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The Steve Laube Agency

Helping to Change the World…Word by Word

The Steve Laube Agency

The Steve Laube Agency

Helping to Change the World Word by Word

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Home » Legal

Legal

Defusing Contract Landmines

By Steve Laubeon February 12, 2024
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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.)

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Category: Book Business, Contracts, Legal IssuesTag: Book Business, Contracts, Legal

Family Christian Stores Survive Bankruptcy

By Steve Laubeon August 17, 2015
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In case you missed the news, last Tuesday the court approved the sale of the Family Christian Stores (FCS) to FCS Acquisitions. The new owner is basically the previous owner since Richard Jackson was part of that company too (which I have written about before-click to read). This sale, in essence, wipes clean over $120 million in debt that the stores owed. Their $75 million in assets will be …

Read moreFamily Christian Stores Survive Bankruptcy
Category: Book Business, Legal IssuesTag: bankruptcy, Book Business, family christian stores, Legal

Name Brands in Fiction

By Tamela Hancock Murrayon July 30, 2015
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So, you’re driving down the road, and you see a Ford F-350 with Monster wheels and an NRA bumper sticker. And you see a Toyota Prius with a Go Green bumper sticker. You know these are two different personalities driving the vehicles, right? You probably have formed an image already. I would guess you even think the driver of the truck is a male and the Toyota is a female. Or you might see a …

Read moreName Brands in Fiction
Category: Copyright, Craft, Legal Issues, Writing CraftTag: Copyright, Craft, Legal, Writing Craft

Bidding Completed for Bankrupt Family Christian Stores

By Steve Laubeon June 1, 2015
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This past week a complex and long auction process was completed and a winning bid has been chosen to purchase the bankrupt Family Christian Stores (FCS). If this final bid is approved by the court the FCS will emerge from bankruptcy and resume business as usual. If you have been following this ordeal (our blog #1 and blog #2) you know how complicated it had become. The end game is no less …

Read moreBidding Completed for Bankrupt Family Christian Stores
Category: Book Business, Economics, Legal IssuesTag: Book Business, family christian stores, Legal

Happy 85th Birthday Mickey Mouse!

By Steve Laubeon November 18, 2013
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by Steve Laube

 On this day in 1928 the film "Steamboat Willie" made its debut. The main cartoon character (almost named Mortimer!) was featured and Mickey Mouse was born.

You might ask, "So what? Other than fun trivia, what does this mean to me as a writer?" Actually the success of Mickey Mouse and the Disney empire cuts to the heart of today's copyright laws which affect you and your work. …

Read moreHappy 85th Birthday Mickey Mouse!
Category: Book Business, Copyright, Legal Issues, SteveTag: Book Business, Copyright, Legal

News You Can Use – Feb. 7, 2012

By Steve Laubeon February 7, 2012
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Author Says McGraw-Hill Cheats on Royalties - Details of a pending lawsuit.

What is Pinterest? -  The latest craze in Social Media Networks. AuthorMedia shows you the simple steps to sign up and tips on how to use it in the next article below.

Three Ways an Author Can Use Pinterest - Last week an editor told me how she was following a couple of her authors on Pinterest and how much she liked …

Read moreNews You Can Use – Feb. 7, 2012
Category: Book Business, News You Can UseTag: Book Business, Contracts, Facebook, Get Published, Grammar, Legal, Marketing, Social Media, Trends, Writing Craft

The Shack Gets Sued

By Steve Laubeon July 14, 2010
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Sad news from the LA Times that the author and publishers of The Shack are now in court fighting over the royalty earnings. Read the entire article here. Then weep. Then pray that cooler heads prevail and that it can somehow be kept out of the court system. The key element to the story, from my agent’s perspective, is that there was not a solid contract in place from the beginning. It …

Read moreThe Shack Gets Sued
Category: Book Business, Legal IssuesTag: Bookselling, Contracts, Get Published, Legal, Writing Craft

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