Understanding Your Contract

Understanding Your Contract

BoW - Understanding Your Contract - May 2016

UNDERSTANDING YOUR AUTHOR CONTRACT

Secured a publishing deal? Simon Whaley puts on his business head to assess its implications.

On 30th April 2003 I received my first author contract. Hodder & Stoughton wanted to publish my One Hundred Ways For A Dog To Train Its Human. It was a day of mixed emotions. There was uncontainable excitement that I was having a book be published. And then, as I flicked through all 14 pages of the contract, a sense of horror overwhelmed me as I appreciated what was at stake.

No matter how tempting it might be, especially if it’s a project you’ve been working on for several years, never sign anything you don’t fully understand. Even if you think you understand it, double check, because you must be sure. I’m stating the obvious here, but it’s important: an author contract is a legally-binding business contract. Consider it with a business head on, not a writer’s head, because once you’ve signed it you have to live with the consequences. And that could be for a considerable time.

Always seek advice from reputable organisations. The Society of Authors has a contract vetting service, which is free to members, as does the Writers’ Guild of Great Britain. The detailed feedback for my first book contract opened my eyes to the complexity of the document and was worth far more than the cost of being a Society member.

Kate Pool, Deputy Chief Executive of the Society of Authors, shares her personal views on the subject of author contracts with me. She points out that a contract is a two-way agreement. ‘You want to be confident that what you will receive in return justifies what you are giving to the publisher,’ she says. ‘What exactly is the publisher undertaking to do? What rights are you handing over? For how long? Who pays for what and how is any income divided? What termination mechanism is there if things go wrong?’

Understanding your contract is, therefore, vital. Although contracts vary from publisher to publisher, they all deal with the following:

The Work

This section details your project. It clarifies the project’s wordlength, the subject matter, whether illustrations are required and, if so, who is providing them. For my book Best Walks in the Welsh Borders, I had to provide photographs, which wasn’t a problem, but the contract also stated I had to provide route maps. When I queried this, the publisher said they could arrange this, but there would be a cost, which could either come out of my advance payment or via a reduced royalty. Suffice to say I quickly learned to draw.

The contract also stipulates a delivery deadline for your finished manuscript. If the deadline is tight, this is the time to negotiate a better one. Once the contract is signed all other departments start working on your project, and they assume you’ll deliver by that contracted date.

Commitment to Publish

Clauses in this section state what the publisher is committing to do, which is generally to publish your work in one or more formats within a given time frame period. This is subject to circumstances beyond their control. Read this section carefully.

Publishers usually offer to consult authors on front covers and blurbs. Remember, being consulted is not the same as having the final say. If you’re approached with a choice of covers, and you make a selection but the publisher goes with a different cover, you were still consulted. The contractual clause has been met. In my experience publishers will listen. I didn’t like the first cover choice Hodder gave me. I loved the second, which is what they went for.

Rights

This is where the publisher details the rights they want in your work. Retain your copyright, although there are some circumstances when this may not be possible (usually when there are numerous contributors to one particular project). Publishers may seek hardback, paperback, ebook and audiobook rights, amongst many others.

Consider carefully what you’re gaining from this agreement, and what the publisher is gaining. You could be granting the publishers the right to print your book in various territories, for the duration of copyright. Remember that copyright lasts for 70 years after the death of the creator, so you could be entering an agreement that lasts your entire lifetime and then another 70 years.

‘It is often increasingly hard to tell if one is being offered a good publishing deal,’ says Kate, ‘or something which is smoke and mirrors. The crucial thing is to be sure that you’re getting a fair deal and that you do not unintentionally give away too many rights, or give them for too long, or on unfair terms.’

I was once offered a contract for a novel I’d written, committing the publisher to print in ebook format. In their emails, the publisher explained that if ebook sales took off, they would then print in paperback. This seemed logical, because many new fiction authors are launched digitally first. Yet the contract didn’t state that. There was no contractual commitment to publish in print format. However, the contract wanted me to grant the publisher the print rights to the book as well as the ebook rights.

I asked if the publisher would include a clause committing them to the print production of the novel, once ebook sales hit a specific number. The publisher declined my request. Had I signed that contract, the publisher would have had the print rights to my novel, without being committed to exercise those print rights. That would have prevented me from offering the print rights to anyone else.

Legally, a publisher only has to do what the contract obliges them to do. If a publisher promises to do something in an email, ask to have that commitment inserted into the contract. If they won’t, proceed with caution.

Subsidiary Rights

A literary agent will retain as many rights as possible in your work, because they are experts in rights exploitation. However, if you’re unagented, it can make sense for the publisher to market some of your subsidiary rights on your behalf. I didn’t have an agent when I signed the contract with Hodder, so they’ve exploited some of my subsidiary rights. They successfully sold the foreign rights to One Hundred Ways For A Dog To Train its Human to North America, Portugal and Italy. Last year, 12 years after the book was first published, they sold the Icelandic rights.

Royalties

This section can stretch to several pages. Royalties vary between formats and are often quoted at two levels: at RRP (Recommended Retail Price) and net receipts. A book has a recommended retail price. Small businesses, such as independent bookshops, buy their stock from publishers with a small discount from the RRP, and you would normally receive a royalty based on the RRP. So a 10% royalty based on a book with a RRP of £10 is £1.

Larger organisations, such as Waterstones and Amazon, will negotiate higher discounts, so those royalties may be based upon the publisher’s net receipts (what the publisher actually receives) for these transactions. If Amazon buys that £10 book for £4, the publisher only receives £4, so a 10% royalty of net receipts is £0.40p.

Accounts

These clauses clarify when you can expect to receive your royalty payments. Traditional print publishers commonly pay every six months, and three months in arrears. This means that royalties will be paid on books sold between January and June at the end of the following September. Ebook royalties are sometimes paid more frequently, particularly by smaller independent publishers.

Termination

There should be a clause clarifying how a contract can be terminated (sometimes when one of the other clauses has been breached by either party). It is usual for all rights to revert back to the author, if the publisher goes into liquidation or administration.

Many writers are frightened when it comes negotiating, particularly when faced with several pages of clauses. I was scared when the Society of Authors gave me the detailed feedback on my contract with Hodder & Stoughton. I was grateful I’d been offered a contract in the first place. I pictured myself like Oliver Twist, going up with my begging bowl, asking for more. But, those were the thoughts of a nervous writer, not of a business person.

With the Society’s feedback, I plucked up the courage to enquire if Hodder & Stoughton would make a few changes. They did, and I wasn’t treated as some precious author throwing his toys out of the playpen. In fact, I think I was respected more, because it demonstrated I took the contract seriously. Negotiations were business-like, and as a result I secured a contract with better terms for me.

‘The important thing,’ says Kate, ‘is to be realistic about what changes to request. In my experience there is often much more scope for negotiation than authors fear. It depends upon the nature of the work and what sort of changes you are seeking.’

Many writers worry that making a fuss may result in the offer to publish being withdrawn. Kate’s experience suggests this is not the case, even when there is little room for negotiation. ‘If you are commissioned to contribute a component to an established educational course, for instance, many of the terms may be non-negotiable. Even then, at worst, it is likely to be: “it’s take it or leave it”, rather than “deal off.” And if “deal off” is the response, that publisher never really wanted you in the first place.’

Receiving an author contract is a joyous moment. It’s an incredible achievement in any writer’s life. But it’s also a responsible moment. Be business-like. Seek professional help. And then you can reap the rewards of your creativity.

Business Directory

Members of the Society of Authors and the Writers Guild of Great Britain can use those organisations’ contract vetting service. A publishing contract may qualify you for membership if you’re not already a member, and the membership fee is worth the cost of the service alone.

www.societyofauthors.org

www.writersguild.org.uk

The Society of Authors produces a detailed 15-page Guide to Publishing Contracts, which is free to members, or £10 to non-members.

http://www.societyofauthors.org/guides-and-articles

The Society of Authors CREATOR campaign aims to improve authors’ contracts: http://www.societyofauthors.org/creator-campaign-fair-contracts

© Simon Whaley

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