Thursday, January 8, 2015

A Helpful Checklist for Book Contract Negotiations

A Helpful Checklist for Book Contract Negotiations page contents

"The author writes, the publisher invests, and from the sales of the book they create together and from exploitation of rights, the author earns royalties and fees, and the publisher earns its profits. It is as simple as simple - and as complicated - as that."
                                      - from Publishing Agreements: A Book of Precedents
This checklist is a navigation tool to help publishers (and authors) analyze, draft
and negotiate a publishing agreement. Whether you are just starting out, or a seasoned publishing professional, the dance steps are the same. You court (or get courted), then you sign a contract. Unlike marriage, where you vow to spend the rest of your life with one partner, when you sign a publishing contract you vow to spend the rest of your life, plus another 70  years (the current term of copyright) with one publishing partner. The possibility of being released sooner exists, but, that is the subject of another post.

A publishing contract confers upon a publisher the status of exclusive licensee. As an exclusive licensee, the publisher enjoys all the benefits of copyright ownership.  That includes the right to sublicense rights, as well assign their duties and obligations to a third party.  While not all clauses are equally important (or negotiable), a well-drafted contract will cover all, or most of the below points.  

This checklist is not intended as a crash course on drafting or negotiating a publishing agreement. If you are determined to draft (or negotiate) your own contract, lock yourself in a room for three days, then call a publishing attorney.
Publishing Contract Negotiation Checklist 

  I.   General Provisions

      1. Name/address of parties
         -Why kind of author?  Joint?  Single?  Corporate entity?
      2. Description of work (synopsis)
          -Tentative title, no. of words, illos intended audience, fiction, non-fiction,

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)     World
           b)     Limited (e.g., U.S., its possessions and Canada)
      4. Exclusive rights granted
           a)     Primary rights
                  -Trade paperback
                  -Mass market
          b)     Secondary (subsidiary rights)
                  -Periodical rights
                  1) First serial (i.e., pre-publication excerpts)
                  2) Second serial
                  -Book club
                  -Dramatic rights
                  -Film/TV rights
                  -Video Recordings / Audio Recordings
                  -Other digital versions (apps, enhanced eBooks)
                  -Radio rights
                  -Merchandising (commercial tie-in) rights
                  -New technologies
                  -Foreign translations rights
                  -British Commonwealth rights

III.   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: Historically, this clause has been a litigation flashpoint)
          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

  IV. Copyright Ownership

      1. In whose name will work be registered?
      2. Exclusivity
      3. When will work be registered? (Should be done within statutory period).
      4. Joint authors 

      5. License versus assignment
      6. Independent Contractor or Work for hire
. Reserved rights
          -Overlap between audio & multimedia on the one hand, & performance rights on the other
          -Overlap between print on the one hand,  & screenplay /  play publishing on the other

V. 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

VI. 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 an 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?

VII. Publication
      1. Duty to publish within [insert number] months of ?
          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

VIII. Advances & Royalties
      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
                  6) bundling with other works
          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
                 -Trade paperback
                 -Mass market
                 -Foreign translation
                 -British Commonwealth
                 -Future technology rights
.                 -Audio rights
                 -Motion picture/TV
     4. Reasonable reserve for returns
          a) What percentage is 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

IX. 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

X. 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

XI. 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)

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

XIII. Out-of-Print
      1. How defined? (Eg, __ copies sold over __ accounting periods)
      2. Notice requirements
      3. Author's right to purchase digital files, inventory

XIV. Termination
      1. What triggers reversion of rights?
          a) Failure to publisher within ___ 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

      4. First proceeds clause

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

      6. Personal guarantee if the author is a business entity, not a human being. 

Resources Beyond the Blog

Author Guild
Dramatists Guild

Independent Book Publishers Association (IBPA)
National Writers Union (NWU)
Romance Writers of America (RWA)
Science Fiction Writers of American (SFWA)
Society of Authors (UK)
Society of Children's Book Writers and Illustrators (SCBWI)
Text and Academic Authors Association (RWA)

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

LLOYD JASSIN is a New York-based publishing attorney.  He teaches a digital rights & permission at the NYU Publishing Program.  He is co-author of the Copyright Permission and Libel Handbook: A Step- by-Step Guide for Writers, Editors and Publishers (John Wiley & Sons, Inc.).   Lloyd has written extensively on negotiating contracts in the publishing and entertainment industries, and lectures frequently on contract and copyright issues affecting creators and their publisher partners.  A long-time supporter of independent presses, he is First Amendment counsel to the Independent Book Publishers Association  (IBPA) and sits on the advisory board of The Beacon Press, one of America's oldest independent presses.

He may reached at or at (212) 354-4442.  His offices are located in the heart of Times Square, in The Paramount Bldg., at 1501 Broadway, FL 12, NYC, 10036.  Follow the Law Firm and Lloyd on Twitter at

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