August 8th, 2014

How Bad Can One Page Be? The Hidden Dangers in Short-Form Contracts

SusanSpann_WITSSusan Spann

As summer fades, an increasing number of authors will find themselves on submission and, hopefully, in the enviable position of evaluating publishing contract offers. In light of that, I’m kicking off my autumn contract guest posts a little early.

Authors have plenty to watch for when evaluating a publishing deal, but one of the most common dangers is also one the author might not see: an abbreviated contract that omits important clauses and protections.

Most authors look at the standard-length (12-30 page) publishing contract with a combination of excitement, fear, and confusion. For those not versed in legalese (and, more precisely, Publishing-ese) the contract terms can range from “difficult to read” to “penned in Sanskrit.”

When authors see a three-page form, they often think “hey, this is great!” and “finally, a contract that makes sense!”

But beware…that way be dragons.

Publishing contracts run long because they have to deal with many legal issues. “Copyright” in a manuscript is actually a bundle of rights, each of which should be addressed in a proper publishing contract. Failure to deal with each of the relevant issues results in ambiguities, many of which will cut in the publisher’s favor (or, at a minimum, need a court to resolve—usually at great cost).

Recently, I’ve seen a number of “short-form contracts” which claim to offer authors a “better deal” than those being offered by “traditional, complex forms.”

Again, I say: beware.

These shorter forms do often include a statement of royalties due on sales (usually on a percentage basis), a grant of rights to publish, and a statement of the timing (often quarterly) when the publisher will send the author’s royalty checks. However, these shorter contracts are often missing a number of critical provisions that many authors don’t realize they need to look for. When a problem arises, the author goes to the contract, only to find that the “friendly short form” doesn’t address that issue (or, when it does, the publisher prevails).

Here’s a list of important provisions many short-form contracts don’t include:

  1.  Complete statements of rights/reservations of rights. The shorter the contract, the more likely it is to simply grant the publisher “all rights” in and to the work “in all forms, formats, and territories.” Publishers don’t need “all rights” to a work. In fact, most publishers take print, ebook, and sometimes serial rights. Everything else should be open for negotiation—and at a minimum, those other rights (often called “subsidiary rights”) should be separately listed and addressed in the contract language. One-size-fits-all rights language is never the best option for the author, and always something the author should be watching for with an eagle eye.
  2.  Author termination rights. Although most publishing contracts last “for the life of copyright,” that’s actually only the contract term if the contract isn’t breached or terminated earlier. Good contracts give the author several ways to escape if things go badly, including the right to terminate (and revert all rights to the author) if the publisher fails to publish, goes out of business, breaches the contract, and/or fails to sell at least a specified minimum number of copies in a stated period of time. Short form contracts often fall woefully short on author termination rights (if they mention them at all).
  3.  Sales Statements. It’s not enough for the publisher to send the author royalty checks. Each check should be accompanied by a sales statement detailing the number, price, and other relevant information about the books sold, returned, and exchanged during the period in question. Not surprisingly, however, short-form contracts often skip right over the issue of sales statements—and unwary authors often focus on the royalty numbers, and forget the need for sales documentation until the contract is signed and the first (unexplained) royalty check comes in.
  4.  Audit rights. The author should have the right to audit the publisher’s books and records (as they relate to the author’s work) at least once in every calendar year. Good audit language goes beyond this single sentence, too (we’ll deal with the issue in more detail in another post this autumn).
  5.  “Out of Print” status defined and tied to sales. Short-form contracts often either omit the author’s “out of print” termination rights altogether (whoops…) or tie “out of print” status to “availability” – meaning that as long as an ebook version of the work exists, the book is never out of print. Unless an author is watching for this, it’s easy to miss the omission of out of print language.

 Note: this list is not exhaustive. There are many other important provisions which short-form contracts often omit (or fail to mention). I’ve listed the ones above as an example, to demonstrate just how dangerous short-form contracts can be for unwary authors.

Sometimes, publishers say that these clauses “aren’t needed,” or that authors and publishers should be able to trust one another to “do the right thing.”

SHENANIGANS ON THAT.

It’s true that publishers and authors should be able to trust one another, and that good publishing relationships do function like a partnership between the author and the publishing house.

However, it’s also true that good fences make good neighbors, and good contracts make for good partnerships—in publishing and elsewhere.

Never rely on any promise or representation which isn’t contained in the body of the contract. Contract law says that a promise which isn’t contained in the contract generally does not exist as part of the deal. (There are exceptions, but you should never rely on falling within an exception to the rule.)

And never, ever sign a publishing contract—especially not a “short-form” deal—without obtaining a professional’s opinion to ensure the contract protects your legal rights.

In the months to come, we’ll look at some other important contract terms, and how to protect your rights when you enter into a publishing deal.

In the meantime: have you ever seen a “short-form contract” (less than five pages long)? Did you notice any important clauses missing from the deal?

9781250027054_p0_v2_s260x420 Susan Spann writes the Shinobi Mysteries, featuring ninja detective Hiro Hattori and his Portuguese Jesuit sidekick, Father Mateo. Her debut novel, CLAWS OF THE CAT (Minotaur Books, 2013), was a Library Journal Mystery Debut of the Month. The second Shinobi Mystery, BLADE OF THE SAMURAI, released on July 15, 2014. Susan is also a transactional attorney whose practice focuses on publishing law and business. When not writing or practicing law, she raises seahorses and rare corals in her marine aquarium. You can find her online at her website, and on Twitter (@SusanSpann).

 

 

 

 

 

 

18 comments to How Bad Can One Page Be? The Hidden Dangers in Short-Form Contracts

  • My first publisher used a “short-form contract,” but it had all of the provisions you listed. The contract did grant the publisher all rights in all forms, formats and territories, but I asked for that part to be amended, as well as the length of copyright. They changed everything I asked them to before I signed. If they hadn’t then I would have ended things right there. The termination rights were spelled out in detail, and I was able to have all rights reverted and the contract terminated after two sales periods when it became clear the book wasn’t a good fit for this imprint, or for me. But before I signed I did my homework and consulted with an attorney familiar with publishing rights. It’s not worth signing your work away in the excitement of finally offered a publishing contract.

    • I’m so glad to hear stories like this, from authors who were paying attention and watchdogging their rights in ways that worked out in the end. Many publishers will amend contracts to add in the necessary provisions – as long as authors are savvy enough to ask!

  • Brianna Soloski

    I’ve signed two short form contracts, both looked at by a lawyer, and both times I was burned. Fortunately, it never got to be so major that courts had to be involved and there was no loss of money on my part. I’m hyper aware now of every single thing I sign.

    • I’m sorry to hear that, Brianna. This is one reason I usually recommend that people consult an attorney with experience in publishing specifically (which you may have done – it’s still possible to get burned) – standard contract attorneys often don’t understand the specifics of publishing deals. That said, even a publishing attorney can’t always stop all problems. Mainly, I’m glad to hear you were able to get the problems resolved, and that you’re a good advocate for your rights.

      • Brianna Soloski

        Definitely. I didn’t consult an attorney specific to publishing, but if I ever sign again (I’m self-published now), I would.

  • Just of curiosity, Susan, how many times out of ten do you advise clients or those who’ve had you review their publishing contracts either against signing or only signing if the publisher agrees to significant revisions (in the author’s favor)? Just wondering how ubiquitous, anecdotally, these bad contracts are. Thanks!

    • Great question Tammy. The short answer is “it varies.” I have never advised a client to sign a contract exactly as presented – there are always revisions on some level. That said, I’d estimate the contracts I see need major revisions about 35% of the time, and an additional 5% of the time, I’ve had to tell authors “this is either a scam or a publisher so unfamiliar with the business that this can only end badly for you … walk away.” By basic math, that’s 40% of the contracts which require major revision or outright refusal. The other 60% need only minor to moderate revisions – generally, that means tweaking small pieces to better protect the author’s rights.

      Ironically, the same percentage (40-60) holds with other types of business contracts. 40% of the time, we’re making major revisions, and the other 60% it’s mild to moderate tweaks to address the parties’ concerns about the details.

      I don’t think publishing is “worse” than other industries when it comes to contracts as a whole – I think the bigger issue is that authors are often much less familiar with business (and therefore, with how they need to watch out for their legal rights in a contract) than people who are buying and selling other kinds of businesses and goods. Also, a book is clearly different than a sink, or a toaster, or other kinds of goods that people buy and sell.

  • janieemaus

    Great advice!

  • This is great advice… and Writers in the Storm is one blog that I’ve brought to the attention of our local writing group.
    The old saying “That the devil is in the detail” sure applies to any legal contract anyone signs and in this respect a contract with a publishing house is no different.

  • ecreith

    I’ve had both a long-form contract with a big publisher and a short-form one with a small publisher. I’ve been happy with both. In each case I carefully read the contract over ahead of time and made notes on all the questions I had. I had a couple of changes made in the long-form one, and had no trouble with either publisher.

    I agree that authors need to be careful about contracts. I’ve seen some questionable ones, too. Thanks for the great advice, Susan!

  • Sharla Rae

    I’ve been in this business quite a few years but I learned something new. Thanks for this interesting heads up!

  • This, IMHO, is where my agent is worth every penny I pay her. She saved me from problems that would have restricted me from selling to a second publisher. I agree, though, Susan, that with today’s sneakiness – it’d be good to have a literary attny look at it. Y’all can see why you should contact Susan, right?

  • Quite frankly, every contract should be reviewed by a literary attorney and/or an agent. Shared and tweeted.

  • Great advice! I’m saving this for later.

    I’ve signed short contracts, but only for short stories. But once I wrote to ask a publisher about terms before submitting for an anthology, and they were so unfavorable that I didn’t even bother to submit.

    If enough writers demanded good terms, such unfavorable contracts probably wouldn’t be offered first.

  • […] don’t have a publishing contract, I simply envy those who do, but this post is for those of you who do because there are hidden dangers inside those contracts. This is a post […]

  • […] your content.  Here are some posts that may help you understand your contract: Susan Spann’s “How Bad Can One Page Be? The Hidden Dangers in Short-Form Contracts,”  Victoria Strauss’s “Publishing Industry Terms and Contracts: Some Resources, and Some […]