To illustrate, take the successful craft publisher who battled for recognition (and profitability) for twenty years. As he approaches his mid-50s, with no children to take over the business, he decides to sell his publishing company to outsiders. As he begins compiling all of his company’s business records for potential buyers, he discovers something shocking. The boilerplate contract used for two decades contains a “non-assignment” clause. Simply stated, the non-assignment clause prevents him from selling the assets of his company (e.g., publishing contracts) without the prior written approval of his authors. What was likely to be a quick, friendly business transaction between two former competitors, now requires the consent of the craft publisher’s authors. The moral? If you are thinking about selling a publishing company -- or spinning off a line of books -- take the time now to take care of any unresolved legal problems. A well drafted publishing agreement can add value to a publishing company.

Taking the boilerplate provisions for granted can also have serious consequences for authors.

 For example, a publisher’s standard agreement may contain an onerous non-competition clause that prevents the author from using material from the book in her day-to-day business. While no publisher will strike its non-compete clause completely, if asked properly, most will offer the author a more palatable version. Similarly, if the book is tied to an existing brand or business, the boilerplate should be revised to address the author’s trademark concerns. Book contracts typically give the publisher (not the author) the right to determine the title of the work. If the book is an extension or outgrowth of the author’s existing business (e.g., Working Solo®, Taming the Paper Tiger®), approval and ownership of the title – which also functions as a service mark – becomes a critical issue.

The key to a good contract is clarity. Ambiguity and inconsistency are the two key ingredients in litigation soup. Formal agreements are essential. Under copyright law, without a written agreement signed by the author, the publisher does not control exclusive rights. If a dispute arises, a well-drafted contract will anticipate such a dispute and could save you thousands of dollars in legal fees later on. Keep in mind that you are negotiating a very long term relationship. If the book is successful, the publisher and author (or authors heirs) could be bound together for the life of the copyright. For works published after 1977, copyright lasts for life of the author plus another seventy years. (see my article on Copyright Termination).

A publisher must shore up any weaknesses in a publishing contract. For example, tighten up the contract to ensure it contemplates new technologies. Terms such as “book form” and “electronic rights” are vague terms and should be carefully defined. Just a few years ago, everyone understood what the word “publish” meant and could agree on what the term “book form” meant. Not so, today. (see my article on Electronic Rights).

For authors, it is helpful to keep in mind that most contracts are not take-it-or-leave-it propositions. Be courteous. Be tactful. Knowing what to ask for is critical. Use an agent or attorney who understands the parameters of the typical publishing deal to negotiate your contract. Working through an agent or attorney allows the author to preserve his creative relationship with the editor or publishing house.

Below are issues to consider when you draft or negotiate your next publishing agreement. Each key point deserves greater attention than given here (and, will be the subject of future articles). While not all clauses are equally important (or negotiable), a well-drafted contract will cover all, or most of the points outlined below.

Book Contract Checklist

I. General Provisions
1. Name/address of parties
2. Description of work (synopsis)
-Tentative title, no. of words, illos, intended audience, fiction, non-fiction, etc.

II. Grant of Rights and Territory
1. Is it an assignment of "all rights" or a license agreement?
2. Term or time period (i.e., usually the life of the copyright)
3. Geographic scope
a) The world?
b) Limited (e.g., U.S., its possessions and Canada)
4. Exclusive rights granted
a) Primary rights
-Hardcover
-Trade paperback
-Mass market
-Direct mail
b) Secondary (subsidiary rights)
-Periodical rights
1) First serial (i.e., pre-publication excerpts)
2) Second serial
-Book club
-Dramatic rights
-Film/TV rights
-Videocassette/audiocassette
-Radio rights
-Merchandising (commercial tie-in) rights
-New technologies
-Foreign translations rights
-British Commonwealth rights

II. Manuscript Delivery
1. Delivery requirements
a) When due? Is the date realistic? Time is of the essence?
b) What format? Specify size of paper, spacing, margins, etc.
c) What to deliver?
-Number of manuscript copies, disks (what WP format?)
-Index (who pays?)
-Number of illustrations, charts, photos (who pays?)
d) Copyright permissions and releases
-Scope of rights (does it parallel grant of rights?)
-Who pays?

2. Manuscript Acceptance
a) Criteria: Satisfactory in "form and content" or at "sole discretion" of the
publisher? ( note: acceptability is a often "flashpoint" for litigation)
b) Termination for unsatisfactory manuscript
c) Termination for changed market conditions
d) How is notice of acceptance or dissatisfaction given
e) Good faith duty to edit
f) Return of the author advance
-First proceeds clause
-False first proceeds clause

III. Copyright Ownership
1. In whose name will work be registered?
2. When will work be registered? (Should be done within statutory period)
3. Joint authors and collaboration agreements
4. Work for hire
5. Reserved rights

IV. Author’s Representations & Warranties
1. Author sole creator
2. Not previously published; not in public domain
3. Does not infringe any copyrights
4. Does not invade right of privacy or publicity
5. Not libelous or obscene
6. No errors or omissions in any recipe, formula or instructions
7. Limited only to material delivered by Author

V. Indemnity & Insurance Provisions
1. Author indemnifies publisher
2. Does indemnity apply to claims and breaches?
3. Can publisher withhold legal expenses?. Is it held in interest bearing account?
4. Is author added as additional insured on publisher's insurance?
5. Does publisher have ability to settle claims without prior approval of
author? If so, are there a dollar amount limitation?

VI. Publication
1. Duty to Publish within [insert number] months
a) Force majeure (acts of god)
- Any cap on delays?
2. Advertising and promotion
3. Right to use author's approved name and likeness
4. Bound galleys/review copies
5. Style or manner of publication
a) Title consultation or approval?
b) Book jacket
- Right of consultation? Approval?
c) Changes in manuscript
6. Initial publication by specific imprint or publisher may sublicense rights?

V. Money Issues
1. Advance against future royalties
2. When payable? (in halves, thirds, etc.)
3. Royalties and subsidiary rights:
a) Primary rights
-Hardcover royalties
-Trade paperback royalties
-Mass market royalties
-Ebook royalties
-Royalty escalation's
-Bestseller bonus
-Royalty reductions
1) deep discount and special sales
2) mail order sales
3) premium sales
4) small printing
5) slow moving inventory

b) Secondary (subsidiary) rights royalty splits
-Book club (sales from publisher’s inventory v. licensing rights)
-Serialization (first serial, second serial)
-Anthologies, selection rights
-Large print editions
-Hardcover
-Trade paperback
-Mass market
-Foreign translation
-British Commonwealth
-Future (i.e., new) technology rights
. Is the right to intermingle with third party content included?
-Audio rights
-Motion picture/TV
-Merchandising

4. Reasonable reserve for returns
a) What percentage withheld?
b) When liquidated?

5. What is royalty based on? (retail price? wholesale price? net price?)
a) At average discount of 50%, 20% of net is same as 10% of list
b) At average discount of 40%, 16-2/3% of net is same as 10% of list
c) At average discount of 20%, 12-1/2% of net is the same as 10% of list
6. Recoupment of advances

VI. Accounting Statements
1. Annual, semiannual, or quarterly statements
2. Payment dates
3. Cross-collateralization
4. Audit rights
5. Limit on time to object to statements
6. Limit on time to bring legal action
7. Examination on contingency basis
8. Pass through clause for subsidiary rights income
9. Reversion of rights for failure to account (important clause with smaller houses)

VII. Revised Editions
1. Frequency
2. By whom?
3. Royalty reductions if done by third party
4. Sale of revised edition treated as sale of new book?
5. Reviser/Author credit

VIII. Option
1. Definition of next work
2. When does option period start?
3. Definiteness of terms (i.e., is option legally enforceable?)
4. What type of option? (e.g., first look, matching, topping)

IX. Competing Works
1. How is competing work defined?
2. How long does non-compete run?
3. Any reasonable accommodations?

X. Out-of-Print
1. How defined?
2. Notice requirements
3. Author's right to purchase plates, film, inventory

XI. Termination
1. What triggers reversion of rights?
a) Failure to publisher within [insert number] months of manuscript acceptance
b) Failure to account to author after due notice
c) Failure to keep book in print (see Section X)
2. Survival of Author's representations and warranties
3. Licenses granted prior to termination survive

XII. Miscellaneous
1. Choice of governing law
2. Mediation / Arbitration clauses
3. Bankruptcy
4. Modification
5. Literary agency clause

© 2004. Lloyd J. Jassin. All Rights Reserved.





Lloyd J. Jassin is a book publishing and entertainment attorney. His practice includes drafting and negotiating publishing and entertainment industry contracts, copyright counseling, manuscript (libel) vetting, trademark registration, prosecution and litigation. Before law school, Lloyd was Director of Publicity of Prentice Hall Press. He is the coauthor of The Copyright Permission and Libel Handbook (John Wiley & Sons), counsel to the Publishers Marketing Association (PMA), and Vice Chair of the Small Press Center. Contact: 212-354-4442 (t); Jassin@copylaw.com (E-mail); or visit www.copylaw.com.


Notice: This article discusses general legal issues of interest and is not designed to give any specific legal advice concerning any specific circumstances. It is important that professional legal advice be obtained before acting upon any of the information contained in this article.


Administrator note: This article has been reprinted with permission from Attorney Lloyd J. Jassin.