Publishing Contract Checklist

By Timothy Perrin

Contents

What is a Contract?
Offer and Acceptance
Consideration
How Do You Prove It?
Negotiating Your Contract
Content of the Writing Assignment
Copyright
Why Licence and not Assignment
The Problem of the Stamped Cheque
How to Negotiate the Price
Kill Fees
Electronic Rights
Versions of Contracts

What is a Contract?
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A contract is an agreement that the law will enforce. That is all. There is no magic toit.

Some agreements the law will not enforce. For example, an agreement to sell anotherperson into slavery, an agreement to marry or other agreements that for public policyreasons are not things that we as a society choose to enforce.

Generally, the law of contract involves commercial transactions where money or goodsare changing hands. The law looks for two things:

Offer & Acceptance

Consideration

Offer and Acceptance
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The question of offer and acceptance determines whether the parties to a contract wereever "of one mind" as to the terms of the contract (the lawyer’s Latin termis ad idem). There must be a moment when one party makes an offer and the othersays, "Yes." Not, "Yes, but…" Just a plain, simple, clear,unequivocal "Yes." Anything else is a refusal or a counter offer.

Few of us ever really nail down every single term of our agreements and the law willread in some terms but don’t rely on this. You do want your contracts to benailed down.

Consideration
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Consideration is the value that must flow each way for a contract to be enforceable.For example, if I promise to give you my car without your promise of payment or some otherthing of value coming back to me, the law will not force me to follow through on mypromise. There must be something of value flowing each way.

That value can be cash on the spot, a promise to pay at some time in the future, thecar, the promise to deliver the car to you next week, or the like. In other words, thevalue can be immediate or postponed; the law does not care particularly about the timing.

Without clear offer and acceptance and the mutual flow of value, there is no contract,that is, there is no promise that the law will enforce.

Of course, there are wrinkles and way in which the law will infer those elements. Whyelse would contracts be a year long course in law school? But for practical purposes, aslong as you make sure that your contracts have clear, unequivocal offer, acceptanceand consideration, you won’t ever have to learn about all those other topics.

How Do You Prove it?
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The courts do not treat an oral promise any differently than they do a written promise.The difference between the two is one of evidence. It is a lot easier to prove what theterms are of a written contract — they’re right there on the page — than anoral contract where the parties now say the terms were different.

That’s why you want your contracts in writing.

It’s a common situation where there is a written contract but one party says,"Yeah, I signed that but, it’s not what we really agreed. Instead, we agreed on this."In those situations, the courts are reluctant to look at the evidence of the discussions.They like the certainty of the written document. In other words, they will reject theevidence of an oral agreement and favour the written agreement.

There also arises the question of the oral variation of the written contract. After thedeal is done, you and the editor agree to bump the deadline by a month. Then the editorquits, the new editor looks at your written contract and say, sorry, Charlie, you are lateand I’m not paying.

The key is always to document all your assignments clearly and on paper. Even whenthere is no formal written contract, you can document your agreements with letters. It canbe as simple as the following:

This is to confirm my understanding of the agreement we reached on the telephone today.

I am going to write for you a 2,000 word feature article on fish farming in Kootenay Lake. It is due to you on December 1, 1996, both in hard copy and on an IBM compatible 3.5 inch floppy disk in either ASCII or WordPerfect 5.1 format.

I am licencing you first North American Serial Rights in the article with your licence to commence upon my receipt of payment.

Payment is to be $2,000, payable on acceptance of the article. You agree to review the article and make a decision on acceptance no later than December 15, 1995. If you do not reject the article by that date, then it is deemed to be accepted.

If you reject the article for reasons other than its quality, I am entitled to full payment.

If your understanding of our agreement differs from mine, please contact me by October 15, 1995, at which point I will be commencing work on the article.

Send that to your editor by fax and by mail. Make sure you cover all the points I willgo through below and allow enough time before your deadline for the editor to reply. Then,come the fifteenth, start work. You have clearly given them notice of your understandingand, if they allow you to start work relying on that understanding, if push comes toshove, the courts will likely enforce your understanding.

Negotiating YourContract
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The essence of any contract is the "deal"; what is being sold, what is beingpurchased.

A writer "assigns" or "licences" the right to reproduce what s/hehas written. But more than that, we "make to measure" pieces of writing to fitthe preconceptions and wishes of our customers. So, the first question — the one thatmust come before all others — is "What is it you want me to write?" You cannotprice the work until you know what you are doing.

Content of WritingAssignment
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Subject
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What is the subject of the assignment? Who or what are you to write about? A magazinearticle? Feature or short piece for the front or back of the book? Catalog for amanufacturer? Press Release? Exactly what do they expect?

Treatment
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What kind of approach are you to take? Light and breezy? Dull, gray and corporate? Lotsof anecdotes or heavy on facts? "Academic" or "popular"?

Length
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Words, pages or minutes? What is the length of the material you are to write? Or, areyou being paid by the hour or day?

Number of Sources
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For magazine work (and some other types) the difficulty and amount of time you willhave to put in often depends on the number of sources you have to interview for yourstory. Canvas your customer’s expectations. Is s/he expecting you to travel all overthe country and interview fifteen people? Do they want regional diversity; a source in theAtlantic Canada, another in BC? If you specify this now, when they come back at thelast minute with a list of four more people they want interviewed, you’ll be in aposition to agree... as long as you are paid for the extra work.

Date Due
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When does the customer expect delivery? Where?

Format of delivery (disk, paper, etc?)
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In what form does the customer expect delivery? Photoready copy? IBM formatted diskwith ASCII file? Macintosh disk? Via e-mail? Fax? On paper? (Remember paper?).

Additional Work/changes
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If the magazine changes its targets, how do you get paid more? You need to know exactlywhere the goal posts are and don’t let the customer move them.

Maximum Number of Rewrites
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How many times are you willing to rewrite this beast before you say "enough?"Some magazines are notorious for their demands for rewrites.

Work above and beyond contract
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How are you to be paid for work beyond the agreed parameters of the assignment? Inother words, if they do move the goal posts, how do you score a new touchdown?

Artwork?
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Does the assignment include any photographs, drawings or other artwork or will thecustomer provide these? If they are included, how is the quality to be assessed? Are yourextra expenses in providing these to be treated as expenses or are you expected to eatthem? Are you expected to hire an artist or photographer? (You should not; you are the writer,not the photographer. Do what you do best and let the shutterbugs make a living too.)

Galleys/approval of final copy
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Are they going to send you the galleys for you to review? Just for proof reading or toreview for substance? What if they have made substantive changes that completely changethe piece?

Byline?
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Do you get a by-line? Do you have the right to remove it if you are not happy with theedits?

Expenses/Disbursements
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What expenses are covered and what are not? Phone? Fax? Courier? Travel?

Copyright
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Copyright is the "exclusive right of the copyright holder to reproduce the work inany form."

As the creator of a work, you own the copyright in it.

Exception
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There are two exceptions to that rule. First, if you are an employee and you create thework in the course of your employment, the employer owns it. Second, if you sign anagreement with an American publisher that refers to your work as a "work made forhire" or "work for hire" then it is as if you were an employee for thepurposes of the creation of that work and the "employer" owns the work outright.

The American Society of Journalists and Authors (ASJA) and
the Periodical Writers Association of Canada (PWAC)
are both quite adamant in recommending that you never
sign a Work for Hire agreement.

License andAssignment of Copyright
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When you "sell" an article, you are really giving another person the right toreproduce your work. You do this by "licencing" the work — similar to"renting" in that you continue to own the right and just give permission.Alternatively, you can "assign" your copyright which means the purchaser nowowns that right and can do with it what s/he wishes including reassigning it to someoneelse.

Must be in Writing
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The Copyright Act requires that any licence or assignment of copyright must bein writing and bear the signature of the copyright holder. Therefore, if they don’thave it in writing, they don’t have it.

The Problem Of theStamped Cheque
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Some publishers send cheques that have stamps on the back that purport to give them allkinds of rights over your work and, if you want to cash the cheque, it looks like you haveto sign their stamp.

Wrong.

Don’t worry about it. The contract was made long before the cheque was issued andthey cannot now vary the contract. They owe you the money. They don’t have the rightto unilaterally impose new terms.

Cross out the offending material and endorse the cheque. If you want, cross itout and deposit it to your bank account without endorsing it. The bank will still put itthrough by stamping it "Pay to Payee"; it will just take a few days longerbefore it appears in your account.

A cheque, by definition, is a unconditional order to pay. The issuer of a chequecannot put conditions on it.

Why a "Licence" and not an "Assignment"
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There are several advantages to always licencing your work rather than assigning it.

At law, when you assign your work to a publisher in return for their promise to pay atsome future date and they don’t pay, you have a debt and you must then sue on thatdebt to collect. However, debt is a provincial/state law matter and, if you live outsidethe province or state where the publisher does business, you are likely to have a veryhard time collecting even if you win in court.

By licencing, you retain the ownership of the right and you can make it a condition ofyour contract that if the contract is breached, the right automatically reverts toyou. They don’t pay, they lose their licence. It’s that simple.

However, if you have assigned you copyright and they don’t pay, all youhave is your right to sue which is more trouble than it is worth most of the time.

Timing of payment
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When you licence your copyright, make it a condition of the licence that you be paid priorto publication. Then, if they publish without paying, you are in a much stronger legalposition. In particular, copyright is a federal matter in both Canada and the US. Federalcourts have jurisdiction right across the country.

Also, as copyright is intellectual "property", the courts treat it with someof the deference they have traditionally given to other property matters such as ownershipof land.

The upshot is that when your copyright is breached, you have the possibility, at least,of seeking and getting an injunction to pull an infringing publication off the shelvesacross the country. Even the threat of an injunction application should be enough toconvince a publisher to cough up the dough you are owed.

Divisions of Copyright
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Copyright is not a single entity. It can be divided into a variety of sub-rights. Thetraditional magazine writer’s licence of "First North American SerialRights" is a good example. As you can see, the copyright can be divided by time("First"), geographically ("North American") and by medium("Serial").

TIME
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You can sell someone an assignment or licence of a copyright for a period of time("six months") or a right to be first or second to publish the work. You canlimit it to a particular number of uses within a period ("up to 100 copies before May1, 1996").

Geographic
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You can also divide a right to reproduce a work geographically. So you can sellCanadian rights separate from US rights separate from European rights.

Media
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You can also specify the medium in which your work may be reproduced:"magazine", "television", "film" etc.

Electronic Rights
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The freelancer’s battleground of the future is in the area of electronic rights.This is the right to reproduce your work in some kind of computer readable form such as inan electronic database or on the World Wide Web in an electronic edition of the magazine.

Publishers throughout North America are jumping on the electronic publishing bandwagon.Most say that they are not making any money now but admit that they expect to make lots inthe future.

The position of both ASJA and PWAC position is that if a publisher seeks electronicrights you should insist on the following.

  1. Any licence for which they pay a flat fee is to be time limited to six months to a year.
  2. Seek a share of the revenue. PWAC recommends that you demand 50% of the gross revenue. Never accept a deal for a percentage of the net revenue as you can be sure that the accountants will make it so that there is never any "profit."
  3. Alternatively, you may wish to seek a flat fee per "hit" or a certain amount each time your work is accessed. PWAC recommends that you seek at least 50% of the gross amount the publisher receives for each hit. (By the way, don’t listen when they tell you that they can’t tell how often an article is accessed. That’s just not true. It is a trivial piece of software programming to provide that information.)
  4. Always licence; never assign electronic rights. In other words, give them permission but continue to own the right.
  5. Make sure that any licence you grant for electronic rights is a "non-exclusive" licence. This allows you to simultaneously licence the work to another electronic publisher.

The electronics rights battleground is still shrouded in smoke. However, bear in mindthat electronic publishing has the potential to be the biggest sea change in the industrysince the invention of moveable type. Remember that magazines do not sell magazines. Theysell readers to advertisers. The articles were just the lure to get people to read theads.

Now, with electronic publishing, the writing itself has become valuable. We areno longer the lure but we are now the product itself just as in book publishing.

Electronic rights represent your future retirement income. Even at a smallamount for each access, hundreds of accesses over a year add up to hundreds or eventhousands of dollars. Do not sell your electronic rights outright or you willregret it.

Writers groups around the world are working on unified positions to deal with theattempt by publishers to establish an industry standard whereby they get all electronicrights. You must resist this trend or you will be saddled with it permanently.Sometimes, that will mean walking away from an assignment. If so, walk! You owe it toyourself and to your colleagues.

There is nothing less at stake here than the future of freelance writing as a viableoccupation.

All Rights Agreements
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Sometimes you will be asked to sign an agreement giving a publisher "allrights." That means just what it says. There is no magic here. Sign it and they ownall rights to your work even to the exclusion of your own use of it.

Often, publishers will ask for an assignment of all rights with the rights theydon’t used to be reassigned to you on request. This is a way to ensure that youdon’t double sell the piece into a competitor to appear at about the same time as itappears in their book. Once they have published, they will usually be glad to reassign thework back to you so that you can sell secondary rights.

Recommended Wordingof Licence
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PWAC recommends that you use a variation of the following wording on all yourmanuscripts and in all your contracts:

Licenceof First North American Serial Rights to commence on my receipt of payment. Electronic reproduction rights specifically excluded.

This wording makes it clear that you are granting only a licence, exactly which rightsyou are licencing and that the licence to publish does not begin until you are paid.

What is being paid?
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Now that you and the publisher have settled exactly what it is you are selling —content, rights, etc. — you can now settle the price.

Before you start negotiating, you should know what this assignment is worth to you.Remember, you are the seller; you don’t have to sell if the price is not right.

PWAC recommends that you estimate the number of days the job is going to take you andthen demand a price of at least $500 for each of those days. Recognize that, as awriter, you spend only a small percentage of your time writing. The balance you spendquerying, doing the books and running your business. However, those writing days mustsupport all the other parts of the business. On average, you probably get only two ormaybe 2.5 writing days in a week. That means that if you earn $500 for each of those 100writing days in a year, you will have a gross income of $50,000. Deduct your operatingexpenses and you will end up with a working wage, no more.

How much you earn is always up to you. Sell your birthright for a mess of pottage andthat is just what you will have. Do some canny negotiating, push up the pay on everysingle assignment and you will find that freelance writing can be a fun and profitableoccupation.

How to Negotiate thePrice
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As a matter of negotiating policy, always let the editor make the first offerand never agree. A very effective technique is to pause for four or five secondsafter the editor names his/her price and then say, "Oh. I was thinking more like...." and then triple what they had offered. It will, of course, be refused.However, the offer will come up substantially and you will finally be able to settle forsomething somewhere in the middle.

For one or two minutes of negotiating you will be paid hundreds of dollars! Theassignment is the same but now you are getting more for it. It is the most profitable timeyou will spend in your freelance career.

When to Walk Away

Sometimes, an editor is not willing to budge on the price. If it is not up to yourstandards, walk away. It is more profitable to spend your time querying for the $1500assignment than to spend it doing five $300 assignments.

Currency and Means of Payment

Be sure that your contract specifies the currency in which you are to be paid and how.

Most of the time, this will go without saying — a Canadian publisher will pay inCanadian dollars to a Canadian writer. However, as you start to branch in to foreignmarkets, this may become an issue. Remember that exchange rates will cost you money andthe more obscure the currency, the higher the service charge.

Also, ask for payment by bank draft, preferably in Canadian or US funds. Foreigncheques take forever to clear — a month or more in some cases.

When
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When are you going to be paid? ASAP? A specific date? On acceptance? On publication?

ASJA and PWAC recommend you never
accept payment on publication.

If a publisher does not have the financial depth to pay on acceptance, they are not agood place to be doing business and sooner or later you will find yourself an unsecuredcreditor on the last-pay list of a bankruptcy trustee.

Many of us specify a payment date in our invoices. I give the usual 2% discount foraccounts paid within ten days with 3% per month interest for accounts over 30 days. Thatis standard business practice but my interest rate is intentionally high because I want tobe the first person paid, not the last.

Kill Fees
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Kill fees are what magazines pay for an article they assigned but then decide they arenot going to run.

Many magazines pay 50% of the original assigned price. Some try to pay nothing. Thebetter ones pay 100%.

The critical question here is "Why was the story killed?" Was it killedbecause you did not do your job and the story was not up to snuff? Then, frankly, youdeserve nothing; you did not deliver on your contract.

However, if it was killed because of a change of direction in the publication, thedeath of the subject, an editor’s bad hair day, then you deserve 100%. You did yourpart and delivered a top quality piece on time and on length. They have to do their part.

Make sure your contract is explicit about kill fees.

Electronic Rights
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Put a specific clause reserving electronic rights to you. Some magazines are trying tojustify electronic sales of articles are the same as selling a copy of a back issue or aspart of the original grants of rights. It is not but you don’t want to have to getinvolved in the rather long and expensive law suit that will be necessary to prove thatpoint.

Warranties and Indemnities
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A warranty is a promise which the other side in a contract is relying on. If it is nottrue, the contract falls; there is no deal.

In publishing contracts you will usually run across a warranty clause that readssomething like this:

The Author represents and warrants that the Work, both at the time of the execution ofthis agreement and at such future time as it may be created and/or completed, has not bepreviously published, that it is original except for excerpts from previously publishedworks for which permission to include has been secured from the copyright owner thereof,that it contains no material which is libelous, unlawful, or which infringes onanyone’s common law or statutory copyrights, that the Author is the sole author andproprietor of the work, that the Author has the full power to make this agreement andgrant.

Hot on its heels follows the "indemnity" clause. "Indemnity" islegalese for "I will pay that for you." It says that if any of your warrantiesare not true, you will pick up the tab for the ensuing lawsuit.

Indemnity clauses usually read something like this:

The Author agrees to indemnify and hold Publisher harmless against costs and expensesof any suit, claim, demand, or recovery based upon a claim that a warranty is untrue, ifit is finally adjudged that the warranty is actually untrue.

That last phrase, "…if it is finally adjudged that the warranty is actuallyuntrue," is crucial.

The fist language they run past you on virtually any contract will specify that youhave to pay regardless of the truth of the claim. The lawsuit can be totallyfrivolous, completely out of left field and aimed solely at the publisher’s deeppockets, but yours will be the ones being picked.

Unless you want to have a more than passing familiarity with bankruptcy law, alwaysdemand that the indemnity be limited to cases in which you have actually breached yourwarranties. If they won’t share the risk, they’re not people you want to bedoing business with.

1st,2nd and 3rd versions of contracts
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Many publishers send you their worst version of their contract first. In it, you givethem your first born, all their offspring and your house. If you whine, they will send youanother and sometimes another and another until you can find one that suits your needs andtheirs. Don’t be afraid to refuse to sign their "standard" contract. Makethe changes you need. Remember, this is just their offer and it’s not a deal untilyou accept it. But if you sign, you are bound.

Sending Your Own Contract
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Better yet, you send them a contract. Don’t wait for them to send you theirterms. Send them your terms. You can do that in a letter and asking that the editor sign acopy of the letter and return it to you. You can be sure that any contract they send youto sign will be clearly drafted in their favour by some rather high priced legal talent.You need to get in their first with your version of how you want to work.

__________________________________________________________________
Tim Perrin has been writing for a living in one form or another virtually all of his adult life. He has published several hundred magazine articles and five books, including one on writing (Better Writing for Lawyers, 1989). Tim has been teaching adults since 1975 for such schools as Simon Fraser University, the University of Victoria, several community colleges and in seminars across Canada and the US.

His passions are screenwriting and book-length "new journalism" non-fiction. His current project is a book on taking charge of your life. California born and raised, Tim has lived the last 25 years in Canada. He and his wife live by a little lake in the beautiful Okanagan Valley of British Columbia. Tim is the executive director of www.WritingSchool.com.

© 2004 WritingSchool.com All Rights Reserved. Used with Permission.


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