Do You Understand Your Publishing Contract?

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Traditional Publishing Contracts – Part Three of a Series
Signing a “Standard” Publishing Contract can have serious consequences for authors. A publisher’s standard agreement could contain a one-sided non-competition clause that prevents the author from using material from his manuscript in day-to-day business, such as blogs posts, magazine articles, even tweets. Or a clause in the contract might state that the author is prohibited to produce another work that competes with the title under contract without prior permission of the publisher. Well, what authors do with their time is their business, isn’t it? Shouldn’t they be able to write other books, for themselves or for other publishers? Are they slaves of the publisher?

Read the examples of book contract clauses here and in number two of this series (compare
them with your own contract) and find out “what it means” to you as the author:
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Publication and Revised Editions:
In some instances the book project never gets off the ground and without appropriate contract provisions, it may end up in legal limbo. What happens to the rights in the book in those events? Do the rights revert to the author? Do they remain with the publisher? What about revised editions? Will they be considered a new book? How will royalties be calculated on these newer versions?

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Competing Works:
“The author shall not publish any book on the same or similar subject matter that would directly
compete in the marketplace with sales of this manuscript. The author shall not undertake to write
another book for another publisher until the manuscript is delivered.”

What it means: If you have a contract for any type of cook book, say one about vegetarian
recipes, you cannot write a barbecue cook book and offer it to the producer of George Foreman
barbecues, and even a baking book, offered to another publisher who is specialist in bake
recipes is out of question.

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Unsatisfactory Material:
“If the Material for a given Book is not, in the publisher’s sole judgement, satisfactory in all
respects, the publisher may terminate this agreement upon written notice.”

What it means: The Publisher can end the deal for pretty much any reason it sees fit – as the
contract clause has no specific criteria to determine – or for no reason at all…

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Marketing:
“The Publishing House will also provide marketing/sales services for your book; this involves
handling sales to bookstores and direct mail sales.”

What it means: This unprofessional publisher has no clue about what’s involved in marketing.
He makes the author believe that delivering a book which is ordered from a bookstore or from
their website means marketing. Delivering is not marketing! Selling is not marketing! The problem is that when you enter into the publishing agreement, you don’t know whether your current book will sell well, and whether the publisher will do a good job marketing it.
The author should insist to have the publisher establish some sort of marketing plan in advance
and this plan should be part of the contract so that the author has some recourse should the
publisher not promote the book as originally discussed.

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General Provisions:
“In the event of bankruptcy or liquidation of Publisher for any cause whatever, Author shall have
the right to buy back the publications at fair market value to be determined by agreement or
arbitration, and this Agreement shall terminate. If Author does not purchase remaining copies of
the book, the representative of Publisher shall have the right to sell same at the best obtainable
price without payment of royalty to Author.”

What it means: …. this Agreement shall terminate: there is no set time limit. It can terminate in
three days, three weeks, three months. It is the sole decision of the publisher / liquidation trustee.
And the author does not get any compensation whatsoever, if the publisher goes bankrupt, while
the author is in vacation and who doesn’t know that an agreement is terminated.
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Indemnity:
“The author shall indemnify and hold the publisher harmless from any losses, expenses,
settlements, recoveries, or judgement arising from or related to any claim, action or proceeding
which would constitute a breach of author’s representations and warranties, especially to hold
the publisher harmless against any expenses incurred, including counsel fees, in connection
with any claim, demand, action or proceeding against Publisher or any other person, firm or
corporation selling the Work”

What it means: The author has to reimburse even third parties, such as movie companies, TV,
magazines, firms or corporations who reprint excerpts or selling the work and even subcontractors
of the publisher for expenses in any claims. Publishers will use lawyers to get money it feels it is owed, but not use lawyers to protect the author in case of being sued (for libel, copyright issues etc.). Publisher takes the lion’s share of the profits, but doesn’t make any effort to protect the acquired work from any lawsuits, so the author takes all the blame and financial burden. Example: Some books involve not only original writing, but also quotes from other sources, photographs, illustrations etc. Such materials should be licensed by an agreement in writing from the owner of the rights to such materials, and should be done by the publisher as he is the one profiting most from the book’s success.
Authors could face continual threat of action against them by the publisher at any time and no
definable cause – according to some clauses in publishing contracts. Such penalties could
include:

• refusal to publish
• withholding payment due
• refusal to extend time for delivery pay advances, and pay royalties
• reimbursements for advances or monies due

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Option on Next Work:
“Publisher shall have the exclusive option to acquire upon mutually agreeable terms the publishing rights to the next (i.e. written after the work) full-length work written by the author. The author shall not submit the said next work to other publishers, nor seek offers from or negotiate with others, with respect thereto.”

What it means: Any book that the author writes after delivering the manuscript to the publisher
has to be offered to him first – and only when the publisher refuses, the author is allowed to pitch
another publishing house.

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Out-of-Print and Reversion of Rights:
“In the event that after three years from the date of first publication, the work shall not be in print
and for sale in any edition by the publisher or any of its licensees and after written notice from the
author shall not within six (6) months be reprinted by the publisher or a licensee and offered for sale, (unless prevented from doing so by circumstances beyond its control) then in either of these events, the author shall have the right to terminate this agreement and upon written notice to that effect by the author to the publisher, all rights granted under this agreement shall revert to the author, subject to any outstanding licences and the publisher’s continuing right to participate in the proceeds thereof”.

What it means: The publisher alone decides if a book it “out-of-print” – which can be after three
years or never, as he can easily put the book on POD (print-on-demand), which means the
book is available and “in-print” indefinitely.
What events kick off the termination other than merely the book being declared “out of print” by
the publisher? What are the author’s and publisher’s rights in the event of termination? Can the
author get a complete list of outstanding licenses and deals made by the publisher? What are
the author’s rights to buy inventory? Who owns the rights to the work in the event of termination?

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Conclusion
Don’t become a slave of publishers!
Standardized contracts could be powerful negotiation tools. However, some authors will simply sign them, without even asking questions. These “standard” book contracts may have unexpected and unfair consequences for authors and their work. It is essential that authors approach the negotiating process with both, knowledge of their rights as well as a broad vision about what may happen to the book over the course of its publishing lifetime and deal with those potentialities within the contract.
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Do use the comprehensive Book Contract Checklist by Attorney Lloyd J. Jassin!
It will help you to prepare for a meeting with your contract lawyer, to check out your publishing contract in all details and to list your amendments you might have for your publishing contract.

As J.A. Konrath wrote in his blog: “The Big 5 are in such lockstep when it comes to this boilerplate contracts, they have effectively created a unified front. In other words, there is simply no other option because the Big Publishing Cartel have the unfair-contract market thoroughly cornered.”
Don’t accept clauses in “standard” book contracts, that denies you as an author not even
remotely equal power. You can better do on your own! Especially as nowadays authors have to market their books themselves – and more and more even have to deliver a fully edited
manuscript at their own cost.
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Resources:

Reversion of Rights

What Not to Miss When Negotiating Your Book Publishing Contract

Ten Key Negotiating Points

Frequent Asked Questions

Unconscionability Cases

Legal Corner for Authors, Levine Samuel, LLP

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