Contracts have remained a centerpiece of business and trade throughout human history, despite drastic changes in social values, political views, and technology. Whether verbal, written, or otherwise, contracts guarantee behavior on both sides of a transaction and detail the terms of an agreement. In publishing, contracts are true currency: contracts allow publishers to manage each player’s role and compensation in the process of book production. Whether a contract with a bank instates a line of ready credit to supplement slow cash flow, determines payment and deadlines for a freelancer, or sets terms for a book-to-movie deal, publishers rely on written agreements to guarantee income and expenses for a book. But the digital age and the rise of e-publishing has thrown this for a loop. How should e-books be treated in a contract? How should royalties be paid? How should distribution channels be determined and managed? To begin answering these questions, one must have some knowledge of the purposes of contracts and the expectations the publishing world has of them.
What is a contract?
The Oxford English Dictionary defines a contract as “a mutual agreement between two or more parties that something shall be done or forborne by one or both; a compact, covenant, bargain; esp. such as has legal effects” and “a business agreement for the supply of certain articles or the performance of specified work at a certain price, rate, or commission.”
How do publishers use contracts?
Publishers use contracts to define relationships with many people involved in the book publishing process, not just the author. Publishers use contracts with freelancers who work on specific projects; some of these contracts may specify an hourly rate for their services, and others– called work-for-hire agreements–indicate that the publisher actually purchases all rights to everything the freelancer produces under said contract. Contracts also define other business relationships in publishing: printers contract jobs with publishers, banks use contracts to define loan terms and cash flow allowances, and distributors establish responsibilities of their employees and of the publisher when agreeing to work with a book or an entire line of books.
A publishing contract, however, is most often assumed to be a book contract, an agreement for an author to provide text and a publisher to produce and sell it. These contracts are used to state particular and binding terms of artistic responsibility on the author’s part and financial and business responsibility on the part of the publisher. For the purposes of this project, the term “publishing contract” will be used to identify these contracts and to make sure that contracts between authors and publishers for products like electronic books are included in this analysis.
What is in a publishing contract? 1 2
Please note: this may not be the order in which a contract is structured.
- Who
- Names and addresses of both publisher and author.
- Identification of under whose name the book will be registered for copyright
- Identification of who owns what rights to the book
- What
- A description of what the book will be about and the expected length of the manuscript
- A thorough detailing of terms of rights for the book
- Types (including, but not limited to primary rights for different editions [hardback, paperback] and secondary rights [movie, audio book, play, radio, translations]
- Length of Time
- Geographic Range (U.S.? North American? World rights in English? World rights in all languages?)
- Level of Exclusivity (author may choose to withhold rights of certain types and ranges in order to individually sell rights to other publishers; exclusive rights listed in a contract can be sold to other companies)
- Royalty For Income or Sale (each right given to the publisher is granted a royalty rate or a flat fee with which the author will be compensated)
- Clear expectations of quality and legal caliber (to protect publisher from possible lawsuits)
- Terms of involvement for the author, like expectations for a book tour or self-initiated marketing programs (including blogging or Tweeting); there may also be terms for involvement (or exclusion from) decisions about cover and interior design
- When
- Schedule for author: first draft due, revision(s) due
- Schedule for publisher: date by which the book must be published, date of payments to author
- When the book would be considered out-of-print (and options for the author/publisher)
- How
- Quantity of books to be published initially
- Type of book to be published initially(hardback, paperback)
- Revision plan (subsequent editions)
- Advertising, Promotion, Distribution, Marketing Plans
- Money Matters
- Percentage of royalties for author
- Percentage of royalties offered as advance
- Percentage for author’s agent
- Terms for returning advance
- Back-up Plans
- What if publisher goes bankrupt?
- What if the author wants to write a competing book?
- What if the publisher wants to buy (or chooses not to buy) the author’s next book?
Who writes publishing contracts? Who determines the terms?
Publishers will offer a contract to authors, not the other way around. When the contract is first presented, publishing house and its lawyers have agreed on terms they think are most beneficial to the interests of the publishing house. The author and his/her agent are expected to review the terms and begin negotiations for changes. Both sides have every right to back out of a contract that is unfair or unbalanced before the contract is signed. Good contracts should be a collaboration between both parties in the best interest of the book, not just an assurance of the publisher’s or the author’s needs.
Is there any difference between a contract from a large publisher and a small publisher? How do contracts differ?
Contracts differ as widely as publishers and publishing programs. All contracts should cover as many foreseeable issues as possible, and many of these issues may be the same across most of the publishing industry. You can see two examples of these in the following page XXXXXXXXXXX.
Who enforces contracts?
Publishers and authors both have the authority to enforce terms of a contract. Usually a lawyer with experience in contract law–especially publishing contracts–will represent the prosecuting party through the process. As publishing contracts are legally binding, they are treated like any other business contract in the courts.
Where can I read more about general contract law?
Footnotes:
1. “Trade Book Publishing Contract Checklist.” CopyLaw. The Law Offices of Lloyd J.
Jassim, 2009. Web. 8 Aug. 2009. <http://www.copylaw.com/forms/
pubchk.html>. Back to reference.
2. “Chapter 3: The Contract.” So You Want to Write a Book?: A Guide for New
Authors. N. pag. O’Reilly Media. O’Reilly, 2009. Web. 8 Aug. 2009.
<http://oreilly.com/oreilly/author/ch03.html>. Back to reference.
