At this time of year, I often think about contracts. Even Santa’s last name sounds like a legal term. When I was growing up, December meant a contractual agreement with my parents and a single clause: good behavior in return for at least some of the dozens of items I put on my wish list.
I was raised in a mixed-marriage household, with one Jewish and one Christian parent. While they agreed to celebrate everything so nobody felt slighted, my father always referred to our Christmas tree as the “Hanukkah bush,” and my mother inevitably needed to pull something out of the oven rather than participate while Dad was blessing the menorah candles. The one area where they backed each other, though, was those contracts with me and my siblings. Despite a season where people speak a lot about spirits, I learned early on to abide not merely by the spirit of the contract but the letter of it.
Nowadays, binding legal contracts—not only pledges of good behavior in return for rewards—are part of my life. From the contract with my publisher to agreements with home contractors, I’m immersed in legalese. I confess to not understanding as much as I should, but I’ve learned to parse most of the jargon. Perhaps I radiate some aura of knowledge and authority as a result because, at least twice a month, I receive an email from a writing colleague with a request to review a contract they’ve received from a publisher or literary agent.
I’m always deeply flattered but also quite hesitant to offer an opinion, because I’m not a lawyer. In reply, I usually recommend a nonprofit group called Georgia Lawyers for the Arts (GLA) that does pro bono work and provides referrals to lawyers who have experience with entertainment law. There are similar organizations in most states.
If pressed, however, I’ll fall back into service (read: “pleaser”) mode and agree to have a look. Caveat emptor.
After you get past the whosoevers and wheretofors, these contracts come down to clauses that fall into two categories: “what you’ll receive” and “what you must give up or have to do in return.”
The “what you’ll receive” clauses are usually near the top, probably put there so authors will get caught up in heady thoughts of success and wealth beyond the dreams of avarice, reach for their pen, and flip to the signature line at the bottom. Compared with the “what you must give up or have to do in return” clauses, the promises to you typically are not lengthy nor numerous.
In a traditional publishing contract, you may be promised an advance of $X and/or a percentage of each book sold (once you have earned out your advance, if you received one) based on whether it’s a printed book (hardback vs. paperback), ebook, or audiobook, with different figures—or entirely different contracts with different publishers—for international book sales. Few things are standard in literary contracts, and these dollar amounts for advances and royalty percentages vary widely. Some friends of mine have received fortunes even before their book has been shipped to stores while others don’t see any money unless their book is purchased (and then not returned within a few months), in which case they might make a buck a book.
With a self-publishing contract, where you have hired a firm to prepare and electronically upload and/or print your book but the rights to the book remain yours alone, the profits from every book sold should be yours entirely as well. Beware of clauses that specify the price of your book or the percentage of each sale you will receive, unless it’s 100%.
For a hybrid publishing contract, where the author and publisher both have skin in the game, a publisher is doing more work than mere packaging, uploading, and printer management, so they will specify the split of profits on each book sold. There isn’t an advance given in a hybrid situation, because the author is paying some part of the product development costs.
If you’re getting less than 100% of the profits from each book sold, this is the first “what you must give up or have to do in return” item you will want to note. Sneakily, though, this figure is usually not specified—it’s implied by telling you how much you’re going to get, letting you decipher the difference between that amount and the selling price.
The other things you must give up or have to do in return are specified in great detail. I always recommend writers spend more time focused on this part of their contract than the advance and royalty section.
As the creator of the publishing contract, the publisher will probably have any number of things they’re asking you to give up or do to earn your coin (in addition to having labored to write a great book). Some examples I’ve seen in one pernicious contract alone, include:
– Making the author procure the ISBNs and file the copyright for their book
– Taking away the author’s right to make any changes to the submitted manuscript or even to review and approve the publisher’s edits
– Insisting on marketing and promotion activities to be determined at a later date and at the publisher’s sole discretion.
– Failing to offer free promotional copies to the author or copies at a discounted price that the author can sell at book signings.
– Not specifying regularly scheduled sales reports so authors with advances will know how close they are to earning out (at which point royalties can begin) and so authors already making royalties will know what sales those are based on.
One reason why many authors want to have a literary agent represent them is because you want someone competent on your side who can catch such gotchas. A note about representation contracts with literary agents: in one of the few cases of an accepted industry standard, they usually take 15% of the advances and/or royalties paid to the author by the publisher. The money comes to them, they take their cut, and they send the remaining 85% to the author. You should never pay an agent to read your work, edit it, pitch it to publishers, or for anything else. Agents only make money if you make money—therein lies their incentive to represent you to publishers.
Don’t take my word for any of this, though. You really should get a professional to review the agreement. Looking at these contracts on your own can cross your eyes and make you feel crazy. Watch out, though—as Chico Marx warned us in A Night at the Opera, “There ain’t no Sanity Claus(e).” Happy holidays, y’all!