Contracts
A book publishing contract balances the substantial investment of the writer's work with the financial and professional investment from the publisher.
The contract will detail such things as royalty payments and the rights the publisher wants the licence to use. Once you receive a contract seek legal advice, or approach a literary agent about getting representation. You want the best deal you can get and the publisher is also seeking the best deal for themselves, so it is important that both parties are happy with the contract.
A contract is the legal document that establishes the relationship between the creator of a work and the person or organisation that will produce or publish the work.
A contract needs to have four elements before it is legally binding:
An offer. For example, a publisher offers a writer $500 to use the writer's work in a magazine.
An unconditional acceptance of the offer. If the writer asks for ten free copies of the magazine, this is a counter offer, and the contract is not made until this is accepted or another arrangement is negotiated and agreed by both parties.
A 'valuable consideration' must be exchanged. In this example the publisher has the benefit of using the writer's work and the artist receives $500. 'Valuable consideration' does not have to be financial, however. A free copy of the magazine could be enough, but the writer needs to be satisfied that this reflects the value of their writing.
An intention to be legally bound. Both the publisher and the writer should understand that they are creating a legally binding contract.
Important things to consider
Parties: The two parties to the contract must be clearly identified. If either party is incorporated the contract needs to include the Australian Company Number or the Australian Registered Body Number.
Copyright owner: The contract should state the name of the copyright owner.
Which rights are granted: The contract must clearly set out which rights are being granted. In many cases, it can be important to state clearly what rights the author is retaining.
Duration: The contract should clearly state how long the rights are granted for.
Territory: The contract should clearly state where the rights may be exercised, for example, Australia, or Europe excluding the United Kingdom.
Description: The contract should contain a clear description of the work over which rights are being granted.
Assigning rights to third parties: The agreement should prohibit the publisher assigning or licensing any rights to a third party without the author's consent.
Alterations: The contract should prohibit the publisher from making any alterations to the work without the author's permission.
Payment: The contract should clearly state how the author will be paid, and the amount that the author will be paid. There are a number of ways that writers are paid for their rights, for example royalties (a percentage of the income from sales of the work), an up-front fee, or a combination of a non-returnable advance against royalties and a percentage of income from sales. See Contracts and Payment.
Inspection of accounts: If the author is being paid royalties, a contract should state that the publisher will provide a regular statement of how much income it has received and how much is due to the author. The author should have the right to inspect the accounts on request, and where an error is found in favour of the author, the publisher should be required to cover the costs of the audit.
Publishing and marketing: The contract should require the publisher to publish and market the author's work within a specific period of time (for example, within one year of signing the contract), and to continue to do so.
Attribution: The publisher should be required to make sure that the author's name appears whenever the work is reproduced.
Warranty of originality: Many contracts require the author to guarantee that the work is original and does not infringe anyone else's copyright.
Termination: Where the contract allows continued use of a work, it should set out the grounds on which the contract can be terminated. For example, if a publisher ceases to market your work, or if they breach any other terms of the contract, or the publisher goes into liquidation or is declared bankrupt.
Sign and date: The agreement should be signed by both parties and dated.
Sense of proportion: The most important thing with contracts is to keep a sense of proportion. A contract for the publication of a novel is clearly more important than that covering the publication of a short story or poem in a small literary magazine - there is more money involved, and the success or failure of a novel will have a greater impact on a writer's career.
In many cases standard contracts or clauses have been negotiated between publishers and professional associations. Publishers will generally see these clauses as non-negotiable.
Useful Resources
Standard contracts can be obtained from:
- The Arts Law Centre
The Australian Copyright Council
- The Australian Society of Authors (books) Also offers a contract advisory service for members.
- The Australian Writers' Guild (film, televison, theatre and radio scripts)
Good Reading
- ASA Contract FAQs Link
- Between the lines