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.
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.)