Deal Contract: Everything You Need to Know
A deal contract is an agreement used in the creative and entertainment industry to set the rights and responsibilities of parties. 4 min read updated on September 19, 2022
Book Publishing Contracts: Checklist of Deal Terms
The amount and delivery issues contain the following:
1. Rights Granted, Including Form, Language, Market, and Time
A. Copyright ownership
- Author own; all rights are reserved to author except where stated otherwise.
- Consider reversion or termination of the contract if the agreement contains a work for hire clause.
- Copyrights shall be registered in author's name.
B. Territories
C. Subsidiary rights: This includes reserved and granted rights to the first serial, second serial, reprint, local and foreign, TV, translation, audiocassette, electronic, multimedia, merchandising, and commercial subsidiaries.
- How proceeds will be shared (first serial 90%, UK and foreign 75-80%, other 50-66%).
- The subsidiary rights licenses controlled by the publisher must seek approval of the author or their agent.
- Pass-through provision (maximum of 30 days pass-through after repayment of advance).
- The author holds rights to dramatic, film, radio, TV, and merchandising.
- The author holds rights to title, characters, settings, in the case of fiction with potentials for series.
- Electronic, audio, video, and emergent technologies.
- Book club rights: make sure you get reasonable royalties.
- The author shall become the owner of rights the publisher fails to exercise within a reasonable period such as three years after publication.
- Put a clause on the general reservation of rights: the author retains any rights not explicitly granted.
What Information Should the Amount and Schedule of Advance and Royalties Contain?
2. Proportion and Schedule of Royalties and Advance
A. Advances should be nonrefundable;
- Author should receive first proceeds even if the manuscript were rejected.
- The ideal situation is to receive half on signing, 1/4 when you deliver half of the manuscript, and 1/4 when the manuscript is accepted.
- Don't accept payment on publication .
B. Royalty rate (list price, net of freight pass-through vs. net receipts)
- Hard cover: 10 percent for 5,000 copies; 12.5 percent for 10,000 copies, 15 percent for 15,000 copies.
- Mass market paperback: 6-8 percent on first 50-50,000 copies, and 10 percent above that number.
- Trade paperback: 6-7.5 percent on first 25,000, and 9/10 percent on more.
- E-books: 20-50 percent net; highest print rate.
- 6-15 percent net on academic and scholarly publications.
C. Bonus payments or higher payments in the following situations:
- Book club sales
- Appearance on bestseller lists
- Award winner, e.g., NBA, Pulitzer
- TV or motion picture development
- Earn-out advance
D. Discount schedule:
Separate bulk sales to specialty retailers from premium sales to businesses and share the costs of heavy discounts.
E. If the book contains third party content such as advertising (excerpts from the publisher's other works are not included), the author receives 50 percent of the fees.
F. Generally, authors and illustrators of children's books share the proceeds equally unless one was hired by the other to do the job.
What Information Should the Amount and Delivery Issues Contain?
3. Delivery Issues
- The deadline should be reasonable.
- It should state the format in which the manuscript should be delivered such as Word format, CD or disk, hard copies, sent by email, and others.
- If the manuscript requires illustrations, tables, charts, or photos, the author should know when to submit and who will pay for the materials.
- It should also cover when the author should submit permissions and releases and who will foot the bill.
What Information Should the Amount and Acceptance of Manuscript Contain?
4. Acceptance of Manuscripts
A. Define the type of work
- Is it fiction or nonfiction?
- Details of reading level: Is it a picture book, middle reader, college level, YA, or adult.
- Attach sample chapters or illustrations and proposal.
- The range of word count.
B. The publisher has to review proposals and either accept or reject periodically.
C. The publisher should comment about the standard whether it is satisfactory or fit for publication.
D. The author is entitled to revise the submission if the publisher rejects it.
E. Editing.
The author may edit the work and is entitled to compensation after a threshold.
If the author requests for some changes after reviewing galleys, the changes will be made at no cost to the author except where the cost is higher than 10 percent of composition cost. It the errors are from the publisher or printer, no charge as well.
What Information Should the Traveling Clause Contain?
5. Commitment to a Specific Editor (Traveling Clause)
The author or publisher will choose a new editor if the old one is removed.
The author may terminate the contract if both parties cannot reach an agreement.
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