A contract is an agreement that the law will enforce. That is all. There is no magic to it.
Some agreements the law will not enforce. For example, an agreement to sell another person into slavery, an agreement to marry or other agreements that for public policy reasons are not things that we as a society choose to enforce.
Generally, the law of contract involves commercial transactions where money or goods are changing hands. The law looks for two things:
The question of offer and acceptance determines whether the parties to a contract were ever "of one mind" as to the terms of the contract (the lawyer’s Latin term is ad idem). There must be a moment when one party makes an offer and the other says, "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 will read in some terms but don’t rely on this. You do want your contracts to be nailed down.
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 other thing of value coming back to me, the law will not force me to follow through on my promise. 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, the car, the promise to deliver the car to you next week, or the like. In other words, the value 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. Why else would contracts be a year long course in law school? But for practical purposes, as long as you make sure that your contracts have clear, unequivocal offer, acceptance and consideration, you won’t ever have to learn about all those other topics.
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 the terms are of a written contract — they’re right there on the page — than an oral 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 the evidence of an oral agreement and favour the written agreement.
There also arises the question of the oral variation of the written contract. After the deal is done, you and the editor agree to bump the deadline by a month. Then the editor quits, the new editor looks at your written contract and say, sorry, Charlie, you are late and I’m not paying.
The key is always to document all your assignments clearly and on paper. Even when there is no formal written contract, you can document your agreements with letters. It can be as simple as the following:
Send that to your editor by fax and by mail. Make sure you cover all the points I will go 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 understanding and, if they allow you to start work relying on that understanding, if push comes to shove, the courts will likely enforce your understanding.
The essence of any contract is the "deal"; what is being sold, what is being purchased.
A writer "assigns" or "licences" the right to reproduce what s/he has written. But more than that, we "make to measure" pieces of writing to fit the preconceptions and wishes of our customers. So, the first question — the one that must come before all others — is "What is it you want me to write?" You cannot price the work until you know what you are doing.
What is the subject of the assignment? Who or what are you to write about? A magazine article? Feature or short piece for the front or back of the book? Catalog for a manufacturer? Press Release? Exactly what do they expect?
What kind of approach are you to take? Light and breezy? Dull, gray and corporate? Lots of anecdotes or heavy on facts? "Academic" or "popular"?
Words, pages or minutes? What is the length of the material you are to write? Or, are you being paid by the hour or day?
Number of Sources
For magazine work (and some other types) the difficulty and amount of time you will have to put in often depends on the number of sources you have to interview for your story. Canvas your customer’s expectations. Is s/he expecting you to travel all over the country and interview fifteen people? Do they want regional diversity; a source in the Atlantic Canada, another in BC? If you specify this now, when they come back at the last minute with a list of four more people they want interviewed, you’ll be in a position to agree... as long as you are paid for the extra work.
When does the customer expect delivery? Where?
Format of delivery (disk, paper, etc?)
In what form does the customer expect delivery? Photoready copy? IBM formatted disk with ASCII file? Macintosh disk? Via e-mail? Fax? On paper? (Remember paper?).
If the magazine changes its targets, how do you get paid more? You need to know exactly where the goal posts are and don’t let the customer move them.
Maximum Number of Rewrites
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
How are you to be paid for work beyond the agreed parameters of the assignment? In other words, if they do move the goal posts, how do you score a new touchdown?
Does the assignment include any photographs, drawings or other artwork or will the customer provide these? If they are included, how is the quality to be assessed? Are your extra expenses in providing these to be treated as expenses or are you expected to eat them? 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
Are they going to send you the galleys for you to review? Just for proof reading or to review for substance? What if they have made substantive changes that completely change the piece?
Do you get a by-line? Do you have the right to remove it if you are not happy with the edits?
What expenses are covered and what are not? Phone? Fax? Courier? Travel?
Copyright is the "exclusive right of the copyright holder to reproduce the work in any form."
As the creator of a work, you own the copyright in it.
There are two exceptions to that rule. First, if you are an employee and you create the work in the course of your employment, the employer owns it. Second, if you sign an agreement with an American publisher that refers to your work as a "work made for hire" or "work for hire" then it is as if you were an employee for the purposes of the creation of that work and the "employer" owns the work outright.
The American Society of Journalists and Authors (ASJA) and
When you "sell" an article, you are really giving another person the right to reproduce 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 now owns that right and can do with it what s/he wishes including reassigning it to someone else.
Must be in Writing
The Copyright Act requires that any licence or assignment of copyright must be in writing and bear the signature of the copyright holder. Therefore, if they don’t have it in writing, they don’t have it.
Some publishers send cheques that have stamps on the back that purport to give them all kinds of rights over your work and, if you want to cash the cheque, it looks like you have to sign their stamp.
Don’t worry about it. The contract was made long before the cheque was issued and they cannot now vary the contract. They owe you the money. They don’t have the right to unilaterally impose new terms.
Cross out the offending material and endorse the cheque. If you want, cross it out and deposit it to your bank account without endorsing it. The bank will still put it through by stamping it "Pay to Payee"; it will just take a few days longer before it appears in your account.
A cheque, by definition, is a unconditional order to pay. The issuer of a cheque cannot put conditions on it.
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 at some future date and they don’t pay, you have a debt and you must then sue on that debt to collect. However, debt is a provincial/state law matter and, if you live outside the province or state where the publisher does business, you are likely to have a very hard time collecting even if you win in court.
By licencing, you retain the ownership of the right and you can make it a condition of your contract that if the contract is breached, the right automatically reverts to you. 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 you have is your right to sue which is more trouble than it is worth most of the time.
Timing of payment
When you licence your copyright, make it a condition of the licence that you be paid prior to publication. Then, if they publish without paying, you are in a much stronger legal position. In particular, copyright is a federal matter in both Canada and the US. Federal courts have jurisdiction right across the country.
Also, as copyright is intellectual "property", the courts treat it with some of the deference they have traditionally given to other property matters such as ownership of 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 shelves across the country. Even the threat of an injunction application should be enough to convince a publisher to cough up the dough you are owed.
Divisions of Copyright
Copyright is not a single entity. It can be divided into a variety of sub-rights. The traditional magazine writer’s licence of "First North American Serial Rights" is a good example. As you can see, the copyright can be divided by time ("First"), geographically ("North American") and by medium ("Serial").
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 can limit it to a particular number of uses within a period ("up to 100 copies before May 1, 1996").
You can also divide a right to reproduce a work geographically. So you can sell Canadian rights separate from US rights separate from European rights.
You can also specify the medium in which your work may be reproduced: "magazine", "television", "film" etc.
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 in an 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 in the future.
The position of both ASJA and PWAC position is that if a publisher seeks electronic rights you should insist on the following.
The electronics rights battleground is still shrouded in smoke. However, bear in mind that electronic publishing has the potential to be the biggest sea change in the industry since the invention of moveable type. Remember that magazines do not sell magazines. They sell readers to advertisers. The articles were just the lure to get people to read the ads.
Now, with electronic publishing, the writing itself has become valuable. We are no 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 small amount for each access, hundreds of accesses over a year add up to hundreds or even thousands of dollars. Do not sell your electronic rights outright or you will regret it.
Writers groups around the world are working on unified positions to deal with the attempt by publishers to establish an industry standard whereby they get all electronic rights. 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 to yourself and to your colleagues.
There is nothing less at stake here than the future of freelance writing as a viable occupation.
All Rights Agreements
Sometimes you will be asked to sign an agreement giving a publisher "all rights." That means just what it says. There is no magic here. Sign it and they own all 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 they don’t used to be reassigned to you on request. This is a way to ensure that you don’t double sell the piece into a competitor to appear at about the same time as it appears in their book. Once they have published, they will usually be glad to reassign the work back to you so that you can sell secondary rights.
PWAC recommends that you use a variation of the following wording on all your manuscripts and in all your contracts:
This wording makes it clear that you are granting only a licence, exactly which rights you are licencing and that the licence to publish does not begin until you are paid.
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 and then demand a price of at least $500 for each of those days. Recognize that, as a writer, you spend only a small percentage of your time writing. The balance you spend querying, doing the books and running your business. However, those writing days must support all the other parts of the business. On average, you probably get only two or maybe 2.5 writing days in a week. That means that if you earn $500 for each of those 100 writing days in a year, you will have a gross income of $50,000. Deduct your operating expenses 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 and that is just what you will have. Do some canny negotiating, push up the pay on every single assignment and you will find that freelance writing can be a fun and profitable occupation.
As a matter of negotiating policy, always let the editor make the first offer and never agree. A very effective technique is to pause for four or five seconds after 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 for something somewhere in the middle.
For one or two minutes of negotiating you will be paid hundreds of dollars! The assignment is the same but now you are getting more for it. It is the most profitable time you 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 your standards, walk away. It is more profitable to spend your time querying for the $1500 assignment 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 in Canadian dollars to a Canadian writer. However, as you start to branch in to foreign markets, this may become an issue. Remember that exchange rates will cost you money and the more obscure the currency, the higher the service charge.
Also, ask for payment by bank draft, preferably in Canadian or US funds. Foreign cheques take forever to clear — a month or more in some cases.
When are you going to be paid? ASAP? A specific date? On acceptance? On publication?
ASJA and PWAC recommend you never
If a publisher does not have the financial depth to pay on acceptance, they are not a good place to be doing business and sooner or later you will find yourself an unsecured creditor 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 for accounts paid within ten days with 3% per month interest for accounts over 30 days. That is standard business practice but my interest rate is intentionally high because I want to be the first person paid, not the last.
Kill fees are what magazines pay for an article they assigned but then decide they are not going to run.
Many magazines pay 50% of the original assigned price. Some try to pay nothing. The better ones pay 100%.
The critical question here is "Why was the story killed?" Was it killed because you did not do your job and the story was not up to snuff? Then, frankly, you deserve nothing; you did not deliver on your contract.
However, if it was killed because of a change of direction in the publication, the death of the subject, an editor’s bad hair day, then you deserve 100%. You did your part 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.
Put a specific clause reserving electronic rights to you. Some magazines are trying to justify electronic sales of articles are the same as selling a copy of a back issue or as part of the original grants of rights. It is not but you don’t want to have to get involved in the rather long and expensive law suit that will be necessary to prove that point.
Warranties and Indemnities
A warranty is a promise which the other side in a contract is relying on. If it is not true, the contract falls; there is no deal.
In publishing contracts you will usually run across a warranty clause that reads something like this:
The Author represents and warrants that the Work, both at the time of the execution of this agreement and at such future time as it may be created and/or completed, has not be previously published, that it is original except for excerpts from previously published works 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 on anyone’s common law or statutory copyrights, that the Author is the sole author and proprietor of the work, that the Author has the full power to make this agreement and grant.
Hot on its heels follows the "indemnity" clause. "Indemnity" is legalese for "I will pay that for you." It says that if any of your warranties are 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 expenses of any suit, claim, demand, or recovery based upon a claim that a warranty is untrue, if it is finally adjudged that the warranty is actually untrue.
That last phrase, "…if it is finally adjudged that the warranty is actually untrue," is crucial.
The fist language they run past you on virtually any contract will specify that you have to pay regardless of the truth of the claim. The lawsuit can be totally frivolous, completely out of left field and aimed solely at the publisher’s deep pockets, but yours will be the ones being picked.
Unless you want to have a more than passing familiarity with bankruptcy law, always demand that the indemnity be limited to cases in which you have actually breached your warranties. If they won’t share the risk, they’re not people you want to be doing business with.
Many publishers send you their worst version of their contract first. In it, you give them your first born, all their offspring and your house. If you whine, they will send you another and sometimes another and another until you can find one that suits your needs and theirs. Don’t be afraid to refuse to sign their "standard" contract. Make the changes you need. Remember, this is just their offer and it’s not a deal until you accept it. But if you sign, you are bound.
Sending Your Own Contract
Better yet, you send them a contract. Don’t wait for them to send you their terms. Send them your terms. You can do that in a letter and asking that the editor sign a copy of the letter and return it to you. You can be sure that any contract they send you to 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.
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.