Book Contract Deal Breakers Every Writer Should Know Before Signing

It’s the document most writers can’t wait to get their hands on: a book contract.

Unfortunately, not all contracts are created with your best interest in mind. In fact, most are by nature written in favor of the person who drafted it — in this case, the publisher. While you will likely hire a lawyer to review the terms, he or she will also probably charge you by the hour to do so — who knows how long that might take?

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Therefore, in an effort to save you time and money, we spoke to industry experts about those areas of a book contract most likely to trip up a new author. Spot one in your deal and it’s time to renegotiate.

1. The non-compete clause

When the publisher wants to limit you from working on other projects, take heed. This “non-compete” clause can prohibit writers from working on books that would compete with the existing title they are publishing. The problem is that the clause is often so broadly written that it could stop you from writing magazine articles or blog posts, all of which can help to market the book.

“Any such clause should be limited to book-length work and should give the publisher a deadline for refusing a new book proposal on a related topic, which then frees the writer to pursue publication elsewhere,” advised Meg Schnieder, an Iowa-based author of 12 books, including The Everything Guide to Writing a Book Proposal.

Kathleen Rushall, an agent with Marsal Lyon Literary Agency in California, agrees. She says a non-compete clause can lock authors in, so they can’t write for other outlets or can’t write other pieces until the current one from that publisher comes out. She notes an example of a publisher mandating that the author cannot write any other books until the last book in a three-book series is published.

2. The exclusivity clause

An exclusivity clause is very similar to the non-compete, but instead of saying you couldn’t write another book at the same time on the same topic, this clause would state that you could not do any writing related to your book. That’s insane, especially for writers who work in the areas they write about.

For example, let’s say your book is about the fundamentals of journalism, and you also publish news articles about the same topic. Chances are your being a journalist was part of the platform that got you noticed by a publisher in the first place. So, if you see a clause that limits or impedes your day job, take a closer look.

“Writers have to make a living, and only rarely does a book contract offer enough money for a writer to meet living expenses without taking on other work,” said Schneider.

3. The second option

A “second option” can sound like a dream. After all, that’s the publisher saying it wants a first peek at your next work of art, which is nice to hear when you haven’t started your first project yet. But this can also be a red flag, especially for authors working with smaller publishers. Why? Well, what if a bigger publisher wanted to offer you a more generous advance for that next title? If you sign over your second book option rights, you could miss out.

“Watch the ‘options’ clause,” said Rushall. “Try to narrow the genre or have it kick in at acceptance versus publication.”

That way, if you are working on a nonfiction title and simultaneously writing a fiction book, the publisher of your nonfiction book (that may also publish fiction) can’t get first dibs on it. Or, like Rushall says, give the original publisher the chance to look at it upon acceptance of the first book, not publication of the second.

“It’s basically cutting the amount of time the author has to wait before being able to show the publisher her next book,” Rushall added. “It’s better if the author doesn’t have to wait until the first book is out on shelves, which could be a couple years depending on other factors.”

4. The matching offer

This option allows your publisher to match any offer from another publisher and win your book back.

“‘Matching offer’ options kill the motivation for another publisher to even look at your book,” warned Gina Panettieri, president of Talcott Notch Literary in Connecticut. “Why should someone bother when your original publisher could just match their terms and get your book and you have no say about it?”

Panettieri says that a “first-pass option,” which allows the publisher to consider the work exclusively and make an offer or pass on it before you shop the work to other publishers, makes more sense because many publishers won’t or can’t forego the option clause altogether.

“Be mindful of how a contract might limit you with future projects,” added Christine Mason Miller, author of Desire to Inspire: Using Creative Passion to Transform the World.

5. The “pay me now” clause

Everything in the contract looks good so far — until you get to the part that says you owe money to produce the book. Isn’t that a no-no? Absolutely.

“If the contract is asking the author to pay anything upfront or cover production costs, it’s for a vanity press,” said Rushall. “If you’re looking for traditional publishing, this isn’t it.”

With self-publishing, it’s normal to have some upfront fees, but you should not have to shell out a dime to publish a book using the traditional model. The only money you may have spent up to this point is the cost of postage to mail a proposal or manuscript. Other than that, you should never pay anything else. In fact, you should be getting money back once books start to sell.

6. The net profits — not net income — clause

Victoria Strauss of the popular watchdog website Writer Beware says that the ideal royalty at a big publishing house is paid on the list or cover price. Smaller publishers, on the other hand, are most likely to pay royalties on net income, which is the money they get for the book. Not necessarily a red flag, this is just how smaller presses operate, she explains.

However, Strauss does advise writers to watch out for a net income royalty clause framed to look like a list price clause. The terms that could be red flags, depending on how they’re used, are “net income,” publisher’s proceeds,” “sales price” or “gross income.” When a publisher pays on net profit, it is paying you based on the cost of the book after the deduction of other expenses, such as manufacturing or publicity. Publishers that use the net profit model may not always explicitly use that term, so be on alert for any language that points to this.

“Not only can [net profit] substantially reduce the amount the author is paid, it makes it possible for a publisher to manipulate author payments in unscrupulous ways — even, theoretically, down to zero,” Strauss warned. “This is why it’s so important that net in a publishing contract is precisely defined… it often isn’t, especially in contracts from small presses… so you know what kind of royalty you’ll be getting.”

“Make sure you see the definition in the royalties clause. If you don’t, ask for clarification…and get it in writing,” she added.

7. The “out of print” clause

“The shift to digital publishing is adding new wrinkles to the vetting process, for sure,” explained Danielle Svetcov, an agent with Levine Greenberg in New York City. “For instance, now more than ever, an incredibly important provision for all authors and agents to look at is the ‘out of print’ clause.”

With a traditional publisher, rights revert back to the author after the book is out of print — that happens typically after a year. But with electronic books, they can remain in print virtually, which means a publisher can argue that they would have the rights to the book indefinitely since the book is in print electronically.

Jared Kuritz, managing partner at the literary PR firm Strategies in San Diego, also leads the well-known La Jolla Writer’s Conference. He said, “To avoid this problem, authors need to make sure that they define the terms of ‘in print’ very clearly to include physical copies of the book that are available via traditional distribution to all appropriate retail outlets.”

Bottom line: Get a lawyer

Even if you spot all the red flags yourself, you should still hire an attorney who specializes in book contracts to catch anything you may have missed.

“I don’t do my own surgeries, so why would I try to decipher a book contract on my own?” said Lorrie Thomas, author of The McGraw-Hill 36-Hour Course: Online Marketing. “Investing in someone to decipher the language and point out some areas that I did renegotiate was money well spent.”

NEXT >> 7 Steps to a Winning Book Proposal

Kristen Fischer is a copywriter and Certified Professional Resume Writer (CPRW) living at the Jersey Shore. Visit her at www.kristenfischer.com.