THINGS TO WATCH FOR IN CONTRACTS
Notes from SCBWI National Conference 1999
NOTICE: Verla Kay is not a lawyer, and any information disclosed about contracts and/or negotiation of contracts on this website is from her own personal experience and/or information she has received second-hand. It does not constitute legal advice, nor should it be considered such. It is on this website for the sole purpose of alerting authors to the seriousness of signing a written contract, and so that they will realize the need to be very careful before signing their "rights" away. Anyone needing expert advice on legal issues should consult a good contract lawyer.
Kay Murray, Director of Legal Services said, "When you get a publishing contract, watch out for:"
Watch for the number of words they say you must write, the description of the work, the date to be delivered, etc. If you have already written the entire work, try to get this clause changed to read, "the author HAS delivered an acceptable manuscript" instead of "the author WILL deliver an acceptable manuscript by such and such a day." If you get this change in your contract, then the publisher can't change their mind and say that "this manuscript isn't acceptable to us so we are cancelling it and the contract and you owe us your advance back."
If the manuscript is not entirely written when you get your contract, then try to get the Delivery Clause changed to read something like:
The author shall deliver an acceptable manuscript ... if it is not acceptable, then the publisher should provide the author with the reasons it isn't acceptable and shall give the author XX amount of time (as: 60 days) to revise.
An acceptable publication clause would be:
After XX months of acceptable delivery of the manuscript, we will publish or will pay you the whole advance and give back your rights.
But many new contracts have clauses that are NOT acceptable. To this clause they are adding:
(But after we give you back your rights,) if you sell your book somewhere else, you owe us back all the advance!
Strike out the phrase:
"Time is of the essence." This phrase is of great advantage to the publisher at the expense of the author.
If you miss a deadline or something, be SURE to get IN WRITING that it's "okay" from your editor! Otherwise, they can come back later and say you "breached" the contract, cancel it and make you pay back your advance.
(I asked Kay if this could be an email acceptance and she said, "Yes, but for legal purposes, it's BEST to get the editor's actual signature on a letter.")
USE IT OR LOSE IT CLAUSE
Ask for this clause to be put into your contract. This is a GOOD clause for authors! It means, if they don't use the rights before XX amount of time after the books is published, then the rights revert to the author. (One example would be if they didn't use the foreign rights, or the movie rights by XX amount of time after the book was published, then you would get those rights back and have the right to sell your story to foriegn markets and movie makers yourself.)
KEY MAN CLAUSE
In case your editor leaves, it's a good idea to try to get a "Key Man" clause in your contract so you can go with your editor if she leaves and changes houses. You would, of course, have to pay back the advance to the first house in order to go with your editor to a new house. (This is all I know about this clause.)
LIST means your royalties will be based on the Retail, Invoice, or Cover Price of your book. This is GOOD.
NET means your royalties will be based on the wholesale or discounted price of your book. This is NOT good. If your contract WILL be based on Net, then try to get this defined as "the wholesale price" of your book, as it will give a little better royalties. Net price base will generally be comparable to about half of the standard List royalty amount. For instance, if your royalties earned on your book were $1000 at the List rate, you would only get about $500 on the Net rate for the same number of books sold. Be sure to keep these figures in mind when negotiating your contract!
Watch for the Royalty Rates on School Book Fairs and Book Clubs. Ask for higher rates.
(Just for your information, royalties are usually paid twice a year, as in November and May. In this example, you would receive royalties in November for all royalties earned from February through July and in May you would be paid all the royalties accumulated from August through January.)
DEEP DISCOUNT CLAUSE
This clause will say something like: You will get your royalties on the List price of hardcover books where the discount is 48% or less, but if the publisher sells at more than a 48% discount, then your royalties are based on the NET price of the book. WATCH FOR THIS CLAUSE. IT'S A BAD ONE.
Try to get the discount % higher and add: "If the publisher's regular discount to retailers is higher than this discount, then this clause doesn't apply." Some publishers will SAY you are getting royalties on the List price of the book, then they will put this phrase in, knowing that they give almost all the bookstores a discount higher than the amount in this phrase so that in actual fact, you will be getting your royalties on a Net price instead of List.
Before you sign a contract with this phrase in it, go to your local library and check out current copies of Publisher's Weekly to see what discounts ARE being given to major bookstores.
ELECTRONIC RIGHTS CLAUSE
Ask for higher than 15%.
This is the dreaded "out of print" clause. Ask for a shorter amount of time to wait before the rights revert to the author.
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