Publishing Ins and Outs: Proceed with Contract Caution

PUBLISHING INS AND OUTS: PROCEED WITH CONTRACT CAUTION

Long hours and late nights of pounding the keys have finally resulted in something monumental–a book! You’ve finished your manuscript and even scored interest from a publisher or two.

What’s not to like? You could get used to this author life.

But wait! Before you start counting those dollar signs in your bank account without even a page in print, you want to think carefully about signing a publishing contract.

When those papers are shoved in front of you, adrenaline runs high, and business acumen tends to flow out like a tipped over bottle of ink that will blot your manuscript if you’re not careful. In an internet age, publishers have to be shrewd to stay afloat–and you should match their wit.

Deducing Right Angles

Know your rights. Specifically, publishing involves an all-out rights grab. Make sure that you’re well informed to give you traction in this game of tug of war. Rights are divided into these general categories:

• Media- hardcover or softcover book, ebooks
• Length of time- term for rights is typically for the life of the copyright (usually the life of the author plus 70 years)
• Territory- US and Canada, foreign
• Subsidiary- dramatic, audio, merchandise, reprint

Expect to sell basic rights for print copies of your book, including hardcover, softcover, and ebooks. Restrict these to North America or the English-speaking world (sometimes this excludes Australia). Retain all other rights or negotiate for them.

Subsidiary rights cover every form of the book that is not the physical book itself. These include dramatic rights–like movie and tv, audio, and even merchandising rights (you can dream, right?) Reserve as many of these rights as possible so that you can sell them to an experienced publisher for each right.

Check out your publisher’s expertise with international markets before granting them international rights. If they are not experienced in selling rights to other countries, reserve those rights so that you can contract with a different publisher for foreign rights. If you want to give your publisher a chance with international rights, sell those rights for a shorter period of time than North American rights.

Describing the Work

Even the most obvious details of a publishing contract should be scrutinized closely. Tweet this

Beware of Warranties

In the warranty section, publishers want you to masquerade as a mind reader, asking you to promise that the book doesn’t invade privacy, violate anyone else’s copyright, or extend libel. If a random sentence in the book turns out to violate one of these promises, your contract is breached. While you would never want to intentionally violate someone’s copyright or break laws of privacy or libel (remember, truth is a defense to libel), sometimes those things are hard to define. Protect yourself in the warranty section by requesting language that narrows liability–such as the phrase, “to the best of the author’s knowledge.” Exclude any changes made by the publisher from your warranty.

Indemnity is often neatly tucked into a warranty clause. Take out your favorite virtual highlighter and go to town on this next point: authors should NEVER indemnify publishers. By doing so, you are putting your entire net worth on the line for a professional entity that likely has far greater legal resources and capital than you. A publisher can handle potential liability—don’t martyr your savings for them.

Ask to be included on their media insurance policy, or at the very least to cap your liability if any suit should arise. You’ll also want to limit royalty withholding if there’s a threat of litigation–publishers like to hogtie your royalties if they even sniff conflict in the air. Specify that settlement requires the author’s reasonable consent.

Delivery And Acceptance

You know that saying “beauty is in the eye of the beholder?” Yeah, you don’t want your publishing contract to work like that. Specify that the acceptance clause for your book doesn’t give the publisher the right to reject your book without good reason. Whether they think it’s a beautiful masterpiece or a stinky piece of rubbish shouldn’t matter once they’ve signed on the dotted line. They’re obligated to pay up unless they can contrive a good reason not to. Don’t give them a way out of ponying up your advance.

As you might guess, an editor’s job is to edit. But sometimes they don’t want to edit. Sometimes they think a manuscript presents too much work and they’d rather toss it. Make sure that’s not an option on your manuscript. Include a phrase in your contract that says the author has the right to revise based on the editor’s critique. That way if the editor really despises your work, you get a chance to make things right rather than being tossed out like a newspaper ad.

Raking in Royalties

Ah, payday.

The dream publishing contract comes with a fat advance and hefty royalties to boot. It usually doesn’t play out like that, especially for a first-time author. First-time authors should expect an advance from $2,000-20,000 and 5-7% royalties on softcover books. Hardcover books usually bring royalties from 10-15%. Ebook royalties are around 25%, so even though ebooks retail for lower than print books, an author may stand to make significantly higher royalties.

Note that you won’t receive royalty payments until you’ve paid back your advance through royalties. On the other hand, if your book doesn’t sell a single copy, your advance should be yours to keep—no refunds required. Make sure your contract specifies that you are not responsible for repaying your advance should your book fall short of projected sales.

Will the publisher pay you on gross or net sales? This can make a sizeable difference. If your publisher subtracts costs like printing, distribution, and retail discounts, the fancy number crunching can slash your profits in half. Royalties should be calculated as a percentage of the Suggested Retail List Price (SRLP) of the book, not based on a discounted retail price.

Remember that your agent will likely skim 10-15% off your royalties as payment for securing the book deal in the first place. After a book earns out (meets its advance), you’ll receive royalty checks regularly as long as the book is in print and selling.

Option and Non-Compete Clauses

As gratifying as it might be for the publisher to option rights to your next book, this is one gift that you’d rather not open. You don’t want to be tied to this publisher for your next book deal—whether it’s a love or hate relationship, you want to be free to shop around. If the publisher is offering you a multi-book advance, that’s another story. Money upfront is a good thing. Restrictive option clauses that limit your future book earnings are not.

Non-compete clauses can be even worse for your future writing. They can derail your entire literary career. This clause restricts your ability to sell books on a similar topic that would compete with your prior published work. It’s broad enough to be construed in really damaging ways. If your publisher wants a non-compete clause, hire a literary attorney to fine tune your contract and protect your interests.

Advice is intended for general interest only. It does not substitute for legal advice from a licensed attorney. Hire an experienced agent or a literary attorney to represent you in publishing negotiations.