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NEGOTIATING A CONTRACT

by

Verla Kay

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.

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I negotiated my first two contracts on my own, and here's what I discovered.

First, I did was to talk to my Regional Advisor with SCBWI (The Society of Children's Book Writers & Illustrators.) She gave me fantastic advice about what to watch out for and what to ask for...also *how* to ask for things.

Second, I bought and devoured the book, Business & Legal Forms for Authors & Self-Publishers by Crawford, published by Allworth Press. This book not only breaks author contracts down into understandable terms, but it has a "negotiation checklist" in it that takes you through each paragraph of a sample contract and tells you what and how to negotiate each point. This was one of the best investments I ever made. (I bought it through the Writer's Digest book club.)

One important thing to think about when you are negotiating your own contract is *how* to ask for things. I looked through my contract, decided which points would be negotiable, and which points I really wanted to see changed. Then, I asked for the things I was absolutely certain the publisher would say, "No," to .... and when they did say no to some of those, I was in a better bargaining position to get the things that WERE important to me -- because the publisher really wants to negotiate with you. They want to come to a happy compromise for both of you. They do not want to say, "No," to all your demands. Most publishers really do want their authors to be happy.

Here are the two things I asked for that I KNEW they would say, "No," to:

First: An escalation clause

This is a clause that says, If you sell XX number of books, then your royalty rate will go up to X% and you will get this higher royalty on the books sold from that point on. (Or whatever terms the escalation clause has in it.)

Second: 20 free picture books instead of 10, which was what they originally offered me.

Now, this is what I asked for that I was not prepared to accept as originally stated. If they had not changed this next clause, I would have not signed the contract! I would have turned the contract down because I simply "could not sign it" if this clause was not changed:

The options clause.

This was a particularly nasty clause in my contract that said, in effect:

First: You must submit your next picture book to us. (This was fine with me! My next story would by-pass the slush pile and go directly to the editor's desk.)

Second: We have to make a decision on this book before you can submit to anyone else. (Uh oh....this is getting sticky now...)

Third: We have to make a decision on the second book within 3 months (sounds good, eh?) of the time the first book is PUBLISHED. (AAAAAUGH! I looked at that and screamed. It is very normal for a picture book to take three years to be published. I would not be able to sell another picture for all that time! Only, in reality, that first picture book was not published until October of 2000 -- six years after I sold it. Had I signed that contract as it was given to me, I'd have had to wait to sell my second book until January of 2001. But because I made them change this clause, I had sold a total of eight books by January of 2001.)

So what happened?

First: To my shock and delight, they said, "Yes," to giving me 20 books instead of 10.

Second: They said an emphatic "No," to the escalation clause, but told me, "But we can talk about it with your second book."

Third: When I told the editor that I absolutely could NOT sign the contract with that options clause in it, because I couldn't afford to have my potential income tied up for up to three years (I had no idea it would take six years for that first book to come out) she had the grace to laugh a very embarrassed laugh and tell me, "I'll get back to you on that." She did. I was prepared to give them up to a year to make a decision, but luckily I didn't tell them that! They came back and offered me a flat three months from the time I submitted the second manuscript for their decision. MUCH better terms for me! They still had a second option on my next book if they turned that book down, but I didn't care. At that point, the most important things had been gained by me and I was satisfied with my contract.

But when I negotiated my second contract, they were inflexible. They would change NOTHING from the first contract -- except the amount of my advance went up by $1000. I was unhappy with my lack of negotiation efforts on that book, and so I got an agent just before I was offered my third contract. She got the escalation clause for me, more free books, the option clause was dropped altogether, and she kept many, many rights for me, such as electronic and movie/TV rights, etc. Rights that I wouldn't have known what to do with if I had had them on the first two books, anyway. I was very pleased with the way everything turned out.

My advice? Do not sign a contract until you understand what you are signing. Publishing contracts are legal, binding documents that may outlast your lifetime! You will be bound by the terms of your contract from the moment you sign it, until your book goes out of print, or possibly longer. Be sure you know what you are signing!

Things to think about: If your book goes out of print, do you get the rights back so you can sell it to another publisher? Can you buy the "plates" so you can publish the book on your own? What happens to all the remaining copies of your book? Can you buy them at a deeply discounted price? Will they notify you in time so you can buy up books for your own use before they are all gone?

What does your option clause say? Are you going to have your hands tied and not be able to sell another book for YEARS?

What if the publisher goes bankrupt or closes its doors? What happens to your book then?

What if your editor leaves and your book is "orphaned?" What happens to it then?

What if the publisher doesn't publish your book like it says it will? Do you have any recourse?

What if your book doesn't "earn out" its advance? Can the publisher take money from your next book sales and apply it to this book? (Watch out for this clause!)

What if someone sues because of something in your book? Who is liable? Will the publisher protect you?

All of these are concerns that will be covered in your contract. All of them are vitally important to you, and to the future of your book. And these are only SOME of the concerns you need to have when negotiating your contracts. Be informed, so you don't get burned.

It's not impossible for you to negotiate your own contract, but you do need to take the time necessary to learn what is important to you and what you can be flexible on and what points are vital to you - the places where you will not bend or give in.

As long as you are reasonable, and present your concerns in a professional way, you will not jeopardize your contract. Publishers write their contracts with one thing in mind: to get the very best terms possible to the publishing house. They are willing and able to negotiate on many points in your contract. It's your job to make sure some of those points are changed to your advantage. kids bar

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