A BRIEF LIST OF CONTRACT CLAUSES AND EXPLANATIONS
In traditional publishing, a legal contract binds the author and publisher together and outlines the rights and responsibilities of both parties. Since it is an author’s (or his/her agent’s) responsibility to negotiate a publishing contract, we encourage writers to have any offered contract reviewed by an attorney familiar with contract law so as to better understand the language and responsibilities it outlines; once a contract is signed, it is legally binding between both parties and difficult to amend.
As an additional resource to consulting a lawyer, we have defined and explained some specific points related to some standard clauses. This information is NOT a substitute for legal counsel, nor do these points address all the responsibilities and rights included in every contract.
1. Right of First Refusal
Point One—Right of First Refusal (ROFR)
Most traditional publishers have some sort of option clause. This can range from a 90-day exclusive right to consider the author’s next book, to a guaranteed option to publish any books in the series, to the right to see the author’s next book in a specific genre before other publishers. The point of this clause is to give publishers the first opportunity to buy an author’s next work and consists specifically of ROFR Right of First Refusal (ROFR) and Right of Last Refusal (ROLR). Some publishers are interpreting the ROFR as meaning that an author must send them all completed manuscripts they write, and that the publisher has the option to publish any of them under the terms of the last book. They are interpreting the ROLR to mean that even if the publisher has rejected a manuscript, the author must resubmit the work after they have received an offer from another publisher. This makes it nearly impossible for an author to submit a book elsewhere. In addition, these clauses are being written so that they are in effect for up to 20 plus years.
These clauses are considered predatory and unethical by almost all publishers and all writers guilds. They put the author in a position where it is extremely difficult to grow their careers. While we understand a publishers desire to build an author’s brand and retain their loyalty, we believe that most authors will stay with a publisher who values them and treats them fairly.
A better solution would be to come up with a clearly-worded option which gives publishers an opportunity to continue working with authors based on mutual satisfaction. A 90-day option on the next book in the same genre is the industry standard. Maybe for a first time author who needs more marketing the publisher might get an option on their next two books, but authors should not be tied to a publisher for anything they write for decades. The publisher should always have the rights to any additional books in a series.
2. The Exclusion Clause for Non-LDS Work (Non-LDS Exclusion)
Point Two--The Exclusion Clause for Non-LDS Work (Non-LDS Exclusion)
In some cases, a right of first refusal has been contractually amended to exclude work that is not written specifically for an LDS audience. The difficulties that have arisen in regard to this clause is that its use is inconsistent and its interpretation wide. Some authors are offered the clause automatically and therefore feel at liberty to write non-LDS content works and seek outside publication of said works. Other authors are refused the exception, even when it’s requested, obligating anything they write, regardless of LDS content, to fall within their contractual obligations. Publisher interpretation has in some cases rendered the clause nearly meaningless, with the publisher assuming full power (power not defined in contractual language) to designate what work they deem as LDS and thus falling under the ROFR, including work that has no LDS-specific content. If in practice, a publisher is defining LDS work as anything they feel appropriate for an LDS audience—not related to actual LDS content in the book—then the author is subject to the whim of changeable publisher tastes regardless of whether or not the author has the exemption, instead of both parties being protected by clear and mutually understood contract terms.
A solution to this concern would be to remove the reference to LDS works as other nationally directed LDS publishers have done, thus engaging a standard ROFR, which creates fair loyalty on the part of the author and a fair expectation on the part of the publisher. Because of the confusion and complication this clause has caused several authors, there is a growing stigma against using LDS publishers for fear that an author will be held back or otherwise disabled in their career pursuits by a publisher’s subjective interpretation of this clause.
The other acceptable option would be to define “LDS” as works containing specific LDS content, therefore contracting authors to keep their LDS content specific works with the publisher who is best positioned to produce and market those works. Having an ROFR and ROLR attached to LDS content specific works would be a reasonable accommodation for both parties.
3. Treatment of Acceptance, Contract, and Rejection
Point Three: Treatment of Acceptance, Contract, and Rejection:
There are varying amounts of times specified in publisher contracts regarding review of a submitted manuscript. In some cases a publisher can, as defined in contractual language, extend their review period to several months, if not years. If a work is then rejected, some publishers have been known to inform the author that they cannot use any revisions the publisher may have suggested during the review process or that if they find publication elsewhere, the publisher retains rights of distribution. These processes not only create severe complications to an author’s career, but can create ongoing obligation to a publisher that is cumbersome and severe. We feel this is an unethical practice, which leaves the author at the mercy of a publisher beyond the reasonable expectation.
In addition, contracts may be held until the book is in production, or at times months after a book is in stores, putting undo pressure on the author to sign a contract without time for negotiations. Whether this practice is intentional or simply a reflection of poor internal process, it breeds distrust between the author and publisher and creates increased complication for both parties.
We would suggest that publishers offer a reasonable time period for evaluation of an author’s next work and, if the work is accepted, extend a contract to the author quickly in order to allow adequate negotiation to take place before the publisher has invested editorial time and effort into the production of the project. We would further suggest that publishers offer standard ROFR clauses that do not hold ongoing proprietary right to a book they choose not to publish, allowing the author to pursue publication elsewhere unencumbered by distribution or similar entailments of a book they do not produce
An example of a standard ROFR timetable:
Author grants to Publisher an option on Author’s next book-length work that is for the same age group as the Work, to be exercised as follows. Author will submit to Publisher a proposal and three sample chapters for such work before offering rights in it to any other party. Publisher will have 30 days from its receipt of such work to advise Author whether it wishes to publish it and upon what financial terms, such 30-day period to commence no earlier than 45 days after Publisher’s acceptance of the Work for publication. If within such 30-day period Publisher does not advise Author that it wishes to publish such work, Author may offer it to other parties without further obligation to Publisher.
4. Return of Rights and Out of Print
Point Four: Return of Rights and Out of Print:
Authors largely trust their publishers to look out for their best interest, and this includes making sure their contracts have a Return of Rights (ROR) that is fair for both parties. Authors are increasingly concerned that some publishers use POD and digital printing to keep books forever in print, even when titles are no longer being promoted and actual sales are negligible. Also, some publishers retain rights they never use, severely limiting authors’ opportunity to utilize such rights themselves.
In the partnership between publisher and author, the publisher’s responsibility is to market and sell products while the author creates the product. We understand that backlist titles are important to small publishers and this makes them reluctant to return any rights even when they are not promoting them, but it is unfair for them to retain rights when they are no longer selling or benefitting the author. As it currently is now, most authors earn less than 10,000 for a book (and many less than 3,000), which means authors simply cannot support themselves or their family with full-time authorship, which forces them search for publishers who will return author rights when the bulk of the money has been made from a title.
The standard in the publishing industry is to include a ROR when a book is out of print based upon a predetermined level of sales. Author advocate groups actively recommend that publishers who do not give a ROR should be avoided. Experienced authors and many other industry professionals, including literary agents, view a ROR as a basic human rights issue as the lack of one denies creators the potential of their works. Additionally, without a ROR an author’s children cannot inherit in a meaningful way and the authors then leave no legacy. Yes, their descendants would receive royalty payments, but without continuing promotion, this is negligible. Many publishers consider authors part-time workers but more and more authors could write for a living if they were given a second chance at their intellectual property after the publisher made the bulk of their profits and are no longer interested in actively promoting the product at least enough to reach a basic sales level. We have no desire to prevent publishers from making profit from the titles they promote, but when that interest has moved on to newer titles we would like the chance to once again profit from our creations.
When a ROR is negotiated, the general wording of the out of print clauses in some contracts does not actually Return Rights, or in the rare case when they do, it is only shared rights, which basically precludes the author doing anything like rewriting and reselling the work. Additionally, rights that the publisher decides not to pursue—and often had no intention to pursue—are left beyond the authors reach completely.
Authors who are treated fairly will return to publish again and again with publishers who respect them and their intellectual property. Increased loyalty is a benefit for publishers offering a ROR.
We suggest that a clause could be added to ROR clauses in contracts offered by publishers allowing that when the royalties go below a certain point that authors could buy out their rights at a predetermined rate, perhaps five times the publisher’s net proceeds of sales from the previous year. This would mitigate the effect of the ROR to publishers by validating their position and still give authors a chance to earn a higher wage on their creations if they are willing to take responsibility for the reproduction and promotion of said works.
Examples of standard ROR timetables:
Example 1: If sales fall below 100 copies in any given six-month period, rights will revert back to an author for that book.
Example 2: In any 12-month period fewer than 250 units of the Work have been sold, or the Work has generated less than $250 in revenues for Author, the Work shall be deemed out of print and author may request back rights.
Example 3: Victoria Strauss lists her Harper Collins contract terms online. “If for two consecutive accounting periods neither the Publisher nor a licensee of the Publisher has printed copies of the Work...but the Work is available for sale from the Publisher or a licensee of the Publisher by some means of on-demand printing, or electronic transmission or reproduction and within those two accounting periods, the Publisher and its licensees, collectively, have sold less than 250 copies of the Work, the Work shall be deemed out of print.”
Example 4: “If the Work is not in print, Author may request in writing that Publisher keep the Work in print. Publisher will have six (6) months to comply. If Publisher fails to comply...then at the end of such six (6) month period this Agreement shall terminate and all of the rights granted to Publisher shall revert to Author. The existence of an individual print on demand edition or an electronic edition shall not constitute the Work being in print unless there are total combined sales of $500 or more a year for these editions.”
Currently, some publishers are including clauses that prevent their authors from self-publishing. The phrases used may not include the words self-publishing, but the language prohibits an author from self-publishing. This severely limits an author’s potential income and creativity. We caution all new authors to carefully read an offered contract for any language that may prohibit them from self-publishing.
Point Six: Confidentiality
Many contracts contain confidentiality clauses which prohibit authors from discussing their contract with anyone besides legal counsel. Please be respectful of this as you seek information from contracted authors.
7. Master Contract vs. Project Contract
Point Seven: Master Contract vs. Project Contract:
Some publishers offer a master contract to all new authors. Check the master contract for each of the points listed here. Authors may negotiate certain clauses in or out of a master contract with the publisher before signing.
Point Eight: Copyright:
Industry standard is that the publisher will register the copyright for an author. However, the author retains the copyright.
This webpage offers education to new authors of what different clauses mean and what is industry standard as these questions are becoming more common among up-and-coming writers. We have no desire to defame any company and will not make specific references to any publisher, but do not feel we can ethically continue to support and recommend contracts that in many ways have failed previous authors, resulting in a loss of intellectual property rights, potential income, and amicable relationships with publishers.