Book Publishing Contracts For Writers: What Should I Look Out For?

Dave, I just got a contract for a book from a publisher that I haven't worked with before. These long, tedious legal documents just befuddle me, however! Would you mind spinning through this and seeing what you think about the terms and clauses herein?

Here are my thoughts on this contract. Note up front that I'm not a lawyer and haven't received any particular training in contract interpretation. I do have an MBA and have spent lots of time with lawyers reading and rewriting contracts, however, so I think my advice will be helpful. Also, as a note to my faithful readers, I cannot review contracts for you without charging for my time, and frankly you'd be much better off asking a lawyer to help you out anyway. :-)

Rather than reproduce the entire contract, I'm going to just excerpt the highlights and follow them with my comments or thoughts. I am deliberately not talking about royalty percentage, advances, and other specific numbers because those aren't really appropriate to publish in a public forum of this nature.

.. there shall be no royalty payment on copies of the Book sold at less than Publisher's cost...

Determined by? Audited by? Actual number? These vague and hard-to-enforce clauses always make me anxious because it's built on trust without any ability for you to audit the books (with most publishers, at least). What if the book has a retail price of $19.99 and the publisher decides that $10 is their cost? Then any book sold at any sort of discount are 'less than the publisher's cost' and you don't see a dime.

NET RECEIPTS - For purposes of this Agreement, the Publisher's "Net Receipts" from sales shall mean net profit received by the Publisher from sales of the Book, less credits, returns and funds required for reprints.

Funds required for reprints is a printing / publisher cost of business, assuming that I'm understanding what's being referenced, and that cost shouldn't affect the author. This clause is bogus and should be eliminated.

All monies received for direct sales will be held for a period of 12 months to allow for credits and returns.

That's ridiculous. All my MBA "future value of money" instincts cry out on this one. If there's a 'hold on reserves' that floats from payment to payment, then que sera, sera, but having a 12 month lag is exploiting the system without any benefit to the author. I'd reject this.

TAXES - All payments made under the terms of this Agreement will be subject to USA Federal income tax withholding, as required by the United States Internal Revenue Code.

No, these are royalty payments and I'm pretty darn sure that the publisher doesn't have to worry about taxes, just report them as royalty income for the author to the IRS. If you read the 1099MISC filing instructions on the IRS site, it explicitly says "include in this box gross royalties (before reduction for fees, commissions, or expenses) paid by a publisher directly to an author or literary agent or paid by a literary agent to an author."

The only instance where this 1099MISC might not be relevant is if the author is overseas, in which case the publisher needs to pay taxes on the amount that's being paid to the author. Not sure exactly how that'd be structured, but any halfway decent accountant should be able to shed some light on this topic.

ACCOUNT - All royalties and other income accruing to the Author under this Agreement shall be credited to an account maintained on the records of the Publisher (the "Royalty Account"), which Royalty Account will be charged for all amounts paid or payable to Author, including any advance payments, and for all amounts Author is charged, or obligated to pay, pursuant to this Agreement.

This smells of some sort of cross-accounting trick, somehow. I'd kick this out. Each book should have its own account or it should be explicitly stated that the account will not interweave credits and debits from different projects.

OVERPAYMENT - If any person comprising the Author has received an overpayment of money from the Publisher or has an outstanding monetary obligation to the Publisher, whether arising out of this Agreement or any other agreement with the Publisher, the Publisher may deduct the amount of such overpayment or outstanding obligation from the Royalty Account or any sums due to such person under this Agreement.

And there's the cross-accounting clause. Debt with one book should not affect credit (royalties) with another book. Absolutely reject this. Each book project should stand on its own two feet.

AUTHOR DISCOUNT - The Author shall also be entitled to purchase additional copies of the Book for the Author's personal use (self-promotion) at a discount of twenty-five percent (25%) off the suggested retail price of the Book, plus the cost of shipping and handling, while the Book remains in print.

That's ridiculous. The book should be available to the author at cost plus shipping, not at a discount rate that's less than the discount a typical bookstore sees! At least 45% off, if not 60% off the cover price. The publisher shouldn't try to exploit the author in this fashion. Theoretically, the author and publisher are partners on this publication, after all.

AUTHOR'S CORRECTIONS - Author alteration costs in excess of ten percent (10%) of the cost of the original composition, and any expenses incurred by the Publisher in the making of Illustrations replacing those originally submitted with the Book, shall be charged to the Royalty Account.

I think it's important to specify that it depending on why these changes are required. If there's a new version of the program and the screenshots need to be replaced, or if there's a major corporate reorganization or change in the laws or economy, that's not a cost the author should incur. It's just part of the risk of trying to capture in print an element of our fluid, ever-changing world.

COPYRIGHT - The Author hereby expressly grants, transfers, and assigns to the Publisher full and exclusive rights to the Book, including, without limitation, the copyright in the Book, all revisions thereof, and the right to prepare translations and other derivative works based upon the Book in all forms and languages...

And what payment does the author see if the publisher prepares a translation or derivative work? Curiously that isn't specified in the contract as far as I can see...

The Publisher will register copyright in the Book in the name of the Publisher in compliance with the United States Copyright Law. If the Publisher supplies artwork (including artwork for the cover of the Book), it may register copyright separately therein in a manner satisfactory to the Publisher.

Note that there are publishers who let the author retain copyright of the material while the publisher copyrights the overall work. A much nicer approach, in my opinion, much more respectful of the author.

Tip to new publishers: the author can retain copyright without infringing on your rights of publication or compilation copyright.

The Author represents and warrants that, except as previously disclosed to the Publisher in writing, the Author has not aided in the preparation of and is not under any obligation to any other publisher or person to prepare any publication directly competitive with the Book, or which could interfere with his or her performance of this Agreement or interfere with or impair the sale of the Book.

And here's the first glimmer of the non-compete clause. This is a no-go. You need to have it either MUCH more specific (like "author is under no obligation and shall not produce any other work that is specifically addressed at the introductory Bash shell script programming audience, to be marketed online through Amazon marketplace and other ebook venues") or strike this entirely.

The publisher doesn't own you, the author, they're just buying your words.

NON-COMPETITION - The Author agrees that so long as the Book remains in print, the Author will not participate in the preparation or publication of, or allow his or her name to be used in connection with, any work which might compete with the Book or the exercise of any rights granted Publisher hereunder. The Author may, however, draw on and refer to material contained in the Book in preparing articles for publication in professional journals, for teaching purposes, and for delivery at professional meetings and symposia, provided appropriate credit is given to the Publisher and the Book.

Which, of course, is unacceptable. If I write a book for this publisher called, say, Fifty Ways to Hack your Shell (Hey! That's a good title!) I would be prohibited from ever writing about shell programming or, ostensibly, any Unix topic that included discussion of shells because it *might* compete with the book.

This needs to either be much, much more tightly defined or removed entirely.

Actually, I hate all these non-compete clauses because they're where you can really see how most publishers stack the deck against the author, even though it should be a fair, equitable and professionally respectful relationship.

OUT-OF-PRINT PROVISIONS - If at any time, the Publisher determines that the demand for the Book is insufficient to warrant its continued publication, the Publisher may declare the Book out of print. In such event, the Author shall have the right to purchase the Publisher's stock of the Book, if any, at one-quarter (1/4) of the Publisher's established list price, but not below cost.

That's just daft on the part of the publisher. If it's out of print, then they have a warehouse problem and they should just liquidate the remaining books to the author even at just shipping costs. It'd be cheaper than having to pay for them to be destroyed...

If the Publisher declares the Book out of print, then upon the Author's written demand, the rights granted by the Author under this Agreement will revert to the Author...

I'm not sure that's consistent with copyright law. This is really why it's better to have the author retain copyright because then once the book goes out of print the material naturally falls back to the author anyway, without remembering to notify the publisher in writing.

I hope that this review has been helpful and informative. What you're willing to accept in a publishing contract is directly affected by why you are writing the book in the first place, so think through your motivations, the big picture, and your career before you decide exactly what you'll accept and what you'll insist must be removed. For the record, I have rejected contracts and lost writing gigs because of unacceptable clauses. I think it's worth it, but you, in my position, may not think so.

Again, just to reiterate, this is not offered as legal advice and I disclaim any responsibility for your acting upon anything I've said herein! :-)

Dave Taylor is author of sixteen technical books including the award winning, best selling Wicked Cool Shell Scripts and the popular titles Learning Unix for Mac OS X Panther and Creating Cool Web Sites. He also runs the popular and lively Ask Dave Taylor! Q&A Web site where he fields business and technical questions every day, including questions specifically about The Writing Business.

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