From Kristine Kathryn Rusch:
Writers tend to go through their business life like Pokémon Go players, looking for something that isn’t there, hoping to score a magic number of points, and not seeing what is there.
It’s impossible to show you all the bad contract terms. I’ve delineated several that you need to watch out for. I’m going to go through some important ones quickly in this blog post, and then look at a few more major terms in the next few weeks before we go to agents and attorneys.
After that, folks, you’re on your own.
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Definitions: Make sure all of the important and dicey terms in your contract come with an attached definition. And make sure that definition is in your favor, extremely clear, and very narrow. The biggest and most important definition in modern contracts is the definition of the word “net.”
Most contracts leave out the definition of the word “net” altogether. Those contracts assume, apparently, that we all agree on what the word means.
Here’s the thing about contracts, folks. Contracts create their own language and their own definitions. So if the word “net” is undefined, it means whatever someone wants it to mean.
If the publisher does define the word “net,” the publisher often does so in a way that benefits them. (Horrors! They don’t do that in other things…oh, wait, never mind.)
Publishers have moved to “net” in royalty payments at the same time as the rise in ebooks. But that’s not why publishers did it. They did it for the same reason that they have discount clauses in the contract, such as the ones we discussed in last week’s blog, to make sure the writer gets almost no money for the books the publisher sells.
If the publishing contracts end up defining the word “net,” then the clause usually looks something like this:
As used herein, the term “Net Receipts” means monies received by the Publisher on the sale or license of the Work after all discounts, fees, and returned copies have been deducted, and before addition of freight charges and/or handling charges.
It’s all very, very loosy-goosy. Monies received by the Publisher. I suppose you can audit for that, but there’s lots of room for dispute in that language. And lots of room for abuse.
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Basket Accounting: speaking of screwing the writer, let’s look at this old favorite, that has existed since the 1970s. Basket accounting refers to the fact that the publisher throws all of the books in one contract into the same “basket” before paying out royalties.
So if you have a three-book contract, and book one sells 5 times its advance, but books two and three never earn out, you probably won’t see a dime in royalties.
If each book were accounted separately, then you’d receive royalties for book one, making you significantly more money.
The clause is not called the “basket accounting” clause. Every contract does it differently.
And I have to tell you: in this modern world, it’s a lot more probable that you’ll get a basket accounting deal if you have a multiple book deal with a publisher. That publisher will guarantee that you don’t see a dime in royalties by underpublishing at least one of those books.
The best way to avoid this?
Have a one-book contract. Never ever ever sign a multiple book deal, no matter how much they offer you.
Traditional publishers and agents will tell you it’s in your best interest to sign a multiple book deal. After all, you’ll get money for years, and you’ll know how much. But you won’t necessarily get actual money for years, especially if there’s an “acceptance” clause in your contract. (Meaning your book is not considered publishable until the publisher deems it “accepted.”) And there’s no guarantee, in this publishing environment, that your publisher will be around five years from now.
Besides, if you have a one-book contract, and your book is successful, then you have the opportunity to negotiate a better contract for book two. And with the rise of indie publishing, if you can’t get a contract for book two, who cares? You can publish it yourself.
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Time limit on publication.
This one is sneaky. It caught me on my very first novel. What you want here is for the clause to read in your favor. Something like:
If the Work is not published within two years of the date of this contract, the contract terminates, and all rights revert to the author.
Usually this clause isn’t quite so writer-friendly. But something like this clause is in most good publishing contracts.
The contracts that leave it out—well, the publisher never has to publish the book.
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Why have the audit clause? Because right now, you’re going on faith that the publisher will be honest with you. They have no reason to accurately calculate your royalties and payments. Publishers have never been accurate in their royalty calculations. Never. Why should they start now?
So, get an audit clause on your book. Be prepared to use that clause, especially if you have royalty clauses in your contract that are different from the norm. Because publishers might “accidentally” default to the old way of doing things, and only shape up if you prod them.
An audit clause prods them.
Link to the rest at Kristine Kathryn Rusch
Here’s a link to Kris Rusch’s books. If you like the thoughts Kris shares, you can show your appreciation by checking out her books.