Contract terms

I wanted to look at a couple of contract terms with you today. Nothing fancy; just three terms for your consideration when reviewing a contract.

Basket accounting: This term comes up with multi-book contracts. Usually, the publisher will specify an amount of advance per book. For example, in a two-book contract, the publisher may specify a $1,000 advance for the first book and a $1,500 advance for the second book. The total advance on this contract then is $2,500.

With a $1,000 advance on the first book, the ideal situation is for the author to start receiving royalty payments on the first book once the $1,000 advance has been recouped through sales. Similarly, the author would start receiving royalty payments on the second book once the $1,500 advance has been recouped.

However, some publishers include a basket accounting method in the contract, which states the author will not receive royalty payments until the entire advance, in this example $2,500, has been recaptured through sales. In my opinion, this ties up an author's income too long. If the advance is specified per book, then we should start receiving our royalties per book as well.

Option clause: In a multi-book contract, it's common for publishers to include broad descriptions of the follow-up book to which the publisher will have first right of refusal. This is the option clause.

Let's say a mystery author signs a contract to write two amateur sleuth mysteries for a publisher. The publisher may include in the contract an option for the first right of refusal for the next mystery the author writes.

At first glance, this may sound fair. But the mystery author may want to grow her career by writing for more than one publisher. However, this option clause - the next mystery the author writes - is so broad it ties the mystery author to this one publisher indefinitely. The mystery author's options may be better served with a more restrictive option, something along the lines of, "The publisher has the first right of refusal of the author's next amateur sleuth mystery." That way, if the author wants to submit to multiple houses, she could write a cosy mystery or a mystery with romantic elements and not be in breach of her existing contract.

Reprint rights: The only thing I'd like to recommend about reprint rights is that a term limit is placed on these rights. Let's say the book you've sold to your publisher sells well, but you know it could do better. Publisher support was good, but it wasn't great. Or the cover was nice, but it didn't "wow" you.

Scenario one - The contract you signed specified you'd get the rights to your book back in four or five years. At that time, you take the story to another publisher. That publisher is even more enthusiastic about the material than your first publisher. They repackage it, give it a bigger push and, lo and behold, the sales are even stronger than with the book's original printing. Everyone's happy.

Scenario two - The contract you signed doesn't give you your rights back. The publisher insists they've done all they could to promote your story. Despite your best efforts, the story doesn't catch on with readers. Your book withers and dies on the vine.

Which scenario would you prefer?

Patricia