Home » Contracts, PG's Thoughts (such as they are) » How to Read a Book Contract – Assignments – Part 1

How to Read a Book Contract – Assignments – Part 1

21 May 2011

Passive Guy would bet that almost no one perusing his babblings has ever really read an Assignments clause.

“Wait,” you object, “I read all my contracts all the way through.”

“Very well,” PG responds with a cruel smile. “What did your Assignments clause say?”

PG would bet silence would ensue.

The right to assign a contract is the right to take whatever your obligations and rights under the contract are and give them to someone else. Sometimes money is involved, but, absent prohibition, you could assign your publishing contract for Ten Ways to Help Your Hickory Tree Grow Faster to your twelve-year-old nephew for his birthday. He would be disappointed, but you could do it.

The Assignment clause is one of those things that might not even be in the contract. That’s one reason why PG’s earlier cruel smile question might befuddle you.

One of the cool things about the right to assign a contract is that if the contract doesn’t say anything about it, the general rule is that either party is permitted to assign the contract. To be more specific, most Assignments clauses are, in reality, contract terms that limit the right to assign the contract.

Why do you care whether your book contract can be assigned or not?

Let’s pretend that you sign a contract with Venerable Olde Publishing, founded in 1893 by T.W. “Tightwad” Venerable. One of the main reasons you sign the contract is the opportunity to work with Venerable Olde’s Chief Editor, R.P. “Red Pencil” O’Grady, who regales you with charming stories of getting drunk with F. Scott Fitzgerald when R.P. was editing Scott’s manuscripts.

You fail to note the absence of an Assignments clause in your contract.

One lovely morning, you pause in your work on your next book for Venerable Olde Publishing, a biography of the first Hindu Swami to visit Alabama, to collect your mail. You receive a letter on expensive stationery from Tightwad III announcing he has sold out to a German company whose name he can’t pronounce and inviting you to stop by for lunch if you’re ever in Provence. He is sad to also announce that R.P. is being treated for cirrhosis and isn’t expected to return to work. Your new editor will be Hauptmann Adolph von Kleist who will be in touch with you shortly.

Von Kleist emails you 15 minutes later asking how many words you will write during the following day.

What sort of limitations might you have in an Assignments clause?

One common limitation in the real world is that the contract cannot be assigned without the consent of the other party. If you had one of those paragraphs, you might not have consented to von Kleist and company.

In the unreal world of publishing, I wouldn’t count on getting a nein-to-von-Kleist clause. To be fair to publishers, the publishing contracts may well represent the single most valuable asset of the company. The publishing company is the boss and nobody there wants to bother asking the peasants for permission to sell them to a new boss.

In the real world, sometimes the no assignment without consent is softened a bit by adding a provision that consent to assignment shall not unreasonably be withheld. That doesn’t really do much good because an unreasonable person always believes they’re acting reasonably, but such an addition does signal to a judge that the option to veto an assignment is not absolute.

In our von Kliest hypothetical, since the publisher is doing the assigning, you would prefer no restrictions on your right to say no . . . . if you could negotiate that right in the first place, which you probably can’t.

However, the absence of an Assignments clause cuts both ways.

While contemplating Assignments last night (doesn’t everyone?), PG pulled out a couple of publishing contracts that were lying around. (Pause to remind you that PG is anxious to receive more book contracts and agent contracts for his Contract Collection. For one thing, he’s tired of reading the ones he has because he already knows the ending.)

PG’s reading confirmed that neither of the contracts he examined prohibited assignment of the contract by the author. In fact, one contract specifically referred to the author’s assignees – the people to whom the author might assign the contract.

So, here’s a thought to end Part 1 of our discussion of Assignments: What might happen if, when you received your email from Hauptmann von Kleist, you phoned your attorney and had her draw up two assignment documents?

  1. One document would assign your rights to receive future royalties to a trust for yourself and your children.
  2. The other document would assign your obligation to write the Alabama Hindu Swami bio to your drunken Uncle Fudd. In return for a bottle of Jim Beam, he’d sign an acceptance of the assignment.

Contracts consist of rights and obligations. Absent prohibition, you can probably assign them separately.

Some legalistic readers might object that the nature of the obligations make them personal to the author, but P.G.’s adversarial response would be, “If that’s what the publisher believes, why wasn’t it written in the contract? After all, we are dealing with a contract the publisher wrote.”

Now, this may not quite simple as depicted, but PG needs to earn a nickel or two, so we’ll continue our discussion of Assignments in a couple of days. I’m just getting warmed up on the gotchas and as demonstrated by my double-assignment trick above, I’m thinking about some author-friendly gotchas.

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Contracts, PG's Thoughts (such as they are)

6 Comments to “How to Read a Book Contract – Assignments – Part 1”

  1. That’s interesting, obviously US contract law is different from UK contract law. Under UK contract law, the default position is that you can assign the benefits of a contract but not the obligations of the contract.

    To transfer the obligations of the contract you would either need a novation (which requires the consent of all parties) OR, in the alternative, a transfer of obligations clause permitting it.

    • Thomas – Thank you for the education on UK contract law.

      US law does sometimes distinguish personal service contracts – a contract for an actor to appear in a motion picture, for example – and designate the obligations under those as non-assignable. While one might argue that a publishing contract with an author is a personal service contract, it is customary to explicitly identify personal service contracts in the contract language. Generally speaking, the absence of such a designation would be evidence of no personal service.

      One reason why a publisher might not want to designate a contract as a personal service contract is that some US states – California is one – place limits on the term of a personal service contract. In California, a personal service contract cannot last longer than seven years.

  2. So? How did you know about my drunken Uncle Fud?

  3. Best laugh I’ve had in at least a week. It even got a grin out of the significant other (which lightened the mood after I explained that the typical new-author/publisher contract today appears to be for the life of the author plus seventy years).

    After Thomas E’s comment, I have to assume we wouldn’t be able to manage such a coup here in Canada, either — though the one personal service contract with which I’m familiar did explicitly “self-identify.”

    Realistically, US law might be more relevant: anyone trying to publish genre fiction here would be looking to NY publishers anyhow.

    • LP – I can’t speak to Canadian law, but you are correct that NY publishers will designate NY law to govern the contracts.

      I believe the California time limits for personal service contracts arose from movie studios signing neophyte actors who later became big stars to long-term contracts with pay that looked great to a neophyte, but was grossly inadequate for a star.

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