’s Guild. If you have a contract offer in hand, you’re eligible. They offer two services: the first is a publication which shows a standard contract, including negotiation points and fallback positions if the first suggestion for changes is not accepted. Second, you can send your contract offer to them and their lawyers will review it and suggest changes. It takes time, but most publishers are willing to give you that time if you ask.
- Read Kirsch’s Guide to Book Contracts. It also gives standard clauses and suggestions for negotiations. It’s a bit different from the Author’s Guild contract, but not much. The combination of the two is very helpful.
You’ve Compared Your Advance to Other Advances
Dori Butler has posted here about a great website where you can find comparisons of advances on picture book contracts.
Anyone know of a similar resource for novels?
Anyone want to start one?

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Math for Writers

Darcy Pattison — Tue, 02 Oct 2007 15:16:30 +0000

Tis the season for royalty statements.

When I get a royalty statement, I always try to pull out the contract (that legal document by which you live or die in this relationship) and check up. This time, I found a discrepancy in royalty rates on foreign rights. A polite inquiry has been made and things should easily be cleared up. The end result should be a supplemental check for me! Hurrah!

Sometimes, math for writers is fun!

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Book auctions

Darcy Pattison — Tue, 28 Aug 2007 15:08:00 +0000

Book auctions are the glamorous dream of most authors.

Alvina Ling, editor for Little Brown explains this mysterious process of acquiring a mss through a book auction in one of the clearest explanations I’ve seen

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Update on S&S Rights Reversion Clause

Darcy Pattison — Thu, 24 May 2007 20:51:00 +0000

This was sent to members of the Author’s Guild his afternoon. As you can see, The Author’s Guild still objects to the new S&S rights reversion clause.

UPDATE ON SIMON AND SCHUSTER

Simon & Schuster is irked that we went public with our information about their unannounced new contract language. They’ve sent a release (you can read it below) accusing us of “perpetrat[ing] serious misinformation.” That’s a heavy charge, so we went back and double-checked.

We stand by every word of our statement. Simon & Schuster’s release pretends that the argument concerns “print on demand.” That isn’t the issue. We like print on demand: we encourage publishers to sell books in every permissible way. You wouldn’t know it from reading its release, but Simon & Schuster already has the rights–as they have for years in their standard contract– to take advantage of print on demand and e-book technologies.

The issue is what happens when a book goes out of print, when the publisher is no longer selling it in meaningful numbers. Traditionally, rights then revert at the request of the author, who often is able to give the book a new life elsewhere. Simon & Schuster is trying to change the rules of the industry so that they never have to admit that a book is out of print.

We meant what we said in our press release and our alert to members:

Simon & Schuster’s new contract would indeed allow it to retain exclusive rights to a book even if it were no longer in print. Simon & Schuster?s contract says, “The Work shall not be deemed out of print as long as it is available in any U.S. trade edition, including electronic editions.” Having a book available for sale in some database, without the obligation to sell a single copy. is not keeping a book “in print” as common sense and the industry have defined that term.

Simon & Schuster would, under its new contract, be empowered to exclusively control your rights even if your books aren’t available for sale through traditional bookstores. E-book availability (read any good e-books lately?) would be enough to fulfill Simon & Schuster’s contractual commitments under its interpretation of “in print.” Roy Blount is plainly right, this contract would allow Simon & Schuster to squirrel away rights.

Simon & Schuster’s press release avowals about its promotional efforts as it pursues “incremental income” for backlist titles are not legally binding. Simon & Schuster goes on at some length about efforts to market backlist titles including “regularly review[ing] inventory opportunities with all our accounts” and engaging in the “distribution of online assets (cover, bios, synopses, chapters) and data feeds about basic information? on backlist titles to retailers. Whatever the merit of these efforts, Simon & Schuster carefully avoids committing to them on behalf of authors with books relegated to the backlist.
Simon & Schuster’s efforts to alter the true core deal of a trade book contract, that a publisher controls the right to sell an author?s book only so long as the publisher effectively exploits that right, demanded exposure. Agents reported to us that Simon & Schuster had slipped the change into its contracts without alerting agents to the alteration, which was quite subtle and easily missed. Agents also reported that when they discovered the change and questioned the publisher about it, Simon & Schuster played hardball, saying the clause was non-negotiable and wouldn’t be discussed. In its release, Simon & Schuster seems miffed that we didn’t discuss their new contractual language with them before exposing it to sunlight. Engaging in discussions with a conglomerate playing hardball while authors may have been unwittingly signing rights away would, in our view, have been irresponsible.

We welcome and will take Simon & Schuster up on its offer to discuss this matter. We hope to report soon that it has rejoined the ranks of publishers who behave as responsible stewards of their authors? copyrights. In the meantime, if you have an offer from Simon & Schuster, remember that the publisher has now said it will negotiate this clause on a book-by-book basis. If you’re fortunate, Simon & Schuster will offer you a reasonable out-of-print clause. (Feel free to discuss this with us or talk to your agent about the adequacy of the clause.)

If not, it’s in your interest to explore your options: other publishers have reaffirmed that they’re not following Simon & Schuster’s example. If you have a manuscript that may be auctioned, it’s in your strong interest to ask your agent to exclude Simon & Schuster imprints unless they agree before the auction to use industry standard terms. Here?s Simon & Schuster’s release in its entirety, which we forward to you at the publisher’s request. Feel free to forward and post this alert. The Authors Guild (www.authorsguild.org) is the oldest and largest organization of published book authors in the U.S.

—————– SIMON & SCHUSTER’s OFFICIAL RESPONSE

TO OUR COLLEAGUES IN THE AUTHOR AND AGENT COMMUNITY

The Authors Guild has recently perpetrated serious misinformation regarding Simon & Schuster, our author contracts and our commitment to making our authors? books available for sale. Unfortunately, these distortions were released by the Authors Guild without their having undertaken any effort to have a dialogue with Simon & Schuster on this topic. In recent years, Simon & Schuster has accepted, at the request of some agencies, contract language that specifies a minimum level of activity for print on demand titles. Our experience with the current high quality and accessibility of print on demand titles indicates to us that such minimums are no longer necessary. Our position on reversions for active titles remains unchanged. As always, we are willing to have an open and forthright dialogue on this or any other topic.

When considering this issue, we ask you to please keep in mind these important points:

Through print on demand technology, publishers now have the ability, for the first time in history, to actually fulfill the promise which is at the core of their contracts with authors– to keep the author’s book available for sale over the term of the license. We view this progress as a great opportunity to maximize the sales potential for slow moving titles, and some of the best news for authors and publishers in a long time. The potential benefit for all concerned in incremental income for the publishing partnership far outweighs any imaginary negatives purported by the Authors Guild.
We and others are investing heavily in digitization so that authors and publishers can reap the maximum benefit of publication over the long term. New technologies including print on demand will extend the life of a book far beyond what has been possible in the past. Contrary to the Authors Guild assertion, using technologies like print on demand is not about “squirreling away” rights, nor does it mean that “no copies are available to be ordered by traditional bookstores.” Print on demand is simply a means of manufacturing a book, making it widely available to retailers and consumers. Publishers must and will continue to invest in sales and marketing organizations that work on behalf of its books regardless of how they are manufactured.Among the activities that publishers regularly undertake for backlist titles:
– Keeping them available for sale everywhere books are sold, through brick and mortar and online stores.
– Our Sales team regularly reviews inventory opportunities with all our accounts.
– Distribution of online assets (covers, bios, synopses, chapters) and data feeds about basic information to both online and traditional retailers.
– Books are cataloged and regularly featured and solicited in category promotions.
– Re-promotion of books to tie in with seasonal and current events.
– Re-promotion of an author?s backlist titles together with new frontlist releases.
Print on demand, digital archives, and virtual warehouses support greater flexibility and effectiveness in making books available. Simon & Schuster has already had instances where a high level of sales activity of print on demand titles has led us to go back to press for larger quantities.
Most importantly, we hope you know that we view authors and agents as our partners in the publishing process. We have always been open to discussion and negotiated in good faith at every point in the life of a book.

Please feel free to contact us if you have any questions. May 21, 2007

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S&S Reacts to Objections

Darcy Pattison — Sat, 19 May 2007 14:03:00 +0000

This is the update that the Author’s Guild sent out about the Simon & Schuster proposed contract regarding the reversion clause. A quick update on Simon & Schuster’s rights grab:

S&S has fallen back some, now saying they’ll negotiate regarding the reversion of rights clause “on a book-by-book basis.” They also accuse us of an “overreaction.”

Their official statement follows. Agents are angered by Simon & Schuster’s gambit, according to this piece in Publishers Weekly. Here are links to other stories that have run:

1. AP (via Herald Tribune)

2. New York Times

3. Publishers Weekly (the other PW story on S&S) We’ll keep you posted on further developments. Have a good weekend. Feel free to forward and post this message in its entirety. The Authors Guild (www.authorsguild.org) is the nation?s oldest and largest organization of published book authors. *************************************************************

Simon & Schuster’s official reaction, from Adam Rothberg, VP for Corporate Communications: We are surprised at the overreaction of the Authors Guild to Simon & Schuster?s contract.

We believe that our contract appropriately addresses the improved technology, increased availability, and higher quality of print on demand books, and reflects the fact that print on demand titles may now be readily purchased by consumers at both online and brick and mortar stores. We are embracing print on demand technology as an unprecedented opportunity for authors and publishers to keep their books alive and available and selling in the marketplace in a way that may not have been previously possible for many authors, and are confident in the long term it that will be a benefit for all concerned. We would also like the author and agent community to know that, when necessary, we have always had good faith negotiations on the subject of reversions, and will continue to on a book-by-book basis.

*************************************************************

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Author’s Guild v. S&S

Darcy Pattison — Thu, 17 May 2007 16:29:00 +0000

The Author’s Guild sent this message to its members on 5/17/07.

I’d be glad to discuss contracts in general, but specific questions about this issue should be directed to the Author’s Guild.

“Simon & Schuster has changed its standard contract language in an attempt to retain exclusive control of books even after they have gone out of print. Until now, Simon & Schuster, like all other major trade publishers, has followed the traditional practice in which rights to a work revert to the author if the book falls out of print or if its sales are low. The publisher is signaling that it will no longer include minimum sales requirements for a work to be considered in print. Simon & Schuster is apparently seeking nothing less than an exclusive grant of rights in perpetuity. Effectively, the publisher would co-own your copyright.

The new contract would allow Simon & Schuster to consider a book in print, and under its exclusive control, so long as it?s available in any form, including through its own in-house database — even if no copies are available to be ordered by traditional bookstores. Other major trade publishers are not seeking a similar perpetual grant of rights.

We urge you to consider your options carefully:

Remember that if you sign a contract with Simon & Schuster that includes this clause, they?ll say you?re wed to them. Your book will live and die with this particular conglomerate.
Ask your agent to explore other options. Other publishers are not seeking an irrevocable grant of rights.
If you have a manuscript that may be auctioned, consider asking your agent to exclude Simon & Schuster imprints unless they agree before the auction to use industry standard terms.
Let us know if other major publishers follow suit. Any coordination among publishers on this matter has serious legal implications.

Feel free to forward and post this message in its entirety.” The Authors Guild is the nation?s oldest and largest organization of published book authors.

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