Key Takeaways

  • A deal contract is a legally binding agreement that establishes rights and obligations between parties, and its enforceability depends on proper drafting and execution.
  • Publishing contracts typically include provisions on rights granted, royalties, delivery obligations, and acceptance standards, but all deal contracts—regardless of industry—share core requirements like offer, acceptance, and consideration.
  • Essential terms to include are payment schedules, timelines, intellectual property rights, warranties, confidentiality clauses, and dispute resolution mechanisms.
  • Common mistakes include failing to define scope, omitting remedies for breach, and neglecting governing law or jurisdiction clauses.
  • Before signing, parties should review obligations, assess risks, and confirm that the agreement is fair and enforceable.
  • If disputes arise, a well-drafted deal contract provides remedies such as damages, specific performance, or termination.

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.

Core Elements of a Deal Contract

While publishing contracts have industry-specific clauses, all deal contracts share certain universal elements:

  • Offer and Acceptance: One party proposes terms, and the other accepts them without material changes.
  • Consideration: Each party must exchange something of value, such as money, goods, or services.
  • Mutual Assent: Both sides must clearly agree to the same terms, avoiding vague or incomplete provisions.
  • Capacity: All parties must have the legal ability to enter into a contract.
  • Legality: The subject matter must be lawful.

Without these foundational requirements, a deal contract may be deemed invalid or unenforceable.

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.

Payment and Performance Terms in Deal Contracts

Beyond royalties, most deal contracts should address:

  • Payment Structure: Whether payments are lump-sum, milestone-based, or recurring.
  • Performance Standards: Clear expectations for quality, timeliness, and deliverables.
  • Late Payments and Penalties: Interest rates, fees, or suspension of services if obligations are not met.
  • Contingencies: What happens if outside events (such as supply chain issues or regulatory changes) affect performance.

These terms protect both parties by ensuring predictable cash flow and accountability.

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.

Warranties, Liability, and Risk Allocation

Deal contracts often include warranties—promises that the goods or services provided meet certain standards. Common clauses cover:

  • Quality Warranties: Assurance that products are free of defects.
  • Non-infringement Warranties: Guarantee that no intellectual property rights are violated.
  • Limitation of Liability: Caps the amount one party must pay if things go wrong.
  • Indemnification: Requires one party to compensate the other for specific losses.

These provisions allocate risk fairly and reduce exposure to unforeseen liabilities.

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.

Confidentiality and Intellectual Property Rights

Deal contracts frequently involve sensitive information. Clauses should cover:

  • Confidentiality: Preventing either party from disclosing trade secrets or private data.
  • Ownership of Work: Clarifying whether the creator or the buyer owns intellectual property produced.
  • Licensing Terms: Defining scope, duration, and exclusivity of any rights granted.

Clear IP and confidentiality clauses help prevent disputes over ownership and misuse of proprietary information.

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.

Dispute Resolution and Governing Law

Even carefully drafted deal contracts may encounter disputes. To prepare, agreements should specify:

  • Governing Law and Jurisdiction: Which state’s laws apply and where disputes will be resolved.
  • Arbitration or Mediation: Whether parties must attempt alternative dispute resolution before litigation.
  • Attorney’s Fees: Which party pays legal costs in the event of a dispute.
  • Termination Rights: Circumstances that allow one or both parties to exit the contract.

Including these provisions ensures predictability and helps avoid costly, prolonged litigation.

Frequently Asked Questions

  1. What is a deal contract?
    A deal contract is a legally binding agreement that defines the terms of a transaction, including rights, obligations, and remedies if breached.
  2. What must a deal contract include to be valid?
    It requires offer, acceptance, consideration, legal capacity, and a lawful purpose. Without these, it may not be enforceable.
  3. How are risks managed in deal contracts?
    Through clauses on warranties, indemnification, and limitations of liability that allocate responsibility fairly between the parties.
  4. Can deal contracts protect intellectual property?
    Yes. They can assign ownership, set licensing terms, and impose confidentiality obligations to protect sensitive information.
  5. What happens if a deal contract is breached?
    Remedies may include damages, specific performance (forcing the party to perform), or termination of the agreement.

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