Saturday, January 9, 2016

Contracts

Contract, royalty agreement, publishing agreement…no matter what the name, it is the legal agreement between the author and publisher. It is a commitment by both parties, author and publisher, to fulfill the obligations outlined. As such, the importance of understanding the contract before signing it cannot be overstated.

At a very broad level, there are two basic types of publishing contracts, one in which the author retains the rights to the material and one in which the rights to the material are transferred to the publisher. There are myriad variations of these two basic types, but in a nutshell this is perhaps the most important aspect of the contract to understand. If the publisher is purchasing “all rights,” then the author is giving up all claim to the material, and as long as the publisher fulfills its end of the contract, there is usually no way for the author to reobtain the rights. In essence, the author would have to obtain permission from the publisher to reuse the material in any way. This may sound very harsh from the author’s perspective, but it usually is not. In fact, in nonfiction publishing, it is very common for the publisher to purchase all rights. On the other hand, if the publisher is not purchasing all rights, which is common in fiction, the contract should explicitly outline what the publisher can do with the material and which rights remain with the author. This includes both print and digital versions of the material, the latter being an area of constantly evolving usage and rights issues.

The contract should also explicitly state how the author will be paid for the rights being purchased. Just because a publisher purchases all rights doesn’t mean the author won’t be receiving payments over the life of the material. If the agreement is to pay the author royalty on all copies sold, then the author will receive money anytime the material is sold, even if the publisher has purchased all rights. Additionally, the publisher, even though the owner of all rights, cannot use the material anyway it sees fit without paying royalty to the author. So even though “all rights” may seem to be unfair to the author, it isn’t.

Another way the author may be paid for all rights to the material is with a one-time payment. This is usually called a work-for-hire situation. The author agrees to relinquish all rights to the material for a set amount. An important part of a work-for-hire situation to understand is that almost always the contract states the publisher can do whatever it wants with the material without any further compensation to the author. The wording is usually the other way around, that the author will not receive any further compensation for or have any further rights claims to the material in any form. It is as if the author was an employee of the publisher for a brief period of time and the work was created “on the clock.” This also may sound harsh on the author, but it is not. In nonfiction publishing, very often material is developed on a work-for-hire basis.

Be sure to understand the terms of the publishing contract before agreeing to it. Most contracts are designed both to protect the publisher and to fairly compensate the author. However, misunderstandings can occur. There is a famous example of an author of successful serial novels who didn’t realize the publisher had purchased not only the manuscript for the books, but the characters, until there was a conflict and the author tried to go elsewhere with the next books in the series and couldn’t. In essence, the author was in a work-for-hire situation and didn’t know it or didn’t understand what that meant. The contract is the legal agreement, and the terms of the agreement is what the courts will look to in resolving issues.

Tin Whiskers Publisher is a member of the Independent Book Publishers Association (IBPA). IBPA’s mission is “to lead and serve the independent publishing community by providing advocacy, education, and tools for success.” IBPA is a not-for-profit membership organization serving and leading the independent publishing community. Founded in 1983, it is the largest publishing trade organization in the United States. IBPA members pledge to uphold the organization’s code of ethics.

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