Contract Law (With Special Guest Amie Gibbons)

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There are certain milestones with every blog.  First post.  100th post.  That post that summons a scribe demon from an alternate dimension and leads to a 30 minute write off where you save humanity at the cost of truly epic carpal tunnel.   Well, two out of three of those have happened on this site.  So, while I’m waiting on that portal to finish coalescing and conducting my wrist exercises, I’ll turn the wheels over for another major happening: first guest blogger.

Amie Gibbons and I actually knew of each other through mutual friends before we met in person at Libertycon last year.  “Though she be but little, she is fierce” seems to get tossed around a lot with my friends, but I think Amie’s kilowattage / kilogram ratio is as high as her IQ.  Without further ado, here is Part 2 of her discussion about author legal issues.  (Go here for Part 1: Copyright Basics over on Cedar Sanderson’s blog, Cedar Writes.)

[Update] Welcome Mad Genius Club Readers!  I have other posts on writing if you’re interested as well.  Feel free to poke around.


Contracts for the Writer (Amie Gibbons)
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As always, this is not legal advice, merely generalities and opinions by a lawyer that loves the sound of her keys clacking on the keyboard. I am a lawyer, I am not your lawyer. If you want legal advice, go hire a lawyer.

In the last post, I wrote about the generalities of copyright law for writers. This one is what comes after that. What comes when you have the finished piece and you know your copyright rights, and you are selling them to a publisher and you’re looking at a contract.

Well, first up, most publishers have a form contract they expect you to sign and if you don’t want to, they’ll tell you it’s standard across the industry and you can take it or leave it. If you leave it, don’t worry, there are a hundred authors behind you who will have no problem with it.

That is one of the big things to look at in contract negotiations. Does one side have more bargaining power than the other? Usually the answer is yes. Unfortunately for writers who are set on going trad pub, the answer is extremely yes. The publisher has all the power because they don’t really need you. Unless you have already made it huge like that Fifty Shades woman and they want to get on board the train, you’re replaceable.

Does that mean you can’t try to negotiate? Of course not. Hire an IP lawyer who specializes in author contracts to look at the contract, to explain it to you if need be, and to go to the table to negotiate on your behalf.

First rule of negotiations, you never send the person with the power to say yes to the table.

Why? Because if you as the author are at the table, they can pressure you right there to agree to something. If your representative is there, there is nothing they can say to get the rep to say anything but, I’ll take it to my client, because the rep legally cannot say yes, no matter how good the deal sounds. Even if you tell them they can say yes if the deal has XYZ terms, they’ll still most likely say they’ll take it back to you because they know how to negotiate and that no legit deal requires you to say yes in the room.

Again, will this help if the publisher says this is the form contract that is standard across the industry so you will take it or leave it? Probably not. But you never know. There might be a few things that are just egregious to the author that publishers have in there because they know they can get away with it, but really don’t mind dropping if you ask.

But lawyers cost money.

Yes, yes we do, especially IP attorneys.

And isn’t that what my agent is for?

Yeah, that’s what I thought starting out. From what I’ve heard (and keep in mind, this is what we lawyers call hearsay) somewhere in the past twenty years, agents stopped working like Bebe on Frasier to get their client the absolute best deal in whatever underhanded, manipulative way possible and you love them for it because they’re on your side, and they started working as a gatekeeper for the publishing houses that the authors have to pay for.

Now, they do stuff after they get you the deal, so I’m not saying agents are useless. And I’m sure big name authors love their agents and the agents really earn their fifteen percent by organizing stuff for the author and shopping around stuff like film rights.

What I am saying is from what I’ve heard, they no longer work to get you the best deal in publishing houses. Their job is to shift through the thousands of manuscripts, grab the good ones, offer to rep you for a percentage, and then to shop the manuscript around to the publishers to get the publishers to say yes, and you’ll take what they give you.

Agents are not advocates, they are salespeople. Again, I’ve never worked with an agent, I’m sure there are good ones out there that bust their butts to get you a good deal as well as get you in, but even if there are, they have the same problem you do, and your IP lawyer would. The publishing house can say that’s nice when they try to get you a better deal, and move on to the next agent, IP attorney and author who do want to play ball by their terms.

I can’t help with any of that, but I will say, no matter what, never sign anything you are not comfortable with, and never ever sign anything until you have read through the entire thing and understand the entire thing.

I swear legalese is not as daunting a language as TV makes it out to be. It’s a very precise language, and provisions will make references to other parts so you’ll have to jump to those and reread them to understand this one, but it’s not actually a different language from English.

Now, most of this is just me saying rights in general, but technically the copyright is split into a bunch of little ones, a bundle made out of sticks of rights, if you will.

So one thing you want to look at is what rights are they buying? This includes, but is not limited to: print, ebook, audio, international, and subsidiary rights (usually these will be listed out too, and these are the things like movie deals, merchandizing, translations, some people consider ebooks and audio books part of these, but it doesn’t really matter, what matters is exactly what is listed out in the contract. They aren’t going to just say subsidiary rights, at least they shouldn’t, they will list them out. If they don’t, ask for that change so they are all listed.)

So if you are able to negotiate around the publishing house and keep your ebook rights (not happening unless you’re already a huge indie hit, but hey, it’s an example), then they sell the paper ones and you get royalties off that, but you sell the ebooks and keep a hell of a lot more royalties off those. If you keep the rights around translations and/or to sell internationally, then you could go to publishers overseas and get deals with them separate from your deal with your American publisher, or just sell indie overseas.

You get the idea. Make sure you know what rights you are giving up specifically. Here, I’m talking about them in a bundle because it’s simpler, but in real life, they are separate. The publishing house could buy all or only some of them, and they could also have some of the rights have certain provisions with them, and different provisions for other rights. For example, they could say international, translations, and movie rights revert back after ten years, and print, ebook, and audio never do.

I’m not saying they would do this, or wouldn’t, I’m saying you need to know exactly what you’re giving up and for how long.

So then you ask, what’s egregious? What are terms I absolutely do not want in there? And what are terms I do want in there?

Wellllllll. A good resource for a lot of this is a blog called The Passive Voice. He’s a lawyer who goes into all of this in a lot my detail in many, many posts, and is where I got some of the horror stories and examples I based my opinion on.

One of the big ones is what I just used in my example. When do your rights revert back to you?

There absolutely must be something in there about reversion of rights. What does that mean? If there is not, there’s nothing in the law saying it automatically reverts back to you after so and so many years or some triggering event. No. Those need to be stated in the contract. The contract is the governing law on this.

You are selling your rights, and you want to make sure there is a set period of time for that sale. If you sell your house and the buyer dies, you don’t get the house back. That’s not a great example since IP is pretty much as far away from real property as you can get on the property spectrum, but you get the idea. If you sell them completely, they are gone completely. So, there should be something saying how many years the publisher gets the rights.

This could be something like ten years after publication or seven years after the book is no longer in print. Something like that. Make sure that is very specific, as in, no longer being printed out in physical books. Don’t just assume they mean once they stop printing physical books. Because “in print” means physical and ebook usually (as an aside, there’s almost always a definitions part in a contract, and they should specifically define what each term such as “in print” means in the contract).  There’s no reason for them to take the ebook down, so in reality, it could stay up there forever and you never get your rights back.

Also, make sure there’s a reversion provision for if the company goes out of business. This is probably just a problem for the smaller publishers right now, but it could be a problem for big ones in the future, and you never know.

If the company goes belly up, you want to make sure there’s a clear path to getting your full rights back. Like if they go out of business, or go out of the publishing business, the rights revert back to you immediately, or something like that. If they go out of business, and you don’t automatically get your rights back, what happens to your rights get fuzzy. The business could sell off their catalogue so someone else has your contract, they could just go bye bye without addressing this, in which case you may have to go to court to either use your rights or to stop someone else from publishing your stuff.

And you want to make sure there is something in there about remedies for nonpayment. And a schedule for the payment so you can point and say the publishing house has breached by not paying by the promised date of every six months, or whatever it is.

Another provision to look out for is the publisher having the right of first refusal on your next book, or on your next book under that name (by this I mean whatever you publish under, your real or pen name). Now, this sounds perfectly reasonable up front. You have a book, of course you don’t want to have to find another publisher for the second one, so having them look at the next book is perfectly fine.

No. If the contract just says right of first refusal, then that means the publisher can look at it, and do nothing. They can hold it forever and they aren’t breaching the contract because there’s nothing in there saying they have right of first refusal that they have to use within a specific time frame. So they can kill your career, at least under that name if the contract specifies that, by sitting on everything you ever write because they can.

Yes, I’ve heard of this happening, and yes, it was because the editor didn’t like the author.

Here, you want to make sure anything like this has a time limit and genre limits if you can. Right of first refusal on the specific book for a year after you give them the next manuscript, and they only have right of first refusal over anything for a specific amount of time, like five years or ten. And the right only extends to books specifically in the genre this book is in, like if it’s an urban fantasy, they only get the right of first refusal on other urban fantasies.

If they have the blanket right of first refusal, it means they can sit on everything and you’re dead in the water. It means you can’t decide to do one series as an indie author unless they okay it. No, the contract doesn’t specifically say that, but in practice, they get your books, and if you want to go indie instead of even trying another publisher, too bad, the contract doesn’t say they get the right of first refusal of any new book you want to sell to publishers, it says right of first refusal on any new book you create.

The reversion of rights and the right of first refusal are the two big ones I’d look out for. There are others. Basically anything in there without a specific limit is suspect.

Also, anything saying you can’t talk about this contract with others, and you can’t show the provisions online, basically saying in the contract you’re signing that you are agreeing to a non-disclosure agreement, of that contract.

Very fishy! I’m not saying there can’t be a good reason for that. But ask a lawyer about it if you see that in your contract. Think about it, you are selling rights, there’s no trade secrets in the terms of the contract, you’re not even in a possible copyright violation. because you’re saying in general terms what’s in there, not posting the exact language. (Whether contracts can be copyrighted or not is a different subject, I’m just putting it here so no one comes back with that as an argument for not talking about the terms of your contract.) So why would the publishers have that in there, unless they wanted to hide what authors are agreeing to?

Now, what do you do if someone doesn’t follow the contract and screws you over? This doesn’t happen often with a reputable company because word does get around, but, as I said up front, the publishers have the power. So if word gets around, it’s not going to deter enough wannabes to really hurt the publishers, unless it’s a small house or the company screws over a large percentage of their authors, or both.

You sue for breach of contract. But there’s the rub. Remember, lawyers are expensive. An actual lawsuit is going to cost you a hell of a lot to litigate. Possibly more than what you’d get if you won. And the publishers know this, which is why they pull that crap in the first place. This is why you’ll see things about class action suits, because the way to pay for lawsuits like this is to have hundreds of people join forces, because the cost of that lawsuit isn’t much more than the cost of an individual one.

Again, this does not happen often in the grand scheme of contracts. The main point of a contract is to lay out whatever everyone expects of everyone else in a deal. The secondary point is to plan for if something goes wrong, like if the business goes under, which is another variation of making sure everyone knows where they stand, and the third one is to give you a basis to sue if the other side pulls something untoward.

So, always make sure to read and understand everything in the contract, and run scenarios in your head of if I do this, or they do this, under this contract, what would happen. Try to negotiate out the particularly bad clauses, the ones that would take your rights forever or trap you if the editor so wishes, either through your agent or IP attorney, and never sign anything you don’t thoroughly understand.

And now for my not so subtle push of my new book, Psychic Undercover (with the Undead)Psychic Ariana with the FBI has to go uncover as a singer at a club to catch a serial killer… but things get complicated when it turns out it’s a vamp club.

amie-gibbons-cover

2 thoughts on “Contract Law (With Special Guest Amie Gibbons)

  1. Robin Munn

    I second the fact the legalese is not that difficult, at least not if you’ve played board games or card games. Especially games like Magic: the Gathering, whose rules are essentially written in legalese themselves. I once defended a traffic ticket (unsuccessfully, because there was a fact I wasn’t aware of when I prepared my defense), and the judge later asked me if I was a lawyer — because unlike the vast majority of people she saw in her courtroom, I had prepared my defense ahead of time, and knew what I was going to argue. (AND when the fact that I wasn’t aware of was presented to me, I said, “Well, that destroys the rest of the argument I was going to present. Never mind,” sat down, and didn’t contest the ticket any further.) I didn’t tell her, “No, I’m not a lawyer, but I used to play Magic: the Gathering” — I didn’t think she would have understood what I meant without a longer explanation than I felt like giving at the moment.

    But even though I can read legalese pretty well, contracts, for me at least, are still tricky. The tricky part isn’t reading what they say, it’s thinking of what they DON’T say. That rental contract that you read through and understood: did it specify what happens if the landlord decides to sell the house to someone else? Does the new owner have to let you rent until your contract is up, or can the landlord kick you out with a month’s notice? And so on. If the contract doesn’t cover a given contingency, it’s not always easy to realize that when you’re reading through the 18 contingencies that it DOES cover.

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