It is crucial that every author knows that if they sign a contract, they are legally bound by the terms within that contract. Even if it is to their disadvantage.
Our agency is often approached with a phrase like “I signed a bad book contract and want out of it. Can you help?” Usually, the answer is “Unfortunately, no.”
After so many years of running into landmines buried within some contracts, I developed a class called “Landmines in Your Book Contract.” The fascinating thing is that it seems each time I teach it I have to revise the handout because something new has cropped up in a contract!
One of the key things we do as a literary agency is protect an author’s interests when navigating the complexities of a book contract. I have had some wonderfully fascinating conversations with legal experts on the other side of the table. We make our respective cases and come to a positive outcome. But not always.
In one case, the publisher said they could not afford to hire a lawyer to review our requested changes to the contract and thus were unwilling to negotiate. We recommended the author walk away. In another case, the publisher wouldn’t negotiate and said, in essence, “Take it or leave it.” We recommended walking away from the deal. Our client was upset with us, terminated their relationship with us, and signed the deal on their own.
Please note that I intentionally will not name names in this blog and intentionally disguise the details so no one can know to whom I am referring. The point of this post is to educate writers on the need to be careful when it comes to the contracts they sign.
There are times when two parties simply cannot come to an agreement. In legal conversations, each party is obligated to present their case with the utmost confidence. I remember one negotiation years ago where the legal counsel for the publisher and I circled each other for an hour, poking at each other’s legal terminology. In the end we “shook hands,” and that lawyer later asked me to co-teach a class on publishing law issues at a conference. Collegiality, not contentiousness is a preferred outcome!
A Couple Landmines (just a couple for the purpose of this discussion):
Royalties based on Net Profit, not Net Receipts. This means the royalty the author receives is based on the publisher’s revenue after expenses. In the movie business, this is called “Hollywood Accounting.” Read the linked article to see how such a clause can be easily abused.
In an effort to make my point with humor, I told one publisher, “You could go on vacation to Bermuda, call it a ‘research trip,’ and charge it as an expense against my client’s book!”
The publisher did not laugh and said, “We would never do that.”
“Of course not,” I replied, “but if your company is sold to someone else, the terms of this agreement will go to the next owner who may not have the same moral compass you have.” The publisher was unwilling to change this clause in this case, which ended that discussion. However, another time a different publisher agreed to change their contract to “net receipts” after hearing our argument on this point.
Bankruptcy Clause. This was missing in one of the contracts. It means there was no mechanism for the reversion of rights if the publisher declared bankruptcy. We have heard too many author stories about books they can’t get back because of bankruptcy proceedings with their publisher. While I’d rather not assume a publisher will go bankrupt, the principle of “Expect the best, but prepare for the worst” is something to consider on this issue. This can be further complicated if said company survives bankruptcy or if its assets are purchased by someone else.
I must clearly state that the majority of book contracts are fine and do not contain landmines, at least not horrible ones. (!!!) One advantage of working with a veteran agency is that we have likely negotiated with your publisher before and have scrubbed it safely. Thus, you benefit from prior negotiations when we start working on yours. (Cue the commercial for literary agents.)
By the way, if you got to the end of this article, “Congratulations!” Most writers have their eyes glaze over when they see legal stuff in these posts, despite the importance of such dry information.
(I first wrote a version of this article almost ten years ago to the day. It has been thoroughly revised and updated.)
Fun Fridays – February 9, 2024
Great article, Steve. Years of experience behind it. Tho an attorney, I would never read and sign a publishing contract without representation by an experienced literary agent.
This is really good. Do you have a link to the full handout available?
I have sadly seen authors ‘up a creek without a paddle’ when their book companies have gone bankrupt. What a good reminder!
The handout is unuseable outside the class. It is made up of actual contract clauses, one by one. In the class we read the clauses together and then I help point out where the language is troublesome.
Thank you, Steve!
I have done a thing or three,
so let me take you by the hand
and offer you this fervent plea:
don’t sign what you don’t understand.
I did this once; what I could ken
sounded very much like fun.
My mates and I got drunk and then
were deposited with boots and gun
in the armpit of the hemisphere
‘mongst locals of an evil eye
who made it extra-special clear
they’d be quite pleased to see us die,
and what truly made it mental
was the really cheap-jack dental.
Excellent. Thank you Steve.
Thank you for your diligence to protect authors while maintaining integrity. I appreciate you very much.
Thank you for this article, Steve. Last week we were confronted with an attorney contract that was clearly and immediately not in our best interest. Your article absolutely confirms our decision to walk away. Even though I’ve written and traditionally published books for decades (and now help others do the same as well), it is wonderful to be a part of your agency with our trusted agent to help us with every concern. I commend you! Blessings! Now back to writing books…
Thank you for your excellent advice.
Yes, I did make to the end! Thank you for your hard work on our behalf.
I’m so glad that I follow your blog. This tidbit helped me a few years back, and I’m grateful that you take time to update it.
Haha, Steve! I was one of those who read to the end because I’m a legal type and that’s what kept me engaged. So funny what you said at the end.
I’ve been considering sending you another proposal because I realize based on the conversation we had last year that I did not send the one proposal I should have. I hope to have that to you soon.
I’ve always known I’d send you something that would arouse interest. I pray it’s the next one.
Best regards,
Sonia
Thanks for this post, Steve!
Blessings!
Great post. I would love to take that course. Can I ask a question here? I have a five year book contract. Do those 5 years start from when the contract was signed or when the book is finally published? It’s not stated, just that my right will revert back after 5 years.
Kristena,
I cannot comment without seeing the language.
If there is a term limit, then unless otherwise specified, it could mean from the day the contract was fully signed by both parties. But you cannot act based on this casual blog comment as it is not considered legal advice or even a recommendation. Please consult an intellectual property attorney before acting on it.
Terrific article. Can you point to a resource that gives a good example of what numbers to use to determine the price royalties are based on? Thank you.
Debra,
Every publisher and every contract have their own metrics of what is “normal.”
However, you can read this post from our blog:
https://stevelaube.com/the-myth-of-the-unearned-advance/
I hope someday to need this advice so I read the entire article with a hopeful heart! Thanks for all the varied topics covered here.
Fascinating. Thank you!
Such a great article, I jumped over here to the blog to comment. Quite the opposite of glazed eyes, mine eyes tend to go feral when I read all the things that could go wrong in the realm of book contracts. Very thankful to have agencies like yours to make sure authors are getting the best outcome possible for their books.
How I wish I could sit in on this class someday🫤.
This info is critical.
Thanks for all these helpful insights.
What do you think of print-to-publish?