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Copyright 2004 Tara K. Harper.  All rights reserved.

Tara K. Harper, FAQ:
Contracts

1.  Reading and Signing Contracts
2.  What Does "Boilerplate" Mean?
3.  Which Subsidiary Rights Should You Try to Retain?
4.  The Fine Print: Oddities and Confusionisms -- updated!
5.  Electronic Reprints, Publishing, and Versions
6.  The Bottom Line

Also:
Negotiating Contracts and Terms
General Issues in Negotiation

A Note on Freelancing vs. Fiction Writing

Also:
Additional resources for writers:  
ASJA position papers, SFWA sample contracts, etc.


1.  Reading and Signing Contracts

First and foremost, when dealing with contracts, be as careful as if you were signing away your house or livelihood.  Read your contract thoroughly before you sign it, and question everything you don't understand.  Have a lawyer look at your terms.  Have your lawyer explain the terms.  Your agent can tell you what the terms mean with regards to the publishing industry, but a lawyer can tell you exactly what you are signing.

There is always time to read before signing.  No matter how fast the publisher claims to need the signed contract back, once you turn the signed document in, that contract can sit for weeks or months before being signed on the publisher's end of things.  So go ahead and take the time you need in order to understand what it is you're agreeing to.

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2.  What Does "Boilerplate" Mean?

The term "boilerplate" refers, in general, to text which remains unchanged from one application to the next.  For example, the warranty statement for software products is often boilerplate--it doesn't change from product to product.

The term "boilerplate" is also used to refer to contracts.  However, contracts are agreements negotiated between two parties.  If a contract really was boilerplate, there would be no negotiation.  In that case, you would take whatever contract was offered to you, and you would sign it, because nothing in it would change no matter what you said or did to persuade the publisher otherwise.  The reality is that everything is negotiable--every term, every clause, every paragraph.

The question isn't really which paragraphs are boilerplate, but rather, which terms are negotiable and which terms are contract-breakers.  Money, schedules, book titles, translation rights and some other subsidiary rights--those are generally negotiable.  The terms that are not as negotiable--those depend on you and on your publisher.  How well-known an author are you?  How much money have you made the publisher in the past?  Does the publisher think those rights represent potentially successful products?  What kind of writing future do you have--ten other books planned in an already popular universe?

When you negotiate the terms of any contract, you and the publisher are agreeing upon the value of products that could potentially be developed from your ideas--your work.  The way you and the publisher value these potential products may be different.  Timing may also be a consideration--purchased rights have to be exploited in a timely manner or they become worthless to the publisher.  All of these things vary from author to author, publisher to publisher.  They will also differ depending on technological, industry, and publishing-management changes.

Recommendations Vs. Reality

It is easy for big-name authors and professional writing organizations to recommend that you retain all sorts of subsidiary and electronic-publishing rights.  The reality, however, is that, if you are a new author, you probably don't have much--and may not have any--clout with which to negotiate those terms.  Even if you are a mid-list author with a solid history of successful books, you might not have the kind of clout needed to negotiate certain terms.

Yes, you might have to accept less than you want in order to get published in the first place.  This is not because a contract is "boilerplate" and offered to all new authors.  This is because you are not yet valuable enough to the publisher to be negotiated with for more favorable terms.

There are many references, both online and in traditional media, which describe contract terms.  The Author's Guild has recently published what I consider to be for writers the definitive reference on contracts.  Another clearly written, accessible reference is listed at the end of this file.

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3.  Which Subsidiary Rights Should You Try to Retain?

Subsidiary rights include translations, abridgements, condensations, electronic versions, audio recordings, performance rights, and so on.  You will probably want to try to retain some of these rights (such as translation and electronic-version rights)--unless you are being adequately compensated for those rights in that contract.  Retaining rights such as translation and audio-recording rights, is not usually a problem, even for first-time authors.  However, retaining other rights, such as rights to electronic publishing and electronic versions, can be difficult, if not near-impossible battles.  (I can't say "impossible" battles because you always the option of retaining all rights; it's just that you might never be published in that case.)

There are other terms that you might also want to take a good look at.  For example, if you're going to sign a multibook contract, ask your agent to have the contract written so that there will be no joint or "basket" accounting of the books.  You might also want the contract to specify that author's approval is required for condensations, abridgements, and adaptations of your work.

I have resisted doing an adaptation of my books.  This process of abridging...
inevitably means performing surgery on myself.  It's in the book because I thought it
had to be in the book to tell the story the way I wanted.

                      - Scott Turow

All the talk about subsidiary rights might make you think that you've just got to try to retain all subsidiary rights.  However, thinking that you have to hold onto subsidiary rights simply to withhold them from your primary publisher is not the way to make a good business decision.  When you look at subsidiary rights, what you should be thinking about is not, "How can I hang onto this?" but rather this question:  "Who can best exploit those rights?"

For example, my publisher is almost certainly more capable than I am of producing a hard-cover or trade paperback version of one of my mass-market paperback novels.  It would be idiotic for me to try to retain rights to hard-covers and trade paperbacks.  And, much as I, myself, love oil painting, I am definitely not qualified to create book covers.  But even though I don't want to insist that I provide my own cover art, I do want input on covers.  I also want the right of approval on abridgements and condensations of my work--so that I can make sure that what I'm trying to say in my novels wouldn't get lost if my work was abridged or condensed.

If you can exploit some subsidiary rights better than your publisher, then certainly, try to withhold those rights.  If the publisher can exploit those rights better than you can, it is likely a better business decision to negotiate those rights into the contract you are already discussing with your publisher.

Or, you can think of it this way:  once the book is published, your work is finished.  After that, income from the sale of any secondary or subsidiary rights are "free" money--you do not continue to work on the book in order to earn money on that book.  (You do, of course, still have to pay taxes on your earnings.)

Are subsidiary rights lucrative enough to be worth the extra negotiation?  Yes, definitely.  For example, in a recent year, I earned more from foreign rights than I did from First North American rights through my primary publisher.  The extra money was a substantial, 5-figure amount, in the form of advances for various foreign editions of my work.  Even though my foreign agent took 15%, my standard agent took 10%, and the IRS took 48% after that, the money made the difference between my being able to remain a full-time fiction author or my having to take another science contract to tide me over financially to the next royalty check.

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4.  The Fine Print: Oddities and Confusionisms

Who Was It You Said Got Paid?
Performance Rights
Going out of Print and Reversion of Rights
Oh, the Oddities...

There are many details which are standard in the publishing industry, but which you might not have encountered in other contractual agreements.  There are details which are not specified at all in a contract, but which could have a profound effect on the way your books are marketed.  There are also oddities in which crossing out one term or another actually opens a loophole in your contract.  Some of the terms which struck me oddly or which raised questions in my mind are described here.

Who Was It You Said Got Paid?

When I first was offered a contract by my publisher, I took the document to a lawyer and had him go over it, clause by clause.  Then he sat me down, gave me a funny look, and said, "You do realize, that nowhere in this contract, does it specify that you, Tara, are paid any money."  I said, "Excuse me?"  I tell you, I started flipping through and rereading those pages as if they were on fire.

It turns out that contracts are usually written so that the publisher pays the agent, not you.  Your agent pays you out of what the publisher pays him--but that's not specified in the contract offered by the publisher.  If you have a written agreement between your agent and yourself, that is where it can be specified that your agent pays you what you have earned (less his percentage, of course).  My agent hadn't thought to remind me of this because it was standard policy in the publishing industry.  Needless to say, the first thing I did was sign a written agreement with my agent.

Performance Rights

Here's another example of an oddity--performance rights.  One of the issues that arose when electronic publishing first became viable was whether or not performance and dramatic rights included the right to develop electronic, animated versions of books.  That question has been settled somewhat, and electronic versions are now usually specified separately from performance rights.  But performance rights in themselves have always seemed a bit odd to me.  For example, look at the following sample contract paragraph:

"Exclusive right to license performance rights in the Work, including
dramatic, musical, radio, television, motion picture and allied rights,
subject to Author's consent.  In the event of the disposition of performance rights,
Publisher may grant to the purchaser the privilege to publish excerpts
and summaries of the Work in the aggregate not to exceed 7,000 words,
for advertising and exploiting such rights, provided, however,
that such grant shall require the purchaser to take all steps
which may be necessary to protect the copyright of the work."

At first glance, to reserve performance (dramatic, musical, radio, TV, etc) rights for yourself, you might be inclined to cross-out the entire paragraph.  However, doing so can apparently open a loophole that allows those rights to be exploited in another manner.  It's supposedly better to cross out only the first line of that paragraph, leaving the rest of the text intact.

That is not something you would know just by reading the contract.  You have to understand the industry and the contract as a whole to understand the implications of the change in that paragraph.  Loophole issues are yet another reason to have both a lawyer and/or agent negotiate and interpret (translate) your contracts for you.

Going Out of Print and Reversion of Rights

If you've sold print rights to a publisher, generally, those rights will revert to you when your work goes out of print.  Your contract will state this.  However, contracts do not, in general, specify anything about how it is determined that your work has gone out of print in the first place.  Reversion of rights dependent on the out-of-print clause, is subjective--it is open to interpretation.

Each publishing house uses different standards to determine when a book goes out of print.  At some houses, if the initial print run doesn't sell off within six months, the book is out of print.  And at some houses, if the initial print run doesn't sell off immediately, the book is considered out of print.  Some publishing houses will continue to sell warehouse stock over a period of time, thus allowing a book to remain in print, and thus possibly sell enough copies to eventually earn royalties.

You should ask your agent how your publisher will determine when your work goes out of print.  You should also make sure you understand what the publisher may do with remaindered work.

Finally, you cannot assume that your work is out of print and those rights have reverted to you.  You must have a formal acknowlegement from the publisher that, yes, indeedy, the book is actually out of print, and the rights they had previously purchased have now reverted back to you, before you can go out and try to sell the work again to some other publishing house.

In some cases, especially with series work, you may not want to do that.  Sometimes it's more advantageous to leave out-of-print books with the original publisher so that they can go back into print later, when you publish more books in that series.  Or when you publish a new series, and that generates interest in your other, backlisted and/or out-of-print work.  Your agent can help you figure out whether it is better to have the rights formally reverted, or to leave them with the publisher for future use.

Oh, the Oddities...

Items that raise my eyebrows when I see them in a contract:  Seeing that electronic reprints are considered standard reprint rights and are automatically included with other, more traditional reprint rights.  Electronic versions.  Merchandising rights.  Joint or "basket" accounting.  The insurance rider...

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5.  Electronic Reprints, Publishing, and Versions

This will be a while to put up.  In the meantime, refer to the Author's Guild, ASJA, and other professional writing organizations for information about copyright in the electronic age, legal cases involving electronic rights (Tasini vs. New York Times), etc.

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6.  The Bottom Line?

Contracts specify only which rights the publisher is purchasing.  It is up to you to find out and understand how each of those rights can and might be exploited.  It is also up to you to understand the implications of what is written, not just the wording of each paragraph by itself.  And finally, it is just as important to notice things that are not in your contract as it is for you to understand the terms which have been specified.

The Author's Guild has recently published a guide to contracts, including electronic rights.  This is an excellent, definitive referece.  It includes sample clauses with commentaries, explanations, and suggestions for dealing with those clauses; and it covers all aspects of publishing contracts:  delivery of work, conditions governing the manuscript, termination of the contract, warranties, indemnities, royalties, subsidiary rights, accounting, out of print clauses, etc.  I highly recommend this guide for all writers, published or aspiring.

Model Trade Book Contract and Guide
The Author's Guild, Inc
Published by the Author's Guild, Inc.
Free to members of the guild; $90 to nonmembers

Another clearly-written and informative book about contract rights is Mark Levine's guide.  This is another book that will be useful to all writers, whether published or aspiring:

Negotiating a Book Contract, a Guide for Authors, Agents, and Lawyers
by Mark L. Levine
Published by Moyer Bell, 1988, 1994
ISBN 0-918825-69-5 (pbk.)
$12.95

When you have questions about rights, talk to your agent, or talk to a contract lawyer who specializes in the publishing industry.  (I'd say to talk to both.)  There are also professional organizations which can give you advice about terms, anecdotal evidence, and perspective.  The main thing is to make sure--always!--that you thoroughly understand your agreement.  It is you, after all, who has to live with what you sign.


Copyright 2004 Tara K. Harper

All rights reserved.  It is illegal to reproduce or transmit in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, any part of this copyrighted file without permission in writing from Tara K. Harper.  Permission to download this file for personal use only is hereby granted by Tara K. Harper..


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