Book Contract Essentials


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. 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 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

Any other resources that you recommend?

  • Vanessa O'Loughlin
    May 13, 2010

    Super post – contracts can be really complicated, and they are all different! Another brilliant and invaluable book for getting to grips with the whole process is Literary Agent Carole Blake’s ‘From Pitch to Publication’
    If you don’t have an agent, the key is to ask for help and as you so rightly say, don’t rush into anything!

  • John Farber
    February 4, 2012

    My first textbook was published and sold well, then my publisher was acquired by a much bigger house that failed to push it aggressively. Someone apparently “gave” or allowed an Indian publisher to produce and sell “imprints” of my book, but I have never seen a penny of the royalties from the Indian version. It has my name as author but a new ISBN. It has even been reprinted. How can I collect for my just due?

  • Darcy Pattison
    February 4, 2012

    Unfortunately, I am not a lawyer, which is what you need.