Pray that it never happens to you. But if there is a situation where you find yourself in a legal battle with your publisher regarding your book contract, there are terms that will dictate how that disagreement is handled.

Here is one version from an old contract:

Any claim or dispute arising from or related to this Agreement shall be settled by mediation and, if necessary, legally binding arbitration in accordance with the rules of a mutually agreed upon alternative dispute resolution service. Judgment upon an arbitration decision may be entered in any court otherwise having jurisdiction. The parties agree that these methods shall be the sole remedy for any controversy or claim arising out of this Agreement and expressly waive their right to file a lawsuit in any civil court against one another for such disputes, except to enforce an arbitration decision.

Regardless of the place of its physical execution, this contract shall be interpreted under the laws of the State of XXXXXXXXXX and of the United States of America.

If you read this carefully, you’ll see it lays out the rules that keep a dispute out of the court system and forces the two parties to use binding arbitration instead.

Also note the second paragraph that dictates which state laws apply. We once had a publisher contract that had the laws of another country as the basis for the law. (It was a mistake by the publisher, a leftover from a previous contract they had reused.) The location for the state law is usually the location of the company that issues the contract, and is often nonnegotiable. Some contracts also dictate where arbitration will occur.

I’ve read stories of authors who got into a dispute and yet they had signed a contract that prevented them from pursuing legal options. Note that arbitration isn’t a bad thing, so don’t misunderstand this example as being something terrible.

If your contract does not have a dispute resolution clause, I’d recommend you have one inserted–just in case. A contract is there to determine the responsibility of each party; otherwise it is a form of a handshake, which can cause problems. (See this story of a handshake gone bad.)