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More About Harlequin Contracts

8 May 2012

Per an inquiry after an earlier post about Harlequin, Passive Guy is not aware of any laws designed to protect authors from deceptive or unfair publishing contracts.

In the US, many contracts consumers commonly sign, such as for mortgage or auto loans or to obtain a credit card, are subject to statutory requirements for fairness, clarity, etc.

In PG’s preternaturally humble opinion, if some of the clauses and drafting techniques commonly included in publishing contracts used by some publishers (and agency contracts used by some agents) were found in consumer contracts, those provisions would be deemed void and unenforceable. In some cases, they might constitute consumer fraud and subject publishers to fines and penalties.

However, in the absence of consumer-type protections, the laws governing business contracts assume that each party to such contracts will watch out for themselves. If both parties sign a contract, the strong presumption is that each party understood what the contract meant and voluntarily agreed to be bound by it. In extreme cases, if a lawsuit were filed, a contract might be deemed unconscionable and voided in whole or in part, but that is a high hurdle to clear.

So, what’s an author to do?

When you sign up for a new Mastercard with your bank, you are wearing your consumer hat and can assume you have some protections against unfair and deceptive contract practices. When you sign a publishing or agency agreement, you have no consumer hat on and you should not assume a “standard” contract will be fair or equitable for you. You should also not assume you will be able to easily get out of that contract if you later find it to be unfair.

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

23 Comments to “More About Harlequin Contracts”

  1. How universal is the presumption that any ambiguity will be construed against the drafter? And have any of these common (or recently common) standards been held ambiguous?

    • That’s a basic principle of contract interpretation, Karen. A common argument is whether a contract provision is really ambiguous or just complex.

  2. You keep coming up with more and more reasons why I should never even consider dealing with a traditional publisher. 🙂

  3. Wouldn’t it be loverly if the Dept. of Justice were receiving copies of every contract and every royalty statement–compiling a huge database of information they could use?
    I don’t think these contracts or royalty statements are provided, in all their glory, to authors under any kind of cloak of secrecy, are they? The authors can legally send this stuff to anyone?
    Methinks DoJ needs are earful – to protect those who are systematically being abused.
    It seems mightily disingenuous to say that writers shouldn’t have signed the contracts they signed – that used to be the main route to validation and publication. They did the best they could at the time. Even those who didn’t like the terms often had the choice of signing or not, rather than looking for a better contract elsewhere, when it was so hard to get an agent.
    Looking at it from the outside, it seems the agents had the better deal: quick, take your 15% out of the advance, move on to next sucker. Just my uneducated take.

    • brendan stallard

      “Wouldn’t it be loverly if the Dept. of Justice were receiving copies of every contract and every royalty statement–compiling a huge database of information they could use?”

      Abe,

      When I first read about Konrath making so many of his fiscal returns online, I said little. I thought, that’s my English cultural refusal to discuss money. You won’t get English people to tell you the size of their mortgages, it’s just not done.

      However, as P.G./Konrath/Kristine and the others fight the good fight, I’m beginning to see that the ONLY thing that will change this completely monstrous situation for writers is complete transparency.

      I routinely peeve salespersons and lawyers all to hell, when I go over every millimetre of every contract that I sign. “Oh, it’s a standard contract,” they blythely bloviate.

      Looking at them contracts PG has online as standard, it seems to me that the writers have married the gold in the advance, and got the kids from hell in the aftermath. I wouldn’t sign one of them if ya paid me a million dollars and the check was delivered by Summer Glau!

      brendan

      • It has always been considered lower-class, unmannerly, to discuss money. And money can be discussed very crassly. But all this reticence allowed for the rich to live on credit, and the poor to be stuck with it.
        Money matters.
        I didn’t realize how little money some authors make. $.06 per book? That is absolutely horrid. With a chance, maybe, some day, to break out (cue Lottery music).
        With the Lottery, I’ve noticed a lot of ads lately reminding people that some few people actually win. Considering that most state lotteries by definition reserve a large portion of their revenues (50% typical) for the project the Lottery is supposed to support, you’d have better odds at a casino.
        I bet most romance readers don’t realize that the fat paperback they buy nets their favorite author less than a dime – and would be appalled if they did know.
        Money matters. A lot. And it is only dealt with fairly if it is out in the open, where at least the possibility of public shame might (note ‘might’) keep some publishers/employers/manufacturer a wee bit more honest. Only a bit, because of ‘creative accounting’.
        It is standard in Hollywood to understand that if you get a portion of the ‘net’ as part of your pay, you are not to expect any actual cash out of that. I’m glad I know that’s also true in publishing – but it is shameful.

  4. The fact that it’s assumed authors understand the contracts just as well as the publishers do shows the fallacy of thinking, “Oh, business is SO complicated! I’ll just sign with a publisher and everything will be taken care of!”

  5. Here’s a suggestion: take it to the readers.

    I just tweeted a link to the post on Konrath’s blog, but I also tweeted Harlequin’s “contact us” page. Don’t ask them to boycott, ask them to say what they think.

    And for your linking convenience here is the link to their contact us page:
    http://www.harlequin.com/articlepage.html?articleId=51&chapter=0

  6. PG – I ran into an instance where the publishing contract didn’t have an integration clause (or choice of law), and the publisher had made certain representations regarding marketing and promotion that were an inducement for this author to choose the publisher. Those promises were broken. One could assert the emails were part of the contract, no?

    And fraudulent inducement would still be available, would it not?

    (This is obviously not a big publisher, but it’s one that’s been around a while)

    • This certainly sounds promising, Pete.

      I am constantly amazed at how incompetently so many publishing contracts are drafted.

    • It might be different in America, but in Britain choice of law clauses are not always enforceable, courts will often use their powers in equity if they believe the choice of law clause is intended to remove legal protections or damage the weaker party.

      Courts can be very creative in interpreting contracts, too. One difference between the USA and the UK is that the courts have rulled that it is possible for a author to be treated as a consumer in a publishing contract.

      If you think about it, that could be significant for a lot of Americans who have sold British rights under American contracts. These rights may not be as enforceable as the publishers believe.

      • Of course, a lot of this is theoretical. The reality is, mostly it costs more to go to court than live with a bad contract.

      • Interesting points about UK law, Thomas.

        In the US, the courts of some states will set aside choice of law provisions if such clauses violate public policy or are otherwise unfair. The wording of some choice of law provisions can also provide some loopholes.

  7. Authors are too small and poor a group to get a real legislative push, but with the internet it could be possible for us to use our influence. I think that’s for the future, though, and publishers already have to face the risk of losing all their authors.

  8. A friend who is a lawyer (as I am not), but who is not acquainted with publishing or IP, mentions the concept of a “contract of adhesion”.

    As the notion was described to me, it seems entirely apropos of the typical publishing contract — “take it or leave it”, with extralegally-enforced consequences for leaving it, based on one party to the contract having the overwhelming preponderance of power. Since I don’t recall having heard of the concept being plead, it must of necessity be defective or somehow inapplicable. Does PG have a comment?

    • That certainly is one theory to look at if you’re trying to break a book contract, but it’s not a slam-dunk guaranteed winner in court, Ric.

      However, I think the combination of a contract lasting for the life of the author plus 70 years, unequal negotiating positions, take-it-or-leave-it contracts, deceptive contract clauses, opaque royalty statements and the likely refusal of a publisher to provide more detailed information without an audit could well combine to push more than one judge into a position where he/she would seriously consider terminating the contract.

      • Looking from the outside in, it doesn’t seem as if there are many slam dunks in contract law, PG. The matter is complicated enough that there’s almost always some chink in the armor for a sufficiently-clever attorney to discover and expand upon.

        What I was wondering was why I’d never heard of anybody trying “contract of adhesion” on. To the uninitiated (me), it looks like a better basis for, e.g., consumer protection against bad contracts than passing black-letter law, because it would establish case law and precedent that would be more flexible than anything a Legislature could come up with.

        • You’re probably right, Ric.

          There is a lot of overlap between contract of adhesion and unconscionability claims. The underlying principle is that a contract or part of a contract is so unfair that no reasonable person would agree to it unless forced or deceived into doing so.

        • Perhaps no one has tried it because the publishers are savvy in the area of knowing who the troublemakers are and giving back rights to those few?

          We all hear lots of “… and then, after all that trouble, my publisher decided to revert my rights after all.”

          In some ways, the contracts themselves are sucker-tests. Writers who sign the contracts in the first place are less likely to make trouble than those who asked for changes.

          IMHO, psychology plays a BIG part in contract law.

  9. Friends keep telling me “You should should send your books to a REAL publisher!” and I think maybe they are right until I read a story like this one. My books are my babies. This sounds like selling them into slavery.

    I happen to be reading a Harlequin romance right now (do you have any idea how hard it is to read a novel and type a blog comment at the same time?). Now I feel sorry for the author. I feel like I should send her a couple of extra bucks along with a sympathy card.

    And my babies are not going anywhere near that horrid publisher!

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